Wow wee oh my - trying to hack away at my £54k debt (was even about to book a holiday)

astrocytic_kitten

Rainbowtrousers said:

Ah so you have different pots within your budget ? Mine is all mixed in. I assume YNAB is an app? Hot chocs and coffees are a mix but mostly me just needing a pick me up and to chat to different peeps. I’d say of the 30 plus spent about 10 of that were hot chocs with friends that I really took my time with and enjoyed. The rest more just part of the old routine. 

YNAB is an app - You Need a Budget. Takes a bit of getting your head round and is £6.49 per month (though they do free trials), I was skeptical at first at the wisdom of paying for an app when I’m trying to save money but I wouldn’t be without it now. I have categories for daily spending like groceries, snacks, skincare, coffees/drinks/dinner with friends, hair, books, travel - you can be as detailed or not as you like with the categories, but at the start of the month they all get a certain amount of money, every time I make a purchase I enter it, and if I go over in one category then I need to reduce another category so I still end the month in budget. YNAB is a bit love it / hate it, some people use other apps, some use a notebook and pen - whatever works for you and that you actually use is best. 

Rainbowtrousers

astrocytic_kitten said:

Rainbowtrousers said:

Ah so you have different pots within your budget ? Mine is all mixed in. I assume YNAB is an app? Hot chocs and coffees are a mix but mostly me just needing a pick me up and to chat to different peeps. I’d say of the 30 plus spent about 10 of that were hot chocs with friends that I really took my time with and enjoyed. The rest more just part of the old routine. 

YNAB is an app - You Need a Budget. Takes a bit of getting your head round and is £6.49 per month (though they do free trials), I was skeptical at first at the wisdom of paying for an app when I’m trying to save money but I wouldn’t be without it now. I have categories for daily spending like groceries, snacks, skincare, coffees/drinks/dinner with friends, hair, books, travel - you can be as detailed or not as you like with the categories, but at the start of the month they all get a certain amount of money, every time I make a purchase I enter it, and if I go over in one category then I need to reduce another category so I still end the month in budget. YNAB is a bit love it / hate it, some people use other apps, some use a notebook and pen - whatever works for you and that you actually use is best. 

That’s very helpful, thanks. Generally when people refer to budgeting are they categorising as you have referred to. Or do some have the same as me with one big pot? Thanks 

joedenise

I'm another advocate of YNAB although I have a much older version that I had to pay outright for but that is 6 or 7 years old now so not sure how much longer it will work for as they stopped supporting it at the end of 2016 so if it goes wrong and I can't sort it out then I'll definitely move over to the paid version as I find it so good.

Like @astrocytic_kitten I have absolutely loads of categories.  I think it helps you to keep track of your money and as said if you overspend in one area you have to decide what category is going to be reduced!  So if you spend too much on your groceries then you've got to reduce something else in your budget such as your eating out budget (to me that's the logical one as it's food related!)

Have a look at the app and perhaps download the Free trial for a month or so (think it's something like 34 days) to see how you get on with it - it's worth watching the classes online before downloading and then watching once downloaded.

astrocytic_kitten

Rainbowtrousers said:

astrocytic_kitten said:

Rainbowtrousers said:

Ah so you have different pots within your budget ? Mine is all mixed in. I assume YNAB is an app? Hot chocs and coffees are a mix but mostly me just needing a pick me up and to chat to different peeps. I’d say of the 30 plus spent about 10 of that were hot chocs with friends that I really took my time with and enjoyed. The rest more just part of the old routine. 

YNAB is an app - You Need a Budget. Takes a bit of getting your head round and is £6.49 per month (though they do free trials), I was skeptical at first at the wisdom of paying for an app when I’m trying to save money but I wouldn’t be without it now. I have categories for daily spending like groceries, snacks, skincare, coffees/drinks/dinner with friends, hair, books, travel - you can be as detailed or not as you like with the categories, but at the start of the month they all get a certain amount of money, every time I make a purchase I enter it, and if I go over in one category then I need to reduce another category so I still end the month in budget. YNAB is a bit love it / hate it, some people use other apps, some use a notebook and pen - whatever works for you and that you actually use is best. 

