DFW newbie

TeeMan

Hello everyone - first time on here and looking to get sorted financially! First step is clearing debt.

SOA:

Loan - £695 remains from £10500. Spent on a complete kitchen refurbishment after a leak. We received the other half of the money from the insurance company but upgraded more with walls coming down. I have overpaid so due to finish early.

credit card - Tesco - £220.

Income is £54k, wife’s £20k. Mortgage - £189 (50% LTV).

So in total we have unsecured debt of £900.

I am looking to clear off a lot of the debt on Friday, will be left with maybe £200 for Sept.

How do people avoid debt and keep out of it? I am not a reckless spender and we budget and meal plan etc. 

However I am amazed at how much everyone seems to be able to afford and have, and we always seem the poor relation. We cash own both of our cars, and save up for holidays (not big flashy - we have just have one back from a great camping trip!), we are just keen to see how others manage and live, and trying to gauge how we set sit compared to others

SuperFrank88

You say you budget, but is that budget realistic & sustainable? 

For me when I first started budgeting, I made it too restrictive and always seemed to 'overspend'. I realised that I had to make some adjustments to my lifestyle in order to live within my means. 

Andyjflet

Put together an emergency fund, I follow Dave Ramsey Baby Steps (google it) so on Friday you will be on Baby Step 3. This means you save 3-6 months worth of household expenses, this helps in emergencies and stops you resorting to credit ever again. I haven't used a credit card for nearly two years now. 
Issue is your down to £200 this weekend, what happens if you have a blow out or the washing machine leaks etc etc, better to have an emergency fund than borrow. I would pay it off next month, put half into and emergency fund this week, sods law is real!!

I would split the £900 into 3 payments, aiming for £1000 initial emergency fund, and have it cleared by December. 

ratrace

However I am amazed at how much everyone seems to be able to afford and have, and we always seem the poor relation. We cash own both of our cars, and save up for holidays (not big flashy - we have just have one back from a great camping trip!), we are just keen to see how others manage and live, and trying to gauge how we set sit compared to others

What you will find in the vast majority of cases is that looks can be deceiving, and the people who appear on the outside to be doing well really are not, behind closed doors there is a lot of debt, i know a few people (in real life) that have remortgage a few times and then gone on another spending spree just to be in more debt, sadly social media has made this issue worse as people try to compete.

Budgting is good but it has to be realistic and include personal spends in there,

what helps me is appreciation and being gratefull for what i have however little it may seem, im not homeless, i am healthy no disabilitys etc.... Hope that helps you a little 

Ebe_Scrooge

ratrace said:

However I am amazed at how much everyone seems to be able to afford and have, and we always seem the poor relation. We cash own both of our cars, and save up for holidays (not big flashy - we have just have one back from a great camping trip!), we are just keen to see how others manage and live, and trying to gauge how we set sit compared to others

What you will find in the vast majority of cases is that looks can be deceiving, and the people who appear on the outside to be doing well really are not

I have to agree.  In my neighbourhood there are an awful lot of Range Rovers and those big 4x4s made by Porsche, Audi, BMW etc. driving around.  I know damn well that the majority of them are not owned, just rented.  Me, I'm happy with my 15-year old workhorse that's long since paid for and owes me nothing.  A skiing holiday every winter and the Maldives every summer?  No thanks, I don't need to keep up with the Joneses, I enjoy my couple of weeks away in a holiday cottage in Scotland each year a great deal.  1 trip abroad every few years to somewhere a bit sunnier, just to add a touch of variety.

I'm not rich by any stretch of the imagination, but like to think I'm "comfortable" and happy to just live within my means.

mcpitman

"Cut your cloth accordingly" is always a good analogy my Grandma used.

The other simple one is the need/want debate. If you have to use credit to supply either you are potentially fueling a future problem.

Needs come from a savings pot or that months "spare money budget" (DR baby Step 1) and immediately replenished from the next available income.

Wants are saved for pro-actively (new car in 12 months, Xmas saved up ahead of time to a set budget).

TeeMan

Thank you all, very lovely