My financial situation - where can I cut back?

ashmit

Hi All

After posting about the depressingness of debt here, I was encouraged by some very nice people to post my debts and outgoings here to see if anyone can help me shave a few £££ off my outgoings to help me pay off my debts sooner. I'm rather nervous about doing this as I've forwarded the emails to friends and family and I'm sure they could easily recognise me if they turned up so I will probably not leave the actual figures up for more than a week or so.

Right. I have three debts.
Mint credit card (presently 0% but rate ending soon, will hopefully be able to transfer): £1779. Presently paying off £43 every month and putting £30 into Cahoot account which is earmarked to pay this off (might as well earn the interest while it's on 0%). I am presently also saving up to pay our home insurance in one go next year so from next November I'll have an extra £20/month to throw at this debt.

Loan from parents £6700 (0%, just about to start 11-month payment holiday to pay for replacement doors and window in our flat before the present ones fall out) Paying off £100/month normally. This was to pay off my old expensive debts and lend me a deposit to buy my lovely flat.

Student loan of £3685. Presently deferred as I'm under the repayment limit, but the interest rate is 2.6% which equates to approx £10 going on a month so I've actually started paying back £16.50 a month, just so I feel like it's not going to overwhelm me. (Paying on credit card to get interest in money on current account longer and cashback ;D )

I've put all the figures into an excel spreadsheet and played around with them and the earliest I can come up with (assuming our salaries don't go up in the meantime) is April 2010 which seems a very long time away. I'd love to shave some time off that if I could. I'm playing the put-your-egg-money-into-cahoot-game and that date assumes that I can keep earning about £100/year interest to pay off a chunk of debt. Each time I get the interest it goes to pay off Mint, then SLC, then my dad.

As far as which gets paid off first goes, I'm working on Mint (as I don't know for sure how long I can keep juggling it between 0% balances), then SLC (as even deferred that charges interest), then my dad (as he is most flexible of all). If anyone has any suggestions about any other way to work this, please let me know!

Right: my outgoings (all figures monthly unless I've stated otherwise):

• Mortgage £321.00 (mortgage just swapped, happy with rate)
• Food £42.50/week for two of us, paid on credit card for cashback and interest free period (credit card paid off monthly in full every time - I've learned now...)
• TV licence £11.00
• Gas&leccy £60.00 (we underpaid for a while by accident - just about finished paying it off and have also now switched from Powergen to Sweb (very glad I'd switched when I heard about the price hikes!))
• Water £22.00 (keep meaning to go on the calculater and see if we would save having a meter)
• Buildings & Contents Insurance £24.00 (paid monthly - saving up this year to pay in one go and escape interest next)
• Life assurance (for mortgage) £16.00
• phone £13.50 max - also 18866/1899 bills max £10/month (realistically well under this)
• mobile max £5/week on Virgin, as is hubby
• internet £18.00 (broadband is my only extravagence!)
• AIUK £3.00 charity payment
• Honeymoon savings £12.50/month - we got married in March and I don't think we'll be having a honeymoon before, oooooh, 2050
• smile savings £31.50 (savings for dentists, birthdays, medical expenses, etc)
• halifax savings £22.00 (christmas money)
• travel £80.00 (saves for travel pass and visiting my parents) - this has been wiped out by a cousin's wedding in December so I've had to up the payments but they can come down a couple of quid from April 2005 which can go to the debt repayments
• council tax £83.00
• contact lenses £12.00 from local opticians - as cheap as Martin's internet lenses by the time you add the cost of solutions on to them ;D
• dyson insurance £6.00 - this is the only one I'm not sure whether we need or not. We bought a Dyson in April with wedding money and I've heard they break down a lot - is this worthwhile? Although I may not be able to get out of it without paying for the whole year - will have to check the t&cs.

Which just leaves living money £35/week. This covers everything else: all socialising, going swimming, toiletries, books, haircuts, water filter cartridges, clothes, CDs, etc etc. So far every penny I have coming of this £35/week is allocated until 16th December. The only reason it isn't allocated further is in case anything crops up round Christmas that my Christmas money won't cover.

After that there is £6.78 left over which I leave there as a buffer (if after a while there is a lot left over I transfer it to Cahoot)

So can you spot anything I could cut down on??

Thanks in advance to anyone who is kind enough to go through all this for me - you're a star ;D

Spendless

hi,
well re the Dyson my first one lasted 7 years and i've had my 2nd one now for 2 years without probs.
what about self-insure- cancel the policy but put the cash away in case of problems
( i don't always do this myself tho cas i have BG 5 star but thats cos i was once left in Dec with no heating or hot water, and a disappearing plumber for 3 weeks >:(, so i daren't risk it happening again)

re; the socialising - books - borrow from library or in my town is a market that buys/sells 2nd hand books. but library is FREE

CDs- do you need them? cut down -

mum a hairdresser so can't really answer you on this one but don't colleges do free hair appointments ???

swimming is there a leisure card with discount on available?

sure other people will think of stuff

Good luck

Spendless

re - your contact lenses - i'm in Westfield where you pay a set amount each month but can claim so much back for costs like dental/optical
there are other schemes as well. Obviously you would need to do the sums to see if worth your while.
Martin has done an article on it somewhere and is definately mentioned in his book (if you've got it)

ashmit

books - borrow from library or in my town is a market that buys/sells 2nd hand books. but library is FREE

I do normally get second hand books - I read voraciously so like buying them, although I should go back to library for seeing if I like certain authors I'm interested in.

