Geeking out with YNAB

Jigglebiz · 27 January 2018 at 1:54PM

Hello all

I'm a long time lurker but thought it was time to start my own DFD and get these numbers out of my head. It's exhausting trying to calculate things constantly and helps so much to get it down.

The level of my debt is small compared to many, and for that I'm grateful. At the moment it stands at:

£1000 - family debt, have committed to repaying £167 per month for six months from Feb
£813 - student overdraft - now graduate and still at 0%. Reverts to 18.9% in September 18.
TOTAL = £1813

The problem lies in our ability to pay it back as we have a low income. My income is highly variable and my partner's is fixed but low. We are both working on increasing income but due to study alongside this work we will likely stay on the income for the next 3+ years. I promise I will post a full SOA as soon as I am able to clarify things.

I have been using YNAB this month as it has dawned on me that we should really be having a better hold on the finances. I used it a year or two ago for at least 18 months and made great progress, but dropped off it when I took time out to study (am mid career change hence the low and variable salary right now). I know that I could have used YNAB while a student, but there was guilt at play because I was using savings to pay for my living costs (planned, but most of the money originated from an inheritance from a close relative and that money has now pretty much gone). Hence the guilt.

I'm learning to save and have a £1000 emergency fund so now I'm prioritising reducing the debt. Unfortunately we have already committed to a 2 week but modest holiday in April - if flights and accommodation hadn't already been booked I would be cancelling, but if we do so now we will lose the lot. I need to save [STRIKE]£400[/STRIKE] £300 spending money and £100 towards car rental and petrol.

The family debt is my priority because the person that lent it to me needs it urgently. So I will try and throw any spare cash at this first - my original plan was to pay £167 to the family debt for 6 months and £100ish to the student overdraft every month. However, the advice seems to be that it's more motivating to eliminate one debt at a time.

Unfortunately living costs and the commitment to the holiday in April now mean spare cash is low. I also am forseeing an income shortfall in July-September of around £950 a month due to my job ceasing at that time. I have made enough to get by writing on freelancing sites before so my plan of action is to address those. My income is likely to be higher in March, April, and June so I will be skimming off anything above a certain level to put towards the 'lean' Summer months.

Any other ideas for topping up income over the summer? I would be limited to evenings due to holiday childcare. I can earn £25-40 ph writing as it is a specialist area but perhaps a more regular evening job on top could help things along? I struggle with the idea of £7.50 for bar work etc. simply as it is so much less and involves more expenses (travel, food) than the higher rate I can earn from writing. However, this is very variable and I would like to have a plan in place that means I don't risk increasing the debt.

A big impetus for getting back into reading MSE forums and starting again with YNAB was the feeling that we were risking falling deeper into debt, so we are budgeting carefully at the moment.

So my priorities are in this order:

1. Emergency fund of £1000 to try and limit immediate debt (DONE Jan 18)
2. Repay family debt at £167 per month for 6 months (Started Feb 18)
3. Save £250 per month for holiday in April (£232 saved Feb 18)
4. Pay off student overdraft
5. Contribute to rainy day funds
5. Save up a larger emergency fund to cover 3-6 months expenses

I am looking forward to being paid over the next few days so I can geek out with YNAB! :rotfl:

Drawingaline · 27 January 2018 at 1:59PM

I too am a massive YNAB geek, I adore it. Have subscribed to follow the journey and cheer you on

Jigglebiz · 27 January 2018 at 5:25PM

Thanks drawingaline! Is it geeky to look forward to filling up my YNAB categories?! I have probably over complicated it by having far too many categories covering every conceivable rainy day! But I find it reassuring to have a plan.

Paid off my tax bill today, c. £1300. :eek:

Was planned for but still painful. It’s mainly been accrued against rental income. When the rent gets paid in this month, my aim is to save back all ‘profit’ above our costs to build up a cushion for when we hope to sell it later this year. Since we currently rent our home in a different part of the country, the aim is to sell our rental property to buy a house here. We are fortunate not to have a mortgage on the property we rent out, so hope to find somewhere to buy that means we do not need to take a mortgage out. I don’t think we would qualify for much borrowing anyway due to the low income currently anyway.