That’s very helpful, thanks. Generally when people refer to budgeting are they categorising as you have referred to. Or do some have the same as me with one big pot? Thanks 

I know some people prefer to keep it in one big pot as they feel too restricted when the spend is divided up into categories. I think most people probably separate out things like food spending, entertainment, cleaner, gym though, even if they don’t go further.

You’re doing well so far, I think tracking every single thing you spend for a month or two could be very valuable outside of the ongoing budget management side though, it gives you the data to make informed decisions about the choices you make.

I was really surprised how much of my monthly food spend was things like buying a bar of chocolate or other snacks at lunchtime even though I’d brought my lunch in, for instance. If you’d asked me I’d have sworn it was about a tenner a month and it was, erm, several times more. I now have a separate snacks category to keep an eye on what I’m spending there. Even if you are spending £30 a week on meat that still leaves £230 a month on groceries which seems incredibly high if the rest is own brand stuff - knowing what the money is going on means you can decide what you want to spend it on and consider worth it, and where you want to cut back.

mark55man

I couldn't get the hang of YNAB - but I am a bit of an excel geek - equally though its a bit rear view reporting and habit for me - I do see the benefit of looking ahead, and I like the conceit behind YNAB of paying this month's bills out of last month's money (ie not living pay cheque to pay cheque).

BUT - and its a big but - I CBA with it - and I do pay (more than £6.49 a month) for that in financial sloppiness BUT (small but) I'm just OK as generally I am within my set budget and have paid off a lot in the last 2 years with only a few months to go (motor cars and young adults not withstanding) 

stymied

My categories are food & drink, toiletries & household, house & miscellaneous, medical, clothes, entertainment (which includes meals & snacks out), pets, holiday, car, savings, presents, utilities, tv, phone & internet & mortgage. I keep track of the budget in Excel. The biggest faff is going through grocery store receipts to split them out into food, toiletries, pets & house but I like to see where any overspends creep in / where I might be wasting money.
On the whole it sounds like you have good categories but that unknown in the food budget would be worth breaking down further for a couple of months. If you still have your receipts you could look back for November. Was the butcher really only £30 a week or could that be an underestimate? We batch cook a lot e.g. shepherds pie, veggie lasagne, chicken curry and freeze portions for later. That seems to work out loads cheaper than starting from scratch with every meal.

Rainbowtrousers

Hello everyone! How are you all? The advice i received in December last year was helpful. I have some great updates to report. I do however fall into the category of 'released money from mortgage to pay off all debts without really addressing the issue or learning my lesson'. It is what it is though. So since December I got a pretty decent paying job which has allowed me to 1. put my BTL on an interest only BTL mortgage (it was on a resi repayment mortgage before) and also 2. remortgage to barclays at 1.05% on my own home releasing 49k in the process to pay off all my debts. I will try try try to stick to a budget this time around and take this as a fresh start. I do find myself still eyeing up new homes and porsches but i have accepted that's just my personality. I did also get diagnosed as mild adhd but i am not going to dwell on that or use it as an excuse. I am going tio instead have part of my budget as a 'discretionary/fun' spend bit so i can still go on holidays and eat out etc. Any thoughts would be welcomed as always. Yes i know the best way would have been to suffer for 3 years to pay it off but that would have made me miserable

TheAble

Hope it works out for you. As long as you don't build up the debts again, that's the most important thing. Bear in mind many do unfortunately fall into this trap after consolidation so stay vigilant lest you become one of them..!

Rainbowtrousers

In my ears I have the words of a really helpful lady that used to work for a bank and commented on my posts back in 2020 …. Saying that everyone who released and paid off instead of learning their lesson and paying off the debt through sacrifice would always end up releasing more in a few years time. So that doesn’t happen to me I’m transferring a budget to a separate account every month and sticking to it without exception. I’m also going to shut all credit card accounts and get rid of my overdraft. At 43 it’s slightly embarrassing that my parents (who lent me 16k) keep asking me if I’m overspending! It puts a strain on everyone and I’m going to do all I can to avoid this trap again! Any other tips for staying on the straight and narrow would be great 

mark55man

That's a good plan - live and learn from others, rather than live and don't learn (of which I have been guilty, and why I am still here).