CDs - do you need them? cut down

I very rarely buy CDs, even though we're also music fiends, but some things I do have to have hubby gets DVDs regularly but 99% of the time he trades in old stuff to get them so it's not actual money that goes on them.

mum a hairdresser so can't really answer you on this one but don't colleges do free hair appointments

God yes they do but I went twice and they messed my hair up (and my hair is supershort and I thought un-mess-up-able!). I pay £19 every 6 weeks but do really want to change my hairdresser so if anyone knows a good cheap one in Newcastle please let me know!!!!

swimming is there a leisure card with discount on available?

It's £5 odd a week - I only swim once a week normally (2.90) so not really worth it at the mo.

The contact lenses - I looked at the health insurance schemes and they weren't worth it for me, even though my work does a cheap one (and hey, I'm nearly short sighted enough to qualify for free eye tests - yay - kinda!!!!) ::)

Socialising I rarely spend anything on - used to go out with the girls once a month and spend £10-15 getting tea (happy hour pasta) and a drink or too but been too broke even for that recently

Thanks spendless - you've sent me back to the library if nothing else!! ;D

Mrs_Thrift

Hiya Ashmit,

Hope these ideas can help a little (sorry if I sound too bossy, I have a tendency to be known as a strict Mother Hen among my friends!)

- Food £42.50/week for two of us, paid on credit card for cashback and interest free period (credit card paid off monthly in full every time - I've learned now...) Like the way you’re using the card for the cashback, but can you maybe cut down the food bill a tiny bit? At a push, we can keep it down to about £30 a week for two, including food and drink we take to work for lunches and snacks. And every so often we can do a week where we just eat everything from the cupboards and freezer (gives some interesting combinations!)

- Life assurance (for mortgage) £16.00 Do you definitely need this? You might find your employer has a scheme which covers you.

- mobile max £5/week on Virgin, as is hubby £5 a week sounds like a lot to me – couldn’t you cut down the number of calls you make and texts you send?

- internet £18.00 (broadband is my only extravagence!) Personally I do without this, but I know how hard you broadband people are to persuade that you don’t need it!

- smile savings £31.50 (savings for dentists, birthdays, medical expenses, etc) I’d say the same for birthdays as for Christmas (see below.)

- halifax savings £22.00 (christmas money) If this is every month for a year, you’ve got £264 for Christmas – do you really need that much? I know I might sound a bit bah humbug, but you really don’t have to spend much on Christmas. Explain to family and friends you’re cutting back and why, and they might even welcome the chance and encouragement to do the same. For people you really want to give presents to, there are some fantastic ideas for cheap (mostly homemade) gifts on the Old Style Board. And I’m sure the effort you put into making or baking something would be very much appreciated. Make it a challenge between you and hubby to spend the least and still give the best gift!

- dyson insurance £6.00 - this is the only one I'm not sure whether we need or not. We bought a Dyson in April with wedding money and I've heard they break down a lot - is this worthwhile? Although I may not be able to get out of it without paying for the whole year - will have to check the t&cs. As Spendless says, self-insure would be more worthwhile. After all, if the worst comes to the worst and your Dyson breaks down, you don’t have to replace it with another, you can always buy a cheaper cleaner, and it won’t hurt to not hoover for a couple of days till you get a replacement.

- Socialising – can you cut this down even further by having people over to your flat and encouraging your friends to do the same? Doesn’t need to be anything big and fancy. We can feed 6 with pizza and crisps, etc. and provide a few drinks for the price of a couple of rounds for the two of us in the pub, and you can ask people to bring their own drinks.

- Toiletries – Of course, I don’t know what brands, etc. you’re buying, but I’ve been experimenting recently and have just found a 99p (for 500ml) shampoo and conditioner that seems to be as good as the £2.00 (for 200ml) ones I was using. Can’t remember what it’s called but it’s quite new. It’s definitely worth looking around. In general, I think most cheaper versions of toiletries are as good as the expensive ones. Also, cutting down the amount of product you use each time makes a difference. You only need to use a dot of body wash if you use a mitt or one of those scrubby things (my memory’s deserted me today!) And washing your hair less often actually improves the condition of it (well, it has for me!) and saves on shampoo!

- Clothes –Second hand shops are good, but also places like TK Maxx, and those cheap women’s clothes shops with names like “Expose” and “Hypnotic” are great if you’re prepared to hunt and find the bargains. Yes, some of the cheap clothes do look cheap, but loads don’t and are often from other, more expensive shops without the tags.

- CDs, etc etc. – Again, it’s just a case of cutting back, I think. Also, if you let your friends know that you’re cutting back they might be able to lend you CD’s, videos, DVD’s as free entertainment instead of spending money on rentals and the cinema.

