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  • FIRST POST
    • Yellow_mango
    • By Yellow_mango 11th Jun 19, 8:49 PM
    • 254Posts
    • 393Thanks
    Yellow_mango
    Living in the black
    • #1
    • 11th Jun 19, 8:49 PM
    Living in the black 11th Jun 19 at 8:49 PM
    Having lived with quite terrifying amounts of debt for many years, we were fortunate to have been able to pay off almost all of it last year following the sale of a property. Remaining is about £5k on a 0% credit card, and £3.5k on another credit card which is paid off in full every month.

    We also recently bought a house and have an enormous mortgage.

    I have recently realised that I’m just tired of living in constant debt. Even though we pay off the cc each month, we’re still living in debt. The truth is we couldn’t pay it off up to date right now. We have little to no savings (which are pretty essential as owners of a 100yo house) and no control over our spending. Every month there are “exceptional” circumstances that aren’t planned for. Although we make very good money and are not increasing our debt, it’s a very stressful way to live. And I’ve had enough.

    So I’ve decided to ditch the credit card and move to a more cash based system. I’ve opened a new Starling joint account, which will be funded from what is left once bills are covered, and all spending will now be done from there. I’ve set up proper “pots” to save for irregular expenses, and keep that ringfenced and not available to spend. There is no overdraft, so when the money is gone for the month, it is gone.

    I know it will be tough for a few months at least, as we try to pay off the last couple of months spending on the cc at the same time as funding current spending. Plus we have a holiday booked in July. So saving has been put on hold for a few months until we’re evened out.

    I don’t really have anyone to talk to about any of this, so I’m hoping this will be a good place for me to think things out and record progress, even if no-one reads it!
Page 1
    • GlendaSugarbean
    • By GlendaSugarbean 12th Jun 19, 5:46 AM
    • 597 Posts
    • 4,416 Thanks
    GlendaSugarbean
    • #2
    • 12th Jun 19, 5:46 AM
    • #2
    • 12th Jun 19, 5:46 AM
    Best of luck!
    • NeverendingDMP
    • By NeverendingDMP 12th Jun 19, 6:27 AM
    • 392 Posts
    • 1,405 Thanks
    NeverendingDMP
    • #3
    • 12th Jun 19, 6:27 AM
    • #3
    • 12th Jun 19, 6:27 AM
    Good luck x
    35,213 - Jan 2018, 28854 remaining.
    Mortgage 77230- 73082 remaining.
    Make 2019- 1267/2019 EF =67
    • sysadmin
    • By sysadmin 12th Jun 19, 7:07 AM
    • 156 Posts
    • 97 Thanks
    sysadmin
    • #4
    • 12th Jun 19, 7:07 AM
    • #4
    • 12th Jun 19, 7:07 AM
    I did exactly the same as you at the start of the year. I was fed up living off the credit card float and moved us to a starling joint account.

    We're in a much better place with our finances now, and although its still tight. Its doable.

    I'll be paying off the last of our debts at around christmas time but have pots of money saved for everything aside from emergency's. Once the debt has gone (about £5k) then we'll start bringing that emergency fund back up.

    Our debts are not from silly things, but our wedding and needed a new boiler at the start of the year didnt help
    • Yellow_mango
    • By Yellow_mango 12th Jun 19, 7:21 AM
    • 254 Posts
    • 393 Thanks
    Yellow_mango
    • #5
    • 12th Jun 19, 7:21 AM
    • #5
    • 12th Jun 19, 7:21 AM
    Thank you all for dropping in! And I’m really glad to hear this is working for you sysadmin! I just suddenly felt so tired of trying to keep on top of things all the time, and had a need to massively simplify things.

    MrYM is not convinced. He’s quite happy the way things are and doesn’t really like change. But he’s going along with it. All he has to do is switch the credit card for the new Starling card for all his spending.

    So far I have transferred what I think we can afford for “discretionary” spends for the rest of the month into the Starling account, and set up a pile of “goals”. I have Car, Clothes, Holidays, House, Kids activities, and Xmas / birthdays. Of course none of them will have anything in for a while, but I wanted to get it all set up!

