How to stop living paycheck to paycheck?

Rosita8

Hi all-any advice to get ahead? We are a family of 6. Two adults and four children. I’ve recently started to take an interest in our budget and can see it’s tight. Our income is about 40k but with so many of us it’s not going very far!

How can we stop living paycheck to paycheck?

Thanks in advance 

elsien

Head to the debt free wannabe part of the forum. You don’t have to be in debt to use the tools and advice offered. 

The first step would be to post up a statement of affairs, Which is basically your annual incoming and outgoing is, with pretty much everything planned for and an emergency fund. The idea being that if you can see what’s coming then you can start to make some savings and get out of the living month to  month trap.

And if you’re not doing it already start keeping a spending diary. Because most of us find that we’ve got the big items covered but it’s thd little day-to-day spends the top up shop the extra coffee, have a takeaway is which are using up all the surplus income and mount up to more than we tend to realise.

ETA  if you don't want to share the SOA that is completely up to you. But it can be a useful tool for you to do anyway, because if it says (for example) you should have a £200 surplus at the end of the month and you don't, that will prompt you to try to keep track of where that money is going and to cut back on other areas if needed. 

Nebulous2

Hi Rosita - welcome to the forum. Some questions for you:- 

When you say you've recently taken an interest in your budget, who was doing it before? 
Do you have debt, or is it simply that you spend everything every month? The debt free wannabe section of this forum is very helpful for people struggling with debt.
Do you own your home, or do you rent? 

Tight budgets are a common feature when you have children - it gets better!

First of all its good to have an emergency fund. Find a way to save some money, separately every month and stick to it. Build it up for those emergencies that sneak up on you, such as a broken down washing machine, or unexpected car repairs. 

Two ways to improve your budget. 

1. Spend less. Screw down costs. Negotiate on mobile phones, check if you need subscriptions, get rid of expensive services like sky TV, buy cheaper food, shop around. Cut out frivolities that suck up money, cups of coffee, shop sandwiches, takeaways etc. 

2. Earn more. How does your salary compare in your field? Any chance of advancement / payrises?  Any capacity for additional work? Overtime, part-time job etc.

Rosita8

elsien said:

Head to the debt free wannabe part of the forum. You don’t have to be in debt to use the tools and advice offered. 

The first step would be to post up a statement of affairs, Which is basically your annual incoming and outgoing is, with pretty much everything planned for and an emergency fund. The idea being that if you can see what’s coming then you can start to make some savings and get out of the living month to  month trap.

And if you’re not doing it already start keeping a spending diary. Because most of us find that we’ve got the big items covered but it’s thd little day-to-day spends the top up shop the extra coffee, have a takeaway is which are using up all the surplus income and mount up to more than we tend to realise.

ETA  if you don't want to share the SOA that is completely up to you. But it can be a useful tool for you to do anyway, because if it says (for example) you should have a £200 surplus at the end of the month and you don't, that will prompt you to try to keep track of where that money is going and to cut back on other areas if needed. 

That's great thanks, I'll head over to that board and take a look. I started a spending diary last month which has been an eye opener! 

Rosita8

Nebulous2 said:

Hi Rosita - welcome to the forum. Some questions for you:- 

When you say you've recently taken an interest in your budget, who was doing it before? 
Do you have debt, or is it simply that you spend everything every month? The debt free wannabe section of this forum is very helpful for people struggling with debt.
Do you own your home, or do you rent? 

Tight budgets are a common feature when you have children - it gets better!

First of all its good to have an emergency fund. Find a way to save some money, separately every month and stick to it. Build it up for those emergencies that sneak up on you, such as a broken down washing machine, or unexpected car repairs. 

Two ways to improve your budget. 

1. Spend less. Screw down costs. Negotiate on mobile phones, check if you need subscriptions, get rid of expensive services like sky TV, buy cheaper food, shop around. Cut out frivolities that suck up money, cups of coffee, shop sandwiches, takeaways etc. 

2. Earn more. How does your salary compare in your field? Any chance of advancement / payrises?  Any capacity for additional work? Overtime, part-time job etc.

 Hi thanks for your response. My husband has been managing it as he found it easier just one person in control which as we know is not always the case. We do have some debt (car and kitchen loan) but the worry is spending everything every month. My husband is self employed and I am a sahm-youngest is 1. I have suggested perhaps getting a night job like online picker for a supermarket and my husband says maybe I can do paid admin for his business. Your suggestion of

"1. Spend less. Screw down costs. Negotiate on mobile phones, check if you need subscriptions, get rid of expensive services like sky TV, buy cheaper food, shop around. Cut out frivolities that suck up money, cups of coffee, shop sandwiches, takeaways etc." looks like the way forward at the moment. 

EssexHebridean

If you fancy the idea of getting a job that would fit in with your other commitments that sounds like a great thing to go for - do make sure it doesn't impinge too much on a good life balance though - there's limited fun in a situation where he gets home from work and you immediately leave to go to your own job! have a look at things like online surveys if you have some time that you may be able to divert to those during the day too - they don't pay much, but it all helps. 