Mrs_Thrift

Oops, just seen your reply to Spendless about the socialising. But you could still spend time with your friends, even if it's just drinks at your flat, and they bring their own. You can still dress up for it so it feels a bit more special!

Because we got married recently and spent money on our honeymoon and are now trying to build our savings up for a career change (all hush hush just now :-X ) I've been telling friends that we need to cut down and cut back, and they've all been fantastic about it.

Last Friday I had a great night out that only cost my petrol - drove to my friend's house where she had rented a DVD and I drank orange squash as I was driving, which she was more than happy to provide as it was an unusually cheap night for her, too! But it was great fun, and a better way to catch up with the gossip than in a noisy, expensive pub! I still put my make-up on, though!

ashmit

Will look at the rest later (have only got a few minutes this time!)

- Life assurance (for mortgage) £16.00 Do you definitely need this? You might find your employer has a scheme which covers you.
It's a condition of the mortgage that I have it *somewhere* I think. It annoys me though as it means I'm worth far more dead than alive as if I died this would pay off my flat, and my pension would pay out about £64k. Hubby would be rich *sigh* But I might be able to find a better deal.

- internet £18.00 (broadband is my only extravagence!) Personally I do without this, but I know how hard you broadband people are to persuade that you don’t need it!

It's only £3 cheaper than the rate we were on before ;D

- halifax savings £22.00 (christmas money) If this is every month for a year, you’ve got £264 for Christmas – do you really need that much?

Travel for us both to go visit my parents is £100, which means it's only £164 (and this year £140 as I put it up part way through the year). And most of the pressies I'm doing are homemade - calendars and personalised crackers.

- Socialising – can you cut this down even further by having people over to your flat and encouraging your friends to do the same?
Normally the socialising is going out on leaving dos etc with work rather than anything else, which I could not go on... but when people I like are leaving/getting married/having babies I can't help myself Although I do save up in advance. And I should admit that I'm leaving my current job soon and am having two leaving lunches and one evening do - I kept finding that people couldn't make my evening do but not everyone can make the same lunch date either - but normally the person who's event it is gets their bill split between everyone else so hopefully this will happen for one of them at least!!!!!

Will look at the rest later

jo_b_2

I think you're doing quite well to have drawn up this budget and to have such a good idea of where all your money is going.

There is definitely some room to maneouvre within your food budget though. £40 a week seems a lot for two adults and no children. Have you tried different supermarkets (the cheapies such as Aldi or Lidl.) Perhaps internet shopping may be cheaper because you avoid some of the temptations that you might spot on offer and actually end up spending more 'getting a bargain.' ::) How many times a week do you shop? I find that sticking to one bumper shop a week keeps costs down. Again, just reduces the temptation to buy those little extras.

Like others have noticed, your mobile costs seem a little high. I know talking to people keeps you sane and can cheer you up if you're not socialising very much. Just try to keep a balance. If you tend to call/text your partner during the day, try to stop. Maybe slip a note in his bag/pocket or something and wait until the end of the day until you speak.

I would definitely stop paying off the student loan, certainly until you have paid off your main cc debt. The interest on the loan is less than that paid by your savings account. You are effectively making money on that debt.

Make sure you spend quality time with your other half and don't get obsessed with your financial situation. If you've got somebody who loves you, you're already a lot better off than many other (financially well-off) people.

ashmit

I thought I wasn't spending all that much time on mobile calls or texts so i just went back through my payments to see what was going on - til the end of sept i was spending about £5/week but i'm actually now only spending about £5/fortnight, so that's good I'm not sure why though!

God, I remember spending £40/month on the mobile as standard (when I was living in York and hubby lived up here and he didn't have a landline) - ah, the bad old days ;D

Spendless

ashmit - when you put travelling to parents -do you mean by train? is there not some sort of discount/discount card :-/

re the haircuts - this weeks womans own voucher for free hair cut - but would take a browse in it first b4 buying to check the salon chain is near you (might save you one lot of £19 )

ashmit

We stock up on a lot of basics at Lidl. there is an Aldi much nearer to us but IT'S NEVER OPEN! Drives me mad!

Funnily enough, someone started a discussion on the discussions board after i asked what works out cheaper, internet shopping or 'in store' We only shop once a week. But we get tons (and I mean tons) of fruit and veg - a large proportion of our food bill is based on that, which i think is why it seems so large to people.

So is the general consensus that I should stop paying off the student loan and save that money instead? Even taking this into consideration (as posted on my original thread):

But the point of this exercise is that I'm trying to pay my whole debt off sooner, and even while deferred it's got interest charged on it so if I stop paying it'll just take even longer. I had thought I should save the money and earn 4.5% approx net, but it hardly seems worth it for such a small gain, and I kinda think I should be paying it off to make it easier for current students. But that last bit might be Insane Troll Logic (TM Buffy).

I earn 5.5%, approx 4.5% net, and get charged 2.6% on the student loan - it's such a small gain it doesn't really seem worthwhile. Would it really help me pay it off sooner??