Stopping the backsliding… a family of four no longer living beyond their means

FlorayG

Bluegreen143 here's an idea
When is your mortgage due for renewal? Work out how much it will be costing you when you renew ( probably at more than 4%) and then every month between now and then PAY OFF THAT EXTRA AMOUNT from your debts first thing payday before anything else.
I'm suggesting this because when it comes around you're going to HAVE to find the money regardless of what you have to spend elsewhere, and if you start living on that reduction NOW, you probably can easily pay off all your CC debts by the time you renew

Bluegreen143

Thanks everyone! 

@FlorayG that’s a good idea in general. 

Re CC payment, I will be paid off within two month - if I can’t, I’ll need to pay interest on the card (purchases are interest free as long as paid off in under three months) and I’m not keen on that. 

The real tricky bit however will be paying it off AND not then using the card again to get by. That’s why I started this diary, because I realised I would drift into monthly credit card float use very easily this way and one day I’d stop being able to afford to pay it off in 3 months. I’d started thinking “oh we will be skint after I’ve paid £740 off the CC this month so we will put our holiday spending back on the card and pay off interest free over three months.“ 😳

I like the idea of working out what my new mortgage will be and living as if we’re on it. Will do the working out today, and no doubt get a big fright! 

Our mortgage is split in two - the main bit (around £102k owed) is at 1.9%, then the second one is £27k at 1.75%. (The second mortgage being additional borrowed from when we extended the house - we added a roofed conservatory so that it was fairly cheap but is used year round and doesn’t get too hot or cold unlike a glass roof!). 

I think the main mortgage deal is up in Dec and the second in March and clearly they will both go up hugely! We’ve gotten so used to only having £500 a month mortgage it will be a shock. 

Bluegreen143

Spendless said:

Hi

I remember your diary from the days before you returned to work. I agree with what foxgloves has said about personal spends/savings pots being more defined. That's exactly what I've noticed during my own journey to pay off debt (£105 left!) that we need to 'label' the various savings for x purpose otherwise when a curveball or two hits you don't know where you are.

I wouldn't cancel the critical illness. Both me and Mr S had one as we both owned property before we got together. Mine got to the end of the term without paying out, Mr S paid out when he was diagnosed with cancer. In both cases I'm very glad we had it.

Understand the parking charge problems. Our DD lived in Edinburgh for 6 months and it was horrendous. Sometimes we'd time our trips to see her to combine with when there was only a couple of hours left of parking charge time to minimise costs. 

Spendless, congrats on only having £105 left to pay off! 

vampirotoothus

Hi maybe also start looking at your loan to value and seeing if you can get down to the next bracket, which will reduce the increase. Good luck on your journey, you are now looking at it with clear vision. V x

Bluegreen143

I mentioned holiday spending in my post above. We are away (staying within Scotland) on the 5th August, thought I’d detail planned spends below. 

We’ve paid for the accommodation already, it was £880 for the week. We always stay in the same wood cabin, it’s so lovely and restful with an amazing view and no TV signal/internet 😍

Spends predicted:

- the place is about 1.5 hours drive from home so we tend to just use one tank of fuel to get there and back and about all week. £70 for a tank. 

- we always seem to spend a lot more on the holiday grocery delivery (we definitely do buy more treats and convenience things when away and some alcohol) but there’s nowhere good to eat out, except one cheap cafe, so almost every meal will be homemade/making picnics. I don’t see us spending much under £200 including alcohol. 

- activities - normally free walks/beach/fishing/sea swimming and we’re taking our inflatable kayak. We’ll take the kids swimming to the pool but that’s not expensive, maybe £20 max. The most expensive activity will be the day we hire a boat which costs £80. We’re planning a day trip one day but should be mostly free (as the trip is to a lovely walk) maybe with a cafe lunch and a mooch around the shops. I will enforce that we all use our own pocket money allowances to mooch around shops and amusements. 

I think a spending budget of £450 should cover it all including if we do a couple of cafe lunches. We can funnel a week of grocery budget (£100) into it so that’s £350 to find - I’ve saved £90 so £260 to come from Red’s pay cheque which seems very doable. 

But it will mean not putting into many other pots for this month. The credit card bill will come from my paycheque mid month and again reduces potential for other saving quite a bit. This is why I need to tighten things up and get on an even keel over the next 2-3 months and then I should be in a good position to save long term.

Bluegreen143

vampirotoothus said:

Hi maybe also start looking at your loan to value and seeing if you can get down to the next bracket, which will reduce the increase. Good luck on your journey, you are now looking at it with clear vision. V x

Always sound advice, but I believe we will already under 60% LTV within the six months before remortgaging, which I think is the lowest bracket for mortgage rates. 

This is purely based on the Zoopla mid-range value of the house being £211k - but Zoopla don’t know about the conservatory we added fairly recently which surely adds a little value, given it’s a whole extra reception room so I feel reasonably confident that the value is actually at the higher end of the Zoopla scale (Ie more like £225k) and that we are already under 60% LTV.  