    I also seem to inexplicably be having a week of NSDs since I set up the account. So there is only one lonely transaction sitting in there (a transfer to pay for my daughters dance lessons). Though it’s her birthday on Friday so I will need to go shopping today or tomorrow to get her a present and some sweets to take to school.

    I’ve got a lot of birthdays coming up actually. My husband and my eldest daughters 21st in July, and my eldest son in August. So will need to build that into the budget. Have no idea what to buy for a 21st birthday. And she’s not giving me any clues...

    Anyway. Better get off to work and earn some more money!
    • FootyFanDan
    • By FootyFanDan 12th Jun 19, 7:53 AM
    • 120 Posts
    • 255 Thanks
    FootyFanDan
    • #6
    • 12th Jun 19, 7:53 AM
    • #6
    • 12th Jun 19, 7:53 AM
    Happy new diary and good luck.
    Debt Figure on 8th June : £6129
    Current Debt Figure : £5572.33
    1st Target: Repay Loan to Mum (£140/£540)
    • Yellow_mango
    • By Yellow_mango 12th Jun 19, 9:28 PM
    • 254 Posts
    • 393 Thanks
    Yellow_mango
    • #7
    • 12th Jun 19, 9:28 PM
    • #7
    • 12th Jun 19, 9:28 PM
    Some more rambling for this evening. I’ve spent half of today playing with my spreadsheets. And to-ing and fro-ing about what should come out of where. I’m having slightly cold feet about giving up the cashback on the credit card. But I am decided that this is the right thing to do. There’s just no accountability with spending on a credit card.

    I’m also getting myself stressed about retirement. No matter how I play it I can’t find money right now to save long term. Anything we do manage to save will be swallowed up by the house. It’ll need a new roof at some point, and we want to get an extension.

    I really don’t want to be working after 60. But we have just got a 25 year mortgage, and I’m already 41. So unless I can pull something spectacular out of the bag, retirement is not going to happen any time soon :-/

    Oh well. I’ll just keep plodding in for now. Hopefully things will be clearer once things have settled and I’ve started being able to fund savings etc.
    • lightbulbtime
    • By lightbulbtime 12th Jun 19, 10:11 PM
    • 24 Posts
    • 38 Thanks
    lightbulbtime
    • #8
    • 12th Jun 19, 10:11 PM
    • #8
    • 12th Jun 19, 10:11 PM
    Hi Yellowman,


    Good luck on your journey and glad to see you're keeping a diary. I'm 47 and just started my 23 year mortgage last year, I'll be keeping an eye on your journey to see how it goes.


    Lightbulbtime.
    • Yellow_mango
    • By Yellow_mango 16th Jun 19, 9:40 AM
    • 254 Posts
    • 393 Thanks
    Yellow_mango
    • #9
    • 16th Jun 19, 9:40 AM
    • #9
    • 16th Jun 19, 9:40 AM
    Nothing really to report so far, just thought I’d drop in for a quick update.

    My Starling account is up and running :-)

    We’ve had a few “unexpected” expenses (dh’s motorbike needed a new battery and a service - that was £275 all in). Plus my daughters birthday. All things that will hopefully be properly budgeted for and covered by savings pots next time they happen.

    So I now have £364.13 left in the Starling account for the rest of the month. I would really like to stick to this, but it needs to cover 3 weeks of groceries, and a takeaway this evening. Plus whatever else the month has left to throw at us! I’ll do my best!

    Last spend on the credit card was a week ago. There is a balance of £3113.98 on that card that will be due on 10 July. I also have final payments to make for a holiday of around £900 that will come off that card after the June statement date and so be payable in August. I’m not quite decided how to approach this yet. I was planning to just pay it off in full as usual, adjust as much as possible by not saving for a couple of months, and deal with the inevitable overdraft. Now I’m wondering if I should drop it to the minimum payment and treat it like another debt. Which would have the advantage of allowing me to budget a couple of months earlier, but would mean I’d be paying interest (at 15.95%) for a few months. Or I could balance transfer it to my virgin card at 0% (1.9% fee). That’s probably the cheapest option. Need to have another play around with my spreadsheet I think!
    • enthusiasticsaver
    • By enthusiasticsaver 16th Jun 19, 10:09 AM
    • 8,736 Posts
    • 20,253 Thanks
    enthusiasticsaver
    I think your problem has probably arisen due to fairly uncontrolled spending on your monthly spends card. You do not say what that £3.5k was spent on but it was obviously more than just normal day to day stuff. Even with three kids that is a large monthly spend so it is unsurprising you are uncomfortable with that. I would and the reason we stopped using credit cards for everything was by the time we had paid off the credit card in full and paid direct debits there was nothing left in the bank meaning we were forced to use the credit card again. It is a vicious cycle.

