Need fresh eyes on my budget!

honeybee1234

@Thanks @ellenvan and @foxgloves and I really mean that!

Yes, it was a shock. I can't put it all on them though as I saw the notifications pop up so I knew it was happening. I simply didn't appreciate just how many accumulated. I was probably avoidant as well... Of course I don't relish the prospect of saying "no more", but having people outside of this saying tough love sounds appropriate has made me really consider how this could affect things into both our futures if it carries on.

I'm not close enough distance wise to see the finer details of why they're not making packed lunches, why they're not doing regular grocery shopping etc so I'm going to approach it in a frank way of "this can't carry on financially but what can I do to support you practically?" I've already offered help with budgeting and sent links for UC and council tax benefit and the Discretionary Support Fund so I've ticked the obvious boxes.

I'll report back when I've had the conversation.

Dakota_Rose

Good luck with the conversation @honeybee1234 I imagine you will feel nervous about having it, but it really does seem like it’s necessary. Sometimes loved ones just don’t realise the impact of regular small acts. Just as small savings build up to make a really positive difference, lots of small withdrawals/loans can bring things crashing down.
I am sure when you explain that you already have a low budget to work on and the help you have tried to give has taken you over by such an amount, they will appreciate the position you are being left in and look for other solutions to manage their own budgets.

Mands

https://forums.moneysavingexpert.com/discussion/comment/81889798#Comment_81889798

It's a bit like new socks, in a way. When someone else is funding the new-sock-acquition socks are boring, low priority and unimportant. But when we start buying the socks we suddenly care an awful lot about value for money and necessity. "Someone else's money … no big deal. My money … of course I'm going to be careful with it." There's no malice, just thoughtlessness.

Regarding your shame about the debt. You have finite energy. We all do, but it sounds like you have fewer spoons. So that needs building into your plan.

You could continue to beat yourself up over the debt. OR you could say "this is where I am, I wish it was different but it's not" and then use that finite energy to move forward rather than be unkind to yourself. It's done, you can't undo it. But you can change the future … you already are.

honeybee1234

https://forums.moneysavingexpert.com/discussion/comment/81889778#Comment_81889778

Good LORD that is an insane amount! That's actually really resonated with me @Blackcatsand fuelled my determination to sort this out. To feel like I'm a part of their profit makes me so frustrated and I need to remedy that immediately!

It reminded me to sort out a balance transfer offer I was accepted for. So I've just balance transferred 1080.00 from my Nationwide credit card to my Vanquis 0% card, which is 0% for 16 months. I still have 349.53 left on the Nationwide card, so I'm going to start with paying that down for a small initial win.

I need to update my cc totals with this in mind. Should I close the Nationwide when it's paid?

honeybee1234

https://forums.moneysavingexpert.com/discussion/comment/81889896#Comment_81889896

I am certain that when I share the amount they've spent, they'll be mortified. I don't want it to sound as if I have a completely uncaring and selfish grown child. I'd say more one who's constantly rushing through life and not stopping to sit down and add a dose of forethought and planning. That's to say I believe their situation is one that can be easily adjusted just with a budget and thinking ahead.

liselle

Can I suggest, when they’re a bit more sorted, that they open an account with a Credit Union.If they pay in even £10 a month, they’ll soon be eligible for a loan at a preferential rate, whilst continuing to save the £10 a month.Thus the monthly savings becomes a good habit, and the loan repayment period can be chosen to suit the lender.Or, if preferred, of course the savings can be withdrawn but the monthly savings continue.A good safety net all round.

honeybee1234

https://forums.moneysavingexpert.com/discussion/comment/81890250#Comment_81890250

Fully agree with the new socks analogy! It's so true.

I do generally subscribe to the "can't change the past but can change the future" thing but it's so easy to feel overwhelmed at 4 figures of debt, and then the feeling of wheels spinning with paying the monthly payment and the subsequent interest payment that's more than the minimum? Total shutdown.

I've just done the balance transfer but I have a handful of questions I'm not sure about with my budget generally. My tendency has been to work to a zero sum budget, my main account I'm paid into has all my bills etc come out at the start of the month, grocery funds are transferred into a separate pot, then I allocate funds to pots and whatever is left is my spends.

Only...

I always go over my grocery budget.

I always need more spends - I think I use this as a catch-all when I could utilise my pots more.

I get caught out with surprise expenses each month, eg this month youngest needed a new school blazer (unplanned) and other DS blindsided me with needing money for a barber's appt an hour before he went. Arguably these things could be planned for in a more general sense.

I end up raiding my pots for grocery money 3/4 of the way through the month.

I need to work out how to adjust what I'm doing to work better, only I'm not sure how to do that exactly.

Dakota_Rose

A few questions to consider. No need to respond publicly…

Would a buffer perhaps be sensible until you have your monthly budget sorted and stable? This might work better than zero-based budget to start with?

Do you have an emergency fund at all? Would one, however small, help to manage the pot-pinching?

