My accountability thread - diary of an in-denial credit card spender

lookbook

MissMaud said:

So, I got paid yesterday and my resolution not to spend anything has not started well.  I spent £62 in Tesco (groceries, wine, and a restock of cat food for my three cats), and then today I spent another £38 in a local supermarket.  Plus £10 on diesel to fuel these unnecessary journeys.  So that's over £100 gone in just two days.  No wonder I have no money.  I need to address the reasons why I spend like this or I'm just going to keep getting in more of a hole.

I don't expect anyone to read this, but it helps me to get it out of my mind and into words!

We are reading this. 

Sarahwithlove

It sounds like to me that whatever we sau you have decided you need this 2nd property. Personally I would sell it and downsize and rent a room out to a lodger or just pay for air b n b for odd days you go. But then I commute to office once a week which takes me 1hr 25 mins. No denying it's a long day but far cheaper than renting or owning somewhere for once a week. If they did decide you have to go in twice a week you could always look at buying somewhere else that you can afford to run as you would be debt free at that stage and hopefully have a better handle on your finances. This is last I will say on this topic. 

I would keep contents insurance for peace of mind, we all hope nothing happens but sometimes it does. Recently there was a fire locally that ended up spreading across 4 houses. One of them didn't have contents insurance and a go fund me page has had to be started for them. 

Emmia

MFWannabe said:

Personally if I were you I’d sell the second property; pay off the debts and be debt free 
I’d also cut up the credit cards! 

Put the proceeds from the sale in a high interest account and you’d be in a very good position 
looking at your soa you probably spend around £600 per month keeping the house? Just to stay in when you go into the office? 

How often are you in the office? 

MissMaud said:

MFWannabe said:

Personally if I were you I’d sell the second property; pay off the debts and be debt free 
I’d also cut up the credit cards! 

Put the proceeds from the sale in a high interest account and you’d be in a very good position 
looking at your soa you probably spend around £600 per month keeping the house? Just to stay in when you go into the office? 

How often are you in the office? 

I'm meant to be in the office two days per week, but it's not at all enforced and no-one on my team does it, so I've only been in once in the last three months!  I just keep worrying if they change the policy to make us come in more often, that I would regret selling the house. And to be honest if feels like the only actual wise financial decision I've made in my life, to buy a house in a good area that will increase in value (hopefully).  That is the real crux of the matter.  

I have cut up the credit cards!  But I still use them to spend online.  I honestly think I need to burn them.  Not joking.  It will take some serious intervention.

Each visit to the office you've made in 3 months has effectively cost you ~£1800 in accommodation, that's before food, transport etc., rooms at the Ritz are cheaper! As you visit so little, you also risk something like a water leak going unnoticed for an extended period causing lots more damage, which it doesn't sound like you're in a position to pay to fix.

I understand the attachment you have to having your own spot, near work/friends etc., could you either sell the city place and buy something else that is cheaper (if you must have two properties)... Or spend the money to bring it up to scratch to rent it out - so you might benefit from future price rises. 

What would need to be done to the city property to make it suitable for renting?

Alternatively could you rent out your current main residence and move to the city/near work?

enthusiasticsaver

First of all it looks like your SOA is incorrect if you have spent £100 in groceries in just a few days as that is half your monthly budget.  You have not budgeted at all for takeaways. I would go cold turkey on the credit cards as it looks like you have fallen into the trap of considering them as your emergency funds when you run out of money.  That never ends well. 

Is that contents insurance for the year as almost £90 per month is extortionate?

On a relatively average salary you cannot afford to maintain two properties even if one is mortgage free. I think you need to  have a good think as to where you want to live and then sell or rent one out.  

Scott_Weiland79

MFWannabe said:

Scott_Weiland79 said:

Random question here but are you doing anything extra too boost income etc?

Re going into the office I would only go in when you absolutely have too, if I go into the office its extra cost ie travel costs etc.