    A middle ground is the one we have taken and that is to only use the cashback credit card for food and fuel. We both have a card but it is monitored carefully. We also set a limit on the amount we will put on to the card which in fact works well as a budgeting tool. That means that when our pensions go in (we are early retirees) we allow enough to stay in there for direct debits/standing orders and an amount for joint entertainment, gifts, annual bills and household stuff plus a bit of leeway for miscellaneous. We have a savings account for car and house and holidays and an emergency fund which we don't pay into any more or draw out unless in emergency. We also have a personal account each to pay for clothes, haircuts etc and personal items. We both get the same and that restricts my DH from spending too much on his hobbies and me from going mad with clothes/shoes/books/make up and theatre tickets. You could do a similar system but also have an account for children's expenses like dancing lessons, birthday parties etc etc.

    I think moving to a cash based system is a good one for you but question whether you can eliminate that £3.5k in one month plus put aside your normal living expenses to live off. I would go hardcore for 3 months I think and pay it over that 3 months and maybe use the 0% offer to transfer it over so you don't have interest on it, only the BT fee.

    You probably need to get into saving more for things like holidays, car and motorbike expenses and birthdays. Was the credit card payment high because of putting a holiday on it or is £3.5k fairly standard for a monthly spends amount?


    Doing a proper budget and having more tight controls over spending will help with overpaying your mortgage and paying more into your pension, both of which will help you in the future.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Yellow_mango
    • By Yellow_mango 16th Jun 19, 11:08 AM
    • 254 Posts
    • 393 Thanks
    Yellow_mango
    Thank you! You’re bang on about the uncontrolled spending on the credit card.

    The £3.5k is a combination of day to day stuff, plus some holiday stuff, plus some DIY / new house kind of stuff. But if I’m honest that level of monthly spending is not that unusual. There’s always something “unexpected” to cover.... plus we spend a crazy amount on groceries and eating out / takeaways. With 3 kids that all eat like adults it really adds up fast. Getting that under control is a really high priority. I’m hoping that the Starling “cash” system will help limit that.

    I’ve set up a detailed budget which I think is achievable and I hope should cover everything, with some saving pot goals so hopefully we will have less “unexpected” costs.

    My budget suggests that we should have around £500pm to throw at the debt, including the cc. So you’re right that we won’t be able to cover it in one month, even cutting as hard as possible on regular spending.

    I have thought about it, and I think the best thing for me is to continue paying it off in full, effectively moving the debt to the overdraft. That will keep it most visible and motivate me to get rid of it ASAP. The overdraft is fee free for the first £1,000, and I think I should be able to keep within that, although it will take a few months before it’s gone and I’m back fully in the black and able to attack the other debt.
    • enthusiasticsaver
    • By enthusiasticsaver 16th Jun 19, 12:40 PM
    • 8,736 Posts
    • 20,253 Thanks
    enthusiasticsaver
    Thank you! You’re bang on about the uncontrolled spending on the credit card.

    The £3.5k is a combination of day to day stuff, plus some holiday stuff, plus some DIY / new house kind of stuff. But if I’m honest that level of monthly spending is not that unusual. There’s always something “unexpected” to cover.... plus we spend a crazy amount on groceries and eating out / takeaways. With 3 kids that all eat like adults it really adds up fast. Getting that under control is a really high priority. I’m hoping that the Starling “cash” system will help limit that.

    I’ve set up a detailed budget which I think is achievable and I hope should cover everything, with some saving pot goals so hopefully we will have less “unexpected” costs.

    My budget suggests that we should have around £500pm to throw at the debt, including the cc. So you’re right that we won’t be able to cover it in one month, even cutting as hard as possible on regular spending.