I think overpaying the mortgage in the next six months would be very ambitious in any case but I can always try my best to get in a situation where we have extra cash to throw at it 🤞🏼

I’m very tired today as the crazy dog woke us up continuously barking 😂 he is used to living in the countryside and I think a neighbour came home late and disturbed him. Only a couple of days til my parents collect him!

Red said it was probably a good thing to remind us why we don’t want a dog, as it’s not been bad otherwise. Fear not for my budget however, readers, because if a dog moves in here I’ll be moving out!!!! I am NOT a dog person!

(I did tell Red that if we get anything to wake us up at night and cost a fortune it’ll be another bambino. Unluckily for me (but luckily for our budget) Red does not share my “the more the merrier” views on family planning so I think our budget is very much safe there too 😂😭).

Red is out picking up his mum now. He’s going to stop and get toilet roll and bananas and is under instruction not to deviate from the list - so there will be a small grocery spend today. 

Bluegreen143

Good news from Red’s mum’s appointment. The cancer hasn’t spread and is just in one breast, and they think it will respond well to surgery.

Worked from home today then took the kids to a playpark to meet friends. Realised you could park a few minutes’ walk away for free, as the playpark is near the edge of the parking restrictions zone, so did that 😇 

Made lentil soup in the instant pot during the day and it was very nice not to worry about the time for getting home to make dinner. I’ve frozen the rest of the quiche now so between leftover soup and frozen quiche that should be some lunches sorted for me next week. 

I’ve realised that we have a couple of extra expenses coming up in August, will do a post later planning it all out. 

Ooooh in other budget news. I’m having to bow out of a ticketed event with friends next weekend as I double booked myself and have another friend’s birthday celebration the same day. One of my friends invited someone else who bought my ticket so they sent me the money back today - £45 back in my personal budget 😊

Spending

Red spent £5 on toilet roll, bananas, scourers and antibacterial spray. 

He also put petrol in the car - £69. Necessary but unbudgeted for and I’ll need to move some £ around the budget. 

Meals

B - strawberry and banana milkshake for me; cereal for the kids

S - little tubs of fruit for the kids 

L - HM quiche, baked beans and the kids had some bread and satsuma too. They didn’t like the quiche but experts say it takes 15 tries for them to get a taste for something - 14 to go! 🤣

S - I felt knackered after a poor night’s sleep so succumbed to a mini cupcake at home then a couple of little cookies brought by the other mum at the park! Kids had banana and some of the treats the other mum brought. 

D - lentil soup & HM bread 

Spendless

That's positive news for Red's Mum.

Re the CC have you identified why (rather than what) you are spending on it? As we pay off our own debts we realised we still needed a CC, so got a CB one. Each month we sit down with a detailed spreadsheet and decide which bank account that comes out of, we have my wages, DH wages, a joint savings account for family 'biggies' and a savings account for DD's uni expenses. There's some flexibility in this eg I was out of work for 4 months earlier this year so nothing came from 'my wages'. By doing this though I have been able to easily identify things when we were just 'sending the bill to the future' so I stopped the amazon purchases being ordered that way (I'm not the culprit here!) and if we plan to have a meal we discuss in advance how we intend paying for it. Some things we may need to put on the CC as that makes sense for having insurance with the purchase, but the bill for it needs to be split over 2 paypackets for the month currently in and the one after before interest applies. That's for big ticket items that you haven't had a lot of notice over. For us that is 2 'holidays' one is my flight for accompanying DH on a work trip (no say of when it was), the other is a 'life curveball' one because our DIL has left DS (for someone else) less than a year after they married. It came out of the blue and as he approaches what would have been his 1st WA we want him out of the way and 'distracted'. The next step of my journey would not be to need to do the previous at all and to always have the money saved, and purely use the CC because I'd rather have my money sat in the bank making more until the last minute but it's all stepping stones to get there.   

beanielou

Good news for your MIL.

Bluegreen143

So looking at “out of the usual” things happening in August - bearing in mind I’ve not really got money in my pots since I started YNAB again 10 days ago - so these need to be funded from this month’s salary.

- MOT due (cost depends if work is needing done). I currently have £290ish in the car maintenance pot. 

- garden waste bin annual permit £50.

- holiday £450 spending budget as detailed in a previous post. I have £90 in this pot and will be able to take £100 from next month’s grocery budget.

- pizza oven party for my birthday - need to decide on budget for this - roughly 10-15 adults attending and a few kids, we’ll put on some food (mainly HM pizza!) and get some beer/cider/soft drinks in. My sister is making me a cake.

I’ve also discovered that our road tax is due on the 1st September, not January as I’d previously thought 🤦‍♀️ 

Oh and as previously noted, I need to pay £740 off the CC on the 15th August to avoid paying interest…

So it’s going to be a bit of a squeaky budget for a couple of months for sure 🤣 however it’s such a relief to have all my categories set up in YNAB with date/amount targets and at least to KNOW where I stand!

edit to say thanks for the CC advice @spendless (and how awful for your son!). Tbh we have been overspending and overcommitting to things and I panicked and got the CC (after being debt free for years and not touching one in that time) because I knew I would run out of £ to do everything we’d committed to otherwise. Lessons learned!