Re contents insurance personally I wouldnt bother unless you can click a good cashback deal like 50-60quid. Personally we don't pay contents insurance we have an emergency fund for that. Putting 20-30 quid in a savings account is a better option trust me, whats the point in having contents insurance you could pay hundreds for it over the years and never need it. Plus think of it this way if you put 25quid per month into a savings account and say you get an expected bill you have that money there then you can gradually replenish the account and your gunna earn interest. Win Win rather than lining an insurance companies pockets

Totally disagree with the statement reference contents insurance, contents insurance is not very expensive, approx £5 per month and covers everything in your home from tvs to carpets etc, that can amount to tens of thousands of pounds to replace should you have a fire or flood for example 

If they live in a city its highly unlikely they will get contents ins for 5 pounds. And yes they could have a flood but they also may not its not very likely unless they live on a flood plain.

MissMaud

Thank you for all your comments and advice.  I haven't been online for a few days but I'm taking it all in and it's very much appreciated.

I've redone my SOA as advised, with budgeting (as best I can imagine) for everything I need and spend on, rather than rely on credit cards.  It is not good!!  When I take the free money credit cards away I have so much less wriggle room than I thought.  I'll paste it in below - or maybe see if I can edit my original post.

This is a very real wake up call and is very frightening to me, but also in a weird way a relief, because in my mind I always thought I had plenty of money and just couldn't understand why I was constantly broke.  Knowing the truth is in some ways very freeing.

ETA: I have updated my initial SOA post.

MissMaud

Please could anyone advise me on this - I am overpaying the minimum payments on my credit cards by about £350 a month spread between them all, and I thought this was a good thing to try to knock down the debt by the time it comes for me to remortgage in May next year.  But am I doing the wrong thing? 

If I add on this realistic payment to what I've put in my updated SOA, then I am just about breaking even or at a small loss for the month - assuming I keep on budget and don't overspend anywhere (and I am a compulsive spender, I recognise that as a failing in myself).  

I honestly don't know what is the best way forward here.

curly_moose

Hi MissMaud, there are lots more experienced and knowledgeable people here than me, but looking at the time you posted last night (this morning), it seems like what to do is playing on your mind, and I might be able to help…

It looks like you’re still spending on your cards, in which case the first thing to do is stop using them completely. Overpaying while you’re still using credit is like trying to fill a bucket with a hole in it. (Not entirely futile but not the best way of doing it).

In the meantime, since your interest rates seem to be on 0%, I’d be inclined to pile up the spare cash you’ve identified. This has a dual function of an emergency fund to help you move away from relying on on credit when anything unexpected comes up and testing whether the budget you’ve set is actually realistic. You can always use the cash to pay down the debt later on.

Finally, it might be worth checking out Dave Ramsey on YouTube. He’s an American financial ‘guru’ with a specific approach to tackling debt. He’s a bit of a scorched earth zealot about it, but his baby steps aren’t a bad place to start as you work out what works for you. 

(Ps. I second that not having contents insurance is an absolute false economy. Mine was not much more that £5 a month - living in a student area of a city - and included the loss and theft of high (to me) value item.)

onomatopoeia99

You're spending 300 on groceries.  Like you I'm a 1 adult 0 children household and spend half that.  Have you looked into what you're cooking as it feels like a lot.

MFWannabe

Scott_Weiland79 said:

UMFWannabe said:

Scott_Weiland79 said:

Random question here but are you doing anything extra too boost income etc?

Re going into the office I would only go in when you absolutely have too, if I go into the office its extra cost ie travel costs etc.

Re contents insurance personally I wouldnt bother unless you can click a good cashback deal like 50-60quid. Personally we don't pay contents insurance we have an emergency fund for that. Putting 20-30 quid in a savings account is a better option trust me, whats the point in having contents insurance you could pay hundreds for it over the years and never need it. Plus think of it this way if you put 25quid per month into a savings account and say you get an expected bill you have that money there then you can gradually replenish the account and your gunna earn interest. Win Win rather than lining an insurance companies pockets

Totally disagree with the statement reference contents insurance, contents insurance is not very expensive, approx £5 per month and covers everything in your home from tvs to carpets etc, that can amount to tens of thousands of pounds to replace should you have a fire or flood for example 

If they live in a city it’s highly unlikely they will get contents ins for 5 pounds. And yes they could have a flood but they also may not it’s not very likely unless they live on a flood plain.

A flood doesn’t just mean if they live on a flood plain 
Burst water pipe? Boiler issues? 

You need to think what it would cost to replace everything inside your home, trust me that is a lot of money
and yes I live in a city and my contents is £5 per month