    I have thought about it, and I think the best thing for me is to continue paying it off in full, effectively moving the debt to the overdraft. That will keep it most visible and motivate me to get rid of it ASAP. The overdraft is fee free for the first £1,000, and I think I should be able to keep within that, although it will take a few months before it’s gone and I’m back fully in the black and able to attack the other debt.
    Originally posted by Yellow_mango
    That sounds like a good plan if the overdraft is fee and interest free. It certainly sounds like moving to a system where your spending is controlled is better if £3.5k is not unusual unless you have a very high monthly income.

    If you find yourself constantly having to find money to cover "unexpected costs" then doing an soa is worthwhile. Very few things should be really unexpected. Even if there is an essential house or car repair you should have some savings to cover that and most other bills can be anticipated.

    Getting the whole family on board with this is essential not only for you to get to grips with your finances but also to prepare your children for the future with regards to finances. If they grow up to think that mum or dad just flash a card and that is everything sorted then they will quickly get into trouble themselves when they are old enough to get credit. As your daughter is almost 21 she is old enough to get herself into credit card debt. I would instil financial discipline not only for yourself and your DH and them also. It is not a bad thing to say no you cannot do that as we cannot afford it this month.

    Do you have any emergency savings?
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Yellow_mango
    • By Yellow_mango 16th Jun 19, 5:25 PM
    • 254 Posts
    • 393 Thanks
    Yellow_mango
    We currently have no savings at all. Buying a house totally cleaned us out.

    I know I need to save and budget better. The trouble has been (excuses coming up!) that we have had a lot going on and a lot of changes. We have moved house 5 times in the last 6 years. Those 6 years also included a year of maternity leave (me) a redundancy (me), and a voluntary 6m career break followed by a salary cut (DH). Every time we seem to be getting back on track, something else happens to throw us off. I’m really hoping that now we have bought a house it will be our last move for many years and we can finally get ourselves properly sorted.

    I know I’m probably giving the impression that our spending is totally unchecked and we live very extravagantly. The reality is very different. I am constantly stressed about money, and constantly saying no to everything. None of us have bought any new clothes for at least a year other than school uniform. The holiday I’m paying for now is our only holiday this year, and we’re driving to France to stay in an Air bnb. We don’t seem to have any “fun” at all. Yet we’re still spending a LOT of money. It sucks and I need to fix it. I’m actually hoping that budgeting properly will allow me to say “yes” more often, knowing that we have the money saved to cover it.

    We do make a good income. About £8k take home (£5k his, £3k mine). But our expenses are also very high. And DH is not really on board. He basically thinks that he works hard and makes a good wage, so he should be able to have a curry when he wants. And he does work very hard. And his salary is very good.

    I’ll post up my budget when I get a chance.
    • enthusiasticsaver
    • By enthusiasticsaver 16th Jun 19, 7:58 PM
    • 8,736 Posts
    • 20,253 Thanks
    enthusiasticsaver
    Ok that makes sense if you have just moved and unfortunately very high earners are often the worst at managing their finances. Maybe ask him what would happen if he lost his job or was ill and you have presumably a high mortgage and no savings? Very little state support these days for those who have a mortgage rather than renting. Also ask him whether he wants to be working in his 60s assuming his age is roughly the same as yours and how you will afford the same lifestyle without putting a lot into pensions? A heavy dose of realism may be needed as things can change just like that in a matter of days or weeks as evidenced by many diaries on here. I always say hope for the best but prepare for the worst.

    The problem is you are going to encounter problems if you are doing this alone but on the other hand your debt is comparatively low, you seem more financially astute than your DH so can you maybe start by reining in the house expenses by prioritising what needs to be done rather than what you want to do to the house? Why are the expenses high? Expensive cars and high mortgage? High childcare costs?