Household budgets are one of those things that IMO one person needs to deal with the nuts and bolts, but both need to be fully on board and up to speed with what is going on - that way if something happens the other party knows what they are doing and how thigs work. We have roughly three monthly "financial summits" where we go through everything, review savings goals and our "pots" for various planned expenditure to see if they need revision, and that sort of thing. 

Rosita8

EssexHebridean said:

If you fancy the idea of getting a job that would fit in with your other commitments that sounds like a great thing to go for - do make sure it doesn't impinge too much on a good life balance though - there's limited fun in a situation where he gets home from work and you immediately leave to go to your own job! have a look at things like online surveys if you have some time that you may be able to divert to those during the day too - they don't pay much, but it all helps. 

Household budgets are one of those things that IMO one person needs to deal with the nuts and bolts, but both need to be fully on board and up to speed with what is going on - that way if something happens the other party knows what they are doing and how thigs work. We have roughly three monthly "financial summits" where we go through everything, review savings goals and our "pots" for various planned expenditure to see if they need revision, and that sort of thing. 

Thanks, this is all helpful. I suppose we used to have those type of meetings, largely as I was spending to much money!

Rosita8

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary	Amount(£)
Total monthly income	3,078.4
Monthly expenses (incl. HP & secured loans)	2,053.41
Available for debt repayments	1,024.99
UNsecured debt repayments	333.9
Amount left after debt repayments	691.09

Personal Balance Sheet Summary	Amount(£)
Total Assets (things you own)	312,000
Total Secured & HP Debt	-0
Total Unsecured Debt	-14,957.26
Net Assets	297,042.74

Household Information

Number of adults in household	2
Number of children in household	4
Number of cars owned	1

Income, Expense, Debt & Asset Details

Income	Amount(£)
Monthly income after tax	0
Partners monthly income	1287
Benefits	1411.4
Other income	380
Total monthly income	3078.4

Expenses	Amount(£)
Mortgage	0
Secured/HP loan payments	0
Rent	0
Management charge (leasehold property)	0
Council tax	186
Electricity	66.5
Gas	66.5
Oil	0
Water Rates	0
Telephone (land line)	0
Mobile phone	119.63
TV Licence	13.25
Satellite/Cable TV	27.98
Internet services	47
Groceries etc.	600
Clothing	20
Petrol/diesel	20
Road tax	14.43
Car Insurance	29.12
Car maintenance (including MOT)	20
Car Parking	0
Other travel	0
Childcare/nursery	200
Other child related expenses	265
Medical (prescriptions, dentists, opticians etc.)	10
Pet Insurance/Vet bills	28
Buildings Insurance	30
Contents Insurance	0
Life Assurance	0
Other Insurance	50
Presents (birthday, christmas etc.)	50
Haircuts	40
Entertainment	50
Holiday	0
Emergency Fund	100
Total monthly expenses	2053.41

Secured & HP Debt Description	Debt(£)	Monthly(£)	APR(%)
Mortgage	0	(0)	0
Secured & HP Debt totals	0	-	-

Unsecured Debt Description	Debt(£)	Monthly(£)	APR(%)
Car	4957.26	133.9	3.44
Family loan (kitchen)	10000	200	0
Unsecured Debt totals	14957.26	333.9	-

Asset Description	Value (£)
Cash	6000
House Value (Gross)	300000
Shares and bonds	0
Car(s)	6000
Other assets (e.g. endowments, jewellery etc)	0
Total Assets	312000

Comments on the results

You have sufficient monthly income to meet your expenses and your minimum monthly debt repayments with £691.09 left over. You can use this to pay off your debts more quickly or to build/top-up an emergency fund. Whatever your results show, it always pays to seek advice or comments from others. Why not post your SOA details on our Debt Management discussion board or on your preferred discussion forum elsewhere. Thankyou for using the SOA Calculator at www.stoozing.com.

Rosita8

Points you may query-we are mortgage free. One daughter has difficulties and goes to a special school. Things we pay for that I know we could cut/ reduce are food, swimming lessons, dancing lessons, school bus fare, school dinners for older children, Netflix, Amazon Prime, Disney (eek).

Singlespeeder

Morning. Just a quick look suggests you're in a reasonable place, good income no mortgage and little debt.
I guess you could shift the car debt onto an 0% card and save a little.
Your mobiles are high.
You put £100 away for EF and have £6000 .... healthy
Keep doing what you're doing.

Rosita8

Singlespeeder said:

Morning. Just a quick look suggests you're in a reasonable place, good income no mortgage and little debt.
I guess you could shift the car debt onto an 0% card and save a little.
Your mobiles are high.
You put £100 away for EF and have £6000 .... healthy
Keep doing what you're doing.

Thanks, Mobiles are for three of us-but will look to change when out of contracts.