In any case, there are various service charges and other costs that would total about £300 a month while it is sitting vacant. Not to mention any redecoration or repairs required. We aim to save up around £5k for this period.

Have been reasonably successful in getting my partner on board but he is not as admin savvy as I am / buries head in the sand / lacks financial education. Slowly but surely he is coming round to my way

Waiting for about £2800 to come in from our salaries and the rental income before I can fill up my categories ! :j

Jigglebiz · 28 January 2018 at 10:09AM

Still waiting on the rent to be paid in. Every month I get to this date and panic that the tenants won’t pay. I hate being so dependent on this income while having commitments to all the services etc plus the rent that we pay ourselves. Looking forward to owning our own place and living in it, with no management companies or estate agents to manage. Fingers crossed that this process will be underway this time next year!

I am concentrating on preparing for important interviews that could drastically increase my income over the medium to long term. So budget obsession will have to hold off for a few days.

Should get paid from our jobs plus the rent on Monday and can see how much is left for payments towards debts.

Cheap weekend so far with £10 spent at car boot sale (mornings entertainment! plus some excellent bargains) and £2.55 on a top up shop. Ordered the food shop from T*sco to arrive on Monday.

Jigglebiz · 28 January 2018 at 8:35PM

This weekend included some good family time that cost us little - pizza, homemade popcorn and a movie on Friday night, and car boot sale on Saturday. Spent today working toward the interviews I have coming up.

Listed several ite,s on eBay to hopefully bring in a few quid this week. However had to pay £12.99 to my mobile provider today as my data had ran out - have been using mobile tethering for my work while working in areas without wifi access. Amazing I've ripped through 5gb in 3 weeks! Have to suck it up and plan better when my data refreshes on e 7th Feb.

Jigglebiz · 29 January 2018 at 5:34PM

Still waiting on the rent to be paid in... getting nervous now as we rely on that to meet our essential running costs ourselves. This was a reasonable solution before when we relocated across the country, but now that we are settled we really cannot go on with the amount of stress this causes.

I've gone through the expenses and seen that we can allocate around £460 this month to either debt/savings/holidays. :j

Since I've got my payslip I know my pay for this month. Very annoyed that I have been taxed as high as I have as I have certainly not even reached my personal allowance this tax year as I was a FT student for much of it. I know this needs a call to HMRC but I can't face it right now.. either way I should be due a rebate if I end up paying too much.

As we have committed to this holiday in April I know that some of the £460 needs to be put aside for that, not ideal as it slows down progress on the debts. I have however repurposed £60 I'd categorised for tax on self employed earnings from January and put this towards the family debt. Due to low earnings this tax year, I am very unlikely to owe anything.

My plan for the debt this month is to put:

£167 towards family loan, leaving a balance of £833
£102 towards student overdraft, leaving a balance of £711

Add £200 to savings for the holiday, and the remaining £50 towards car tax that is due in March. Once the holiday has passed I will be repurposing this saving towards rainy day funds as right now I do not feel secure about income covering costs.

Fortunately with a £1k emergency fund we have some leeway but it feels a bit like a house of cards that could collapse. I have consequently applied for a 0% credit card just as back up but will not be using this for regular spending that I do not pay off each month. The main reason for applying was to be able to hire a car on holiday.:)

Have chased the agent about the rent now being a couple of days late as if that isn't paid ASAP, there'll be nothing going towards debt this month :mad:

Hopefully things will start to look up again at the start of the month.

Drawingaline · 29 January 2018 at 8:54PM

Is the rent paid via standing order? Maybe being due on a Saturday it should come in today and it's just the banks needing to clear it maybe? Either way I hope it comes in soon.

You do sound organised, I know the savings for the holiday are really eating into your budget, but go, enjoy, don't spend too much and then crack on when you get back. W have just booked a weekend away which, although saved for, is a massive amount of money (for us anyway!) But we will enjoy it and see if it prompts is to save to do something similar again.

Jigglebiz · 31 