    Sitting down with him to discuss a budget when you are not both stressed is a good start. I have a DH who is a fritterer and has expensive hobbies and he often thought as your DH does that he earns a decent wage so why not spend it. I forced him to look at our outgoings and forced him to choose on the budget lines so he knew if he spent £300 on a new tool then something else would have to go like the sky subscription or a short break away or takeaways/clothes. He never really got on board with budgeting so I did it all for a while just constantly juggling budgets so reducing food or only buying one school uniform and having to wait a month for the other child to get one until I threw my toys out the pram so to speak and said no more. We would agree on a budget and we each get spending money in personal accounts and when it was gone we could spend no more. Luckily he is as anti debt as me so he would not go overdrawn or use a credit card unless he was repaying it from his personal spends. No personal spending or anything we had not discussed previously to come out of the joint account and I moved savings out at the beginning of the month. He gradually learned to limit his spending but it took a while. We have not fought about money since then though and he says the only reason we were able to retire at 58 was because I made us budget so he finally understands why. Of course we did do holidays and bought cars and spent on the house but we saved up to do it. Maybe try to get into that mentality and perhaps your DH will get on board.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Yellow_mango
    • By Yellow_mango 16th Jun 19, 9:15 PM
    • 254 Posts
    • 393 Thanks
    Yellow_mango
    The main big expenses are the mortgage (£2685pm on a £576k mortgage) and childcare (private school). The rest is death by a million cuts. Endless subscriptions and memberships and school shoes and dog food and car tyres and music lessons and groceries.

    Thanks for listening. I’ll try to get more detailed figures up tomorrow.
    • Yellow_mango
    • By Yellow_mango 17th Jun 19, 7:35 AM
    • 254 Posts
    • 393 Thanks
    Yellow_mango
    SOA / budget
    OK here is my budget/ plan. This is the summary version to start with, otherwise it gets way too long!

    My salary - £3,672.87
    DH salary - £5,030.44
    Total income - £8,703.31 - this is paid into our Barclays joint account.

    From here, £1,650 will go into a Barclays cash ISA to cover school fees (paid termly), annual expenses and gas / electric.

    £4,520 will stay in the Barclays main account to cover regular expenses. I’ll break these down later, there are a lot of them! That includes £500 for debt repayment

    I’m thinking that for a few months I won’t make any transfers to the ISA or to repay debt until the spending cc balance is gone and I’m solidly out of the overdraft. This will mean I won’t have savings to cover school fees in September, so will go back into the overdraft and have to start again at that point.

    Then the remaining £2500 will go into the Starling account. To be allocated as follows:

    Saving for irregular expenses:
    Holidays - £450
    Car / bike - £100
    Gifts - £250
    Clothes - £255
    House / emergency - £250
    Kids activities - £145
    Total - £1,450

    Then £50 into my personal spending account, and £83 for the kids pocket money.

    Leaving £917 for everything else.

    That sounds like a lot. But it’s a lot less than we have been spending month on month. So I’ll have to see how it goes.

    I’m hoping this will give far more visibility to both of us on what we are actually spending and whether we can afford things.
    • enthusiasticsaver
    • By enthusiasticsaver 17th Jun 19, 7:35 AM
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    • 20,253 Thanks
    enthusiasticsaver
    Ok well it sounds like you have lots of scope for cutting back then. Private school fees will be expensive as will a £576k mortgage but as you say you have high income and are tackling this early. Finding £500 a month out of that £8k hopefully should be fairly easy so I would focus on clearing the cards and building up some savings. Do you have car loans too?
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • enthusiasticsaver
    • By enthusiasticsaver 17th Jun 19, 7:41 AM
    • 8,736 Posts
    • 20,253 Thanks
    enthusiasticsaver
    Sorry when I posted I hadn't seen your latest post. You have a huge amount of disposable income but I think the old saying is true that people spend up to their income. You can easily sort this by reducing the clothes, gifts, holidays budget even if only for 6 months. Spending diary may be a good idea to see where your money is being spent.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Yellow_mango
    • By Yellow_mango 17th Jun 19, 7:49 AM
    • 254 Posts
    • 393 Thanks
    Yellow_mango
    As at today, we have £237.13 in the Starling account for the rest of the month. Not sure if it’s possible, but I’ll give it a go. We shouldn’t need petrol, and we’ve got enough food in the cupboard and freezer to get by for at least another week.

    I do need to buy food for both the dog and the cat. The dog is currently eating really expensive biscuits. Might do some research and see if there’s something cheaper I can live with. The cat likes those stupid little pouches. I could probably switch to cans and biscuits and save a bit there.
    • enthusiasticsaver
    • By enthusiasticsaver 17th Jun 19, 8:04 AM
    • 8,736 Posts
    • 20,253 Thanks
    enthusiasticsaver
    Is your overdraft completely free?
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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