Budgeting advice

missis2024

Hi there 
I've been trying to sign up to the mse credit club to see what my credit rating is and was then planning to use the eligibility tool, before deciding how to consolidate my debt. But I'm getting stuck as one of the questions for the credit club is how much do your dependents cost. I have 2 children I have trouble working out how much they cost me! Some costs are paid termly, some monthly. How do I apportion the food bill? What about random school activities that always seem to come up unexpectedly. I want to get things accurate but I'd appreciate any advice. 

CliveOfIndia

Firstly, be extremely wary of debt consolidation.  It can work for some people, but all too often you quickly find yourself with twice the debt you started with.  You really have to address the underlying cause of the debt first.

And that's even if you can get a consolidation loan.  Since a lender has to take the view that a loan will be in addition to - not instead of - your existing debt, they may well decline you based on affordability calculations.

That aside, the simplest way to start budgeting is to look back over your bank accounts for the last 12 months and see what expenses you've had.  If you've spent £1200 over the year on school trips, for instance, that's £100 per month.

Food-wise, it's a case of trying to establish how much of the weekly food shopping goes to the kids.  Or, to look at it another way, how much would your shopping cost if you were only buying for yourself?

A good starting point is to fill out an SOA, select the "Format for MSE" option and copy & paste the results here.  We can then get a better picture of your situation and offer some practical advice.

https://www.lemonfool.co.uk/financecalculators/soa.php

missis2024

Hi there 
Thanks so much for you're reply, that's very helpful of you. I found it tricky to find my post and your reply for some reason but glad I have! 
So I have come up with a figure for the children and I have completed the MSE budget, which is showing I earn more than my expenses, so that's a relief. My downfall is not finding this sooner and so when bigger "one offs" have come up, I've just winged it and hoped for the best! I have discovered the piggy banking idea and this will help me HUGELY to, as you say, tackle the problem! I just need to know what I ACTUALLY have to spend!! 
I have done the affordability calculator for a consolidation loan on MSE and been pre approved for an ASDA one. I haven't been approved for any 0% credit cards and I believe this is because I'm at 60% of my credit limit. So my plan is to get this consolidation loan to pay both my credit cards down to 25% and to pay off my overdraft which I'm continuously in. Then leave it a few months and hopefully my credit score will increase because I'm not so close to the limit on my credit cards, allowing me to access 0% credit card balance transfer deals and transfer my remaining balances over to those and factor off paying those off in the 0% months. 
I know it sounds like a rather complicated plan but I'm not sure how else to do this with my credit rating affected in this way atm. Any further thoughts appreciated and tia for your time, much appreciated! 

RAS

Your new loan will also affect your ability to get new 0% cards. You need to stop and take further advice before thinking about consolidation.

The experience here is that people consolidate a couple of times before they hit the buffers, and by then owe a lot more than they did when they first consider a loan.

ManyWays

what interest rate is this ASDA loan? If you arent borrowing a lot, the rates can be very high.
If you could talk about how large your debts are, that would help, without some real numbers its impossible to guess if your plan has a decent chance of working or is just a fantasy.,
If you want a guess, it probably isn't going to work, as you are putting too much emphasis on credit utilization and not enough on affordability (as a lender will see it, not what you think is affordable), your credit score matters less than you think, so don't expect massive improvements in 0% offers from getting utilization down below what you think is a key level. 

missis2024

Hi there 
Thank you. Yes I will not rush into consolidation. I just want to do what's best. 
My debts are
-3567 on a first direct credit card with a limit of 5100 and an interest rate of 22.9%

- 5203 on an m&s credit card with a limit of 7, 400 and a rate of 18.9% 

- an overdraft of 2k which I'm in all the time and up to the max with an interest rate of 39.9% 

I have worked out that my debt is about 6k less than half of my annual income so I don't think I'm in a debt crisis as yet but I need to take stock and come up with a plan to pay it back. Should I just overpay on the credit cards, as much as I can each month? I can do some overtime to afford that. My overdraft is stressing me though. They are saying they need to review it and I'm worried they will just withdraw it? 
Thank you 

missis2024

Oh and the Asda loan I was preapproved for was 7k at 12.9% but I would just take out as much as I need to pay off my overdraft and bring the credit cards down below 50% of their credit limit? 

RAS

Why? 

You need to tackle your overdraft @ 39.9% first.

Bizarre as it may seem, you have £5.2k debt on a card with a £7.4k limit @ 18.9%??

So this next month, when you are buying essentials like food, you pay on the M&S debit card, rather build your overdraft. 

This won't reduce you debt, but it will reduce the average APR you pay for your debt

As long as, you only use the M&S card to cover essential items
You create a proper Statement of Affairs, see www.lemonfool.co.uk, or stoozing.com

You tackle the underlying issues that led you into debt.

It might be a period of unemployment, family crisis, gambling, trying to keep up with the Joneses. It really doesn't matter to us, it does matter to you, going forward.

missis2024

I did the MSE budget... Is that not good enough? I have factored in every single thing I can think of and for big expenses, broken it down into monthly and am thinking to open a Chase bank account and use the piggy bank method so I don't overspend and always know exactly what I've got. 
Does anyone know what to do if for example you're putting away 20 a month for school uniform but you've just started doing this and then sods law something gets lost and it costs 40 to replace and you've not built that up yet. What would you do? I'm using this an an example, I could source second hand for uniform, but you get my meaning hopefully. It'll take some time to build up the pots for the large expenses. 

 Thanks for your advice on the overdraft. I do really want to get rid of it. Being in the negative all the time is very disheartening, nevermind the astronomical interest rate. 

Many thanks 

Grumpelstiltskin

How old are your children?

Get them involved in saving money, tell them money is tight and they have to be careful with their clothes etc.

It's a lesson if they learn early they will take it through their life.

2021rdsunshine

Does anyone know what to do if for example you're putting away 20 a month for school uniform but you've just started doing this and then sods law something gets lost and it costs 40 to replace and you've not built that up yet. What would you do? I'm using this an an example, I could source second hand for uniform, but you get my meaning hopefully. It'll take some time to build up the pots for the large expenses 


in that situation you just have to cut down on other expenses I suppose. Like for example if you allocate £500 monthly for food and the uniform costs £80 you have to make do with £420 for food, if you know what I mean