SOA | 2023

Mimi_Arc_en_ciel

EssexHebridean said:

One question I'd ask - if you lost access to your spreadsheet tomorrow are you confident you could manage anything "manually" with the way you are set up at the moment? Automated processes for tracking finances and budgets are brilliant tools - but they work best when someone has first done all the groundwork on understanding how budgeting works and exactly what their spends are - and there are just a handful of red flags that you may not quite be there. You need to actually learn what your monthly surplus is - and that in turn should be given a job as this avoids the risk of frittering or "soddit-spending" (as in - s*d it - the money's there so we can just buy it!") Also as you've already acknowledged, for predictable spends there should be a monthly budget in place - if you spend less than your budget in a year then you can of course adjust and move the surplus to long term savings pots, but in the first instance a budget can really help you to see where - for example - a car has suddenly started becoming far more expensive to run, which is sometimes the first sign of the need for a replacement looming. 

I know you've been around on the boards for a fair while so probably know a lot of the stuff you're being told - but sometimes knowing something and actually remembering that yes, it applies to us too, can be a different thing, so reviewing regularly is a great thing to be in the habit of. We sit down a few times a year for a "household financial summit" where we review spending and savings, assess goals and decide whether anything needs changing. Those (roughly quarterly) reviews pretty much never fail to make us think "Oh - that's a point" about something or another in spite of the fact that ongoing monitoring of the whole picture takes place constantly too. 

Owning the house outright is a wonderful thing - we've been there for the past few years too! Is this your forever home though, or might there be the possibility of a move in the future which could see you needing to take a mortgage? Not necessarily anything you need to do anything about right now, but if it is a possibility then it's a good idea to have in the back of your mind how you would tackle that. 

You have your road tax down as a monthly expense - you know that paying this way costs you extra I assume? Allowing that you have surplus income, I'd suggest starting now to put aside money ready to pay the year upfront at next renewal, then adjusting your car maintenance budget (which you will shortly have in place, yep?!) to take account of it going forwards. Remember also when setting the car maintenance budget that it should also include for things like replacement tyres etc. Currently we stick aside £145 a month for 2 new-ish cars (2016/17 plates) to cover insurance, servicing, MoT Tests, tyres, and all the other incidentals like cleaning, consumables etc - basically everything that isn't diesel. 

The £150 for holidays including school trips - it may be worth doing some maths to ensure that this figure is actually going to cover anything - as the kids get older the costs of school trips is likely to increase and by the time the odd short break is factored in I could see there not being enough left to cover even a fairly short family holiday. We noticed this year that the costs relating to holidays have really increased - cost of living crisis related I suspect - so this is definitely one to give some thought to.

Other than that - your planning to clear the debt seems pretty solid. Personally I'd be looking into OP'ing that loan - or if you can access a 7% regular saver stashing money in there for a year with a view to then clearing it once that matures. Alternatively - you say your credit file is looking healthy so is there the possibility of a 0% money transfer card that would let you clear the loan and transfer that debt to 0%? 

So I have a back up of the spreadsheet on the cloud but if all else fails - I will be able to find everything through my bank account. I have S.O's from my "main" account to my "billing" account, it wouldn't take me very long to re-do my spreadsheet  

So I know I spend within my means, the "problem" is that I spoil the kids. I don't give them pocket money as when I tried, it didn't work and I think something that needs to be revisited. For example: I know each week DD2 goes to a club. It *should* be 50p each time, but it never is because she will want a drink / sweets / "so and so has £2" so instead of being £2 a month, its now £10+ - So I think this is where pocket money would be a good play. It would also learn them to manage it! 

I've been "around" a while, but its always good to have fresh eyes go over something so I really appreciate the feedback  

The house - its likely to be a forever home, I grew up in this house, so did my dad, so I have a very sentimental attachment to it. My partner is also not in a position to ever be able to buy a house. The area we live in is having a little bit of social engineering happen, we have had some new houses built, some new facilities and we are right in the countryside so lots of nature around us so its an ideal place to live with an easy enough route into the local city. Around 30 min away is a train link straight to London. The only downside is that some of the people are less than savoury around us!  

The road tax - I pay annually and then save it over the year if that makes sense. 

Car maintenance, that's an as and when at the moment but it is something that I need to set up. Thankfully its been reliable but I know this might not be the case for much longer as it ages! 

School trips - DD1 is GCSE year now so there wont be any more trips. Grandparents usually contribute (I know I shouldn't rely on this) - DD2 is year 7, her first "expensive" trip will be in year 9 and will be a ski trip. They usually take payments over the year which is around £100 if I remember rightly from DD1 however the costs are bound to go up given inflation. 

The only "negative" on my credit score at the moment is "Account Stability" - I haven't changed banks for a while but I do change utilities, mobile etc when the contract is up. at the moment I am "saving" for one of my debts to be paid off in a bank account earning interest The BoI loan though is a fixed monthly amount so I cannot do that with this.