I think you said in an earlier post that your grocery money has been dipped into for all sorts of other expenses too. Are your pots actually working? Do you have enough pots to meet your needs? And do you spend a set amount of money on groceries per month?

Have you completed an SOA? Would you consider one so that others can help give a little better-informed advice? This is something others do regularly on the main debt-free forum away from the diaries and find really helpful.

One of the key pieces of advice I’ve read on here has been to budget for the amount you are spending in each category not the amount you think you should be spending. Once your pots are covering your actual expenditure, then you can start to work on bringing the spends down.

Sorry if I’ve overstepped the mark - meant purely as food for thought rather than an interrogation!

honeybee1234

https://forums.moneysavingexpert.com/discussion/comment/81890546#Comment_81890546

Thanks @Dakota_Rose for the thought prompts. They have been helpful, I've been sat contemplating them with my morning tea.

Thoughts...

A buffer is a good suggestion. I'm going to implement this for my March budget, and use March as a kind of 'trial month' to observe and see where my over-budget spends are mainly coming from. I can then adjust for April as necessary.

I do have an emergency fund. I was panicking that I had barely anything late last year, so I ended up stuffing all my spare cash from refunds/cashback/etc into an account. There's about 2200 in there so that's enough for now. I will definitely need to dip in for new tyres soon.

The difficulty with my pots is either:

• I never have enough time to get any kind of decent amount in before I need to use those funds, and as they'll be part-funded, I have to find the extra from elsewhere, or
• I have expenses where they don't fit in any of my current pots. So I use my own personal spends, which means that gets depleted and if anything else comes up in the month, I end up needing to raid other pots

I think maybe some catch all generic 'home' or 'kids' pots might be useful here?

Groceries is a tricky one. I'd say 75% of the time I am very on it. The other 25% is me going over because I've not bought enough/bad day and can't face cooking so buy something unplanned from the supermarket that I wouldn't normally buy as not in budget/I haven't held back enough for the last couple of weeks in the month.

I do have an SOA earlier in this thread somewhere!

I know you said I didn't need to answer these here but it might be useful to see my thinking and what's happening with my budget in case anyone sees any of these and thinks "oh yes, @honeybee1234 could adjust xyz/they could try abc instead."

foxgloves

Hi @honeybee1234,

When I first started budgeting, I had the same sort of problem with our savings pots as you. I started with just 6 pots which were Car Maintenance, Holidays, Clothes, Presents, Home & Garden & Leisure/Entertainment. I worked with this system for a while but as I got more confident with budgeting, I expanded it to 10 pots because as you are describing, there was expenditure coming along which didn't match any of these 6 categories or in the case of 'Home & Garden', this pot was just too wide to be meaningful. So I upped the total to 10 Savings Pots which are:

Car maintenance

House & Garden

Clothes

Optician/Dentist/Medical

Meow Fund

Appliances Replacement (this would be things like washing machine, fridge, toaster, etc)

Tech Replacement (to cover things like TV, laptop, phone, etc)

Presents

Holiday

Leisure/Entertainment

Then I thought, do I now have too many? But it works well for us & esp separating out Appliances Replacement because a new freezer or washing machine can take a hefty wodge of a Home & Garden Pot & I thought that if I kept that Pot separate, I could be confident knowing we could reasonably easily replace a large malfunctioning 'white goods'-type item. I also wanted to have Savings Pots for all those kind of expenditure we can foresee - i.e We have a car, so there will be servicing, new tyres, etc. We have 2 cats so there will be vet bills, TVs & laptops don't last forever, & Christmas arrives at the same time every year so needs planning for in the Presents Pot (Back in the bad old spendy days, I used to be soooo overdrawn by January & would feel sorry for myself, telling anyone who'd listened that it was 'because of Christmas'!) How much money goes into Savings Pots comes down to quite a lot of variables - amount of overall income, sticking to other budget categories, via-ing underspends, survey income, etc, into them, etc. Also, allowing a frugal period in the first year to allow them to build…..& of course, not dipping into them too often for unnecessary purchases, something I had to learn.

In addition to the Savings Pots, I have a monthly grocery budget, we both have a Personal Spends allowance, which I think I've mentioned before. Once we had got rid of the mortgage (I very much acknowledge that it does put us in a stronger position because of no longer having housing costs), I also started putting an agreed sum away each month ready for changing our car, & also into general savings, but that came quite a lot later. For the first several years of post-LBM, I just allocated our income into the above Savings Pots plus some into an Emergency Fund. I do think it needs acknowledging how much housing costs impact on a budget. We can only work within the parameters of what we have, so the priority job initially is to plug any money leakages, as it very much sounds like you are doing. I don't know if this post will be helpful to you or not, but I know I found it useful to find out how other people manage their day-to-day money when I was working on getting us both debt-free, & then in a more resilient financial position. I must say, you do sound determined & as someone who has also suffered from GAD in the past, I think feeling more secure may well help a little with that too. Keep thinking, keep making tweaks & keep analysing why certain unhelpful spending happened so you can be ready for an alternative solution next time.

F x