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enthusiasticsaver

gnobak said:

@enthusiasticsaver Thanks.

Exactly... in the last year I had a health 'incident' which was related to stress. I am actively trying to avoid stress and this diary is one prong of attack.

Also, the company I worked for for over 20 years sold our division and we are in a new company. It's I.T. so all pretty stable etc but it's concerning. If I lost my job I would get a pretty big payout as I carried my years of service, but still....

I think the overdraft interest rate is 11.85%.

The 400 in car maintenance basically covers the annual test and basic service for both cars.

Yes I am writing here to keep myself focused. I don't mind if there are no responses, but appreciate them!

Sorry about your health incident and good that you are putting things in place to avoid a  repeat of that.  Getting in control of your finances will help.  

I realise you are focusing on the overdraft (rightly so) but once that is sorted I would definitely start saving monthly to cover the car expenses so the money is there waiting next year and then you do not need to find it all in one month.  It helps to budget this way for annual costs like insurances (which are cheaper if you pay annually rather than monthly) car services and mots, boiler services/repairs etc etc.  

Also, please don't take this as criticism of the way you have organised your finances with your wife being a SAHM for much longer than most of us but what is her pension situation like should anything happen to you?  Presumably she does not have a pension in her own right or a very small one if she has not worked for 23 years. You have life assurance which is important to pay off the mortgage so that is good but long term sorting out a pension for her too is a critical part of financial planning. 

My suggestion would be that you use a zero  based budget for a few months going forward to keep tight control on spending.  So maybe personal spends for each of you, a pot for food expenses and fuel and entertainment over the month and set up savings pots for the house/diy, car and gifts. 

I would also say that a 0% credit card is better and cheaper than an overdraft so once it is gone I would cancel the overdraft and keep an empty 0% card for emergencies until you have an emergency fund set up. 

gnobak

@enthusiasticsaver

Yes I think you are right. I just want to have 2-5k emergency fund before I start saving into pots. I can spread the savings into paying back to edu loan (to myself) and savings into pots etc. I'll think about it a bit more once I get close to that stage.

She does not have a pension. She would get the state pension at 67.

We have mortgage protection so that would be paid off.

We also have a 215k life insurance policy. I don't know how I managed it but it is a Joint Life First Death, for Whole Term with no end date, and the payments are fixed. Apparently this is very rare but I double checked and have it in writing.

I also have a death in service payout if that condition is met.

So there is plenty of help there, and if need be I suppose she would sell the large house and move somewhere smaller and free up living money.

It is my intention though that I would build up additional savings too, eventually.

My own pension is currently valued at 250k, I assume she would get some or all of that too!!?? I'm not really that knowledgeable on pensions. I will need to read up a bit more as I'm sure it's country specific.

I don't want to have a credit card at all except for the convenience of online purchases. That is why in my original posting I indicate my emergency fund goes from 2k to 5k to 12k, with the overdraft closing at 5k. TBH never having paid CC interest at all I actually have no idea how easy it is to get 0% cards here! I will consider it when I get to that point.

Thanks for the comments!

vampirotoothus

gnobak said:

Just checked my mortgage rate has gone from <1% to 3.1% and is probably going to go to 3.6% next month.

My provider has a fixed rates of 5years 3.35%, 7years 3.95%, 10years 4.1%

They are likely to rise too, and the chances are that mine will drop again, so I think I will stick.

Thanks for forcing me to look it up!

If you check I think you will probably be able to fix for no fee and then change it again for no fee should the rates start to fall. Personally I think rates will climb a bit more (but really hoping they don't), but if you fix for 5 years and can change for free what have you got to lose? You think your rate is going above their lowest fix next month, so for month 1 you will already be saving. V x

gnobak

I'm not sure about that here where I live. I do know that there is a small group of people who are on the lowest rate ever offered and I'm one of them. There has been a concerted effort by the banks to get people off trackers in general, there are even the usual 'scandals' where people should have been offered them when coming off fixed rates but weren't etc. etc. with compensation now.

I would be loathe to fix for a few years as I know I would never be able to go back to the tracker rate I'm on. I think I will risk a year or two or three on a higher rate.

gnobak

Weekly update:

• Plumber has been back and it looks like it will be approx 700 and not a new boiler as he hinted.
• I unexpectedly came into 200 and spent 35 on a takeaway for 3 of us. We rarely eat out. Rest is clearing overdraft.
  
• I had my BIL over to help with some DIY and think we might have a plan to do a large DIY job ourselves, getting rid of a potential 8k bill. Some investigations needed when the weather improves.
• A hand tool we bought recently broke and instead of replacing my wife said she is happy to use a different one.
• My wife is happy to start tracking the monthly spend in more detail
• Due to the central heating still not being fixed I rooted out my portable gas heater from the garage but there was no gas tank. So I had to buy a new one, 35, but with a deposit for not having a tank, also 35. When I got home, I found my empty gas tank! I will get it refilled as I should really have 2 so you can swap easily if one runs out.

For the week ahead I need to:

• Work out the best way to track monthly spend
• Take 3500 from my edu loan balance and pay off remaining personal loan
• Pay plumber
• Pay for car service
• We rarely eat out or get takeaways (although they have increased since COVID) but one of our favourite places just announced it is closing so we will prob head there for one last time.
• I am nearly out of wood fuel for my stove and there could be 3 month months of coldish weather so need to figure out what's best to do. I actually grow my own firewood but due to COVID restrictions I am out of sync on processing it and the logs I have need another year to dry, annoyingly as I have loads.
  

My spreadsheet predicts that the overdraft will drop to -500 at the end of the month, but will be a bit lower as we spend money.

gnobak

Weekly update:

• Took 3400 from the unused funds from the Education loan and paid off my old car loan. Psychological move. I will be paying it back into the Education loan monthly. It is now my only loan (plus mortgage)
• Car service + brakes was 280.
• Spent 65 on bits and pieces to convert the end wall of a shed into a door. This is so I can fit large equipment into it instead of spending large amounts on a new shed. (I purchased an equivalent shed for other equipment 2 years ago and it was 1300.)
• Spent 30 on meal in the place that was closing down
• Spent 40-50 on food and treats/film rental over the weekend as it is a public holiday here. That's including with kids.
• Visited 2 supermarkets far away that where we can get stuff that isn't available locally and spent about 100. A downfall is that these spends sometimes just happen but subsequent weekly shop budgets are not adjust downwards.
• Spent 25 on seeds for the veggie garden
• The gas cylinder I bought ran out after 9 days! I bought another for 35. Trying to use it less but hopefully the heating will be fixed soon. I am WFH so it's handy although I am frugal with it. My wife also used it when tutoring kids. No central heading for 3 weeks could potentially save me 175 based on my last bill!!
• Spent about 40 on my mother stuff for her birthday

For the week ahead:

• I have been having lots of trouble dealing with the gas technician but I think we are on the home straight. I am now 3 weeks with no central heading. I think the final bill will be about 800 plus the annual service. That is to fix a leak, and replace the circuit board.
• No major plans, just to try to be more mindful about spend.
• I was due to meet a friend for food for Christmas but I was ill. Might meet up in the coming week but I'll only spend about 15.

My projected balance before payday is still showing -500. Which is good at it's normally -3000. I put some stuff on credit card so it'll come out after the following payday. 

gnobak

Weekly update:

• The final plumbing bill was was 670 which was 130 less than I had set aside
  
• I spent 35 of the 130 'saved' on a meal for 3. I try to take a % of 'savings made' to liven life up a little these days....
• My mother gave us 250 and my wife gave me 125 towards our summer holiday so saved that away. I might actually keep it in the current account until after payday so that it brings me out of overdraft. Psychological move.
  
• Spent 40 on heat logs from a local place to try them out. If they are good I will make a decision on how much to outlay on a bulk purchase.
• Met two work colleagues for lunch and it was only 6 which was good.
  

For the week ahead:

• Probably spend about 50-60 on Valentines for flowers + simple meal. We are not extravagant
• The tracking of weekly spend isn't really happening so I will push that a bit more
• Doing some garden work and I suspect there will be some spend but I'm trying to spread it out or avoid. We have let things go due to not having funds so I don't mind a gradual return to normality.

Edit: monthly tracking has been backdated to Feb 1 and we have come to an understanding how we will split and manage the tracking effort, and how we will decide on how to set limits. I feel a bit of a weight lifted TBH.

enthusiasticsaver

Good that your projected overdraft is predicted to be lower than normal. I would reduce the limit so you are not tempted to use it going forward. 

I would caution against spending on the credit card without the money to back it up as otherwise you start the following month on a negative.  I know this to my cost this month having merrily booked a few short breaks on my credit card and then panicking when it built up so quickly I forced myself to draw out of savings and repay it.

So having tackled the overdraft which is a priority going forward I would tackle the lack of savings and anticipating salary by spending on credit.  Otherwise you seem to be doing ok though and although repaying the personal loan did not actually reduce the debt I assume if you just moved it to the education loan I think psychologically it seems  neater to just have the one. 

gnobak

Thanks. Yes I know you are right on using the CC. It's just delaying things, but I wanted the psychological hit of 'clearing' the overdraft this month

In my projection spreadsheet I have actually marked down that all bills I have that I normally put on the CC will just be taken from my current account, starting from April. This accelerates getting to the stage of clearing the overdraft and having a minimum of 2k in the current account.

Silly I know, but....

Once there I will have no overdraft, and no use of CC, and be able to start putting money into real savings every month.

enthusiasticsaver

Sounds like you have a great plan and I totally get the psychological benefit of tackling the overdraft first. I find it uncomfortable having anything on credit tbh so I move the money from my current account into a separate savings space as soon as it is spent so it is ready to pay the bill when it hits. 

Moving the bills away from credit card definitely sounds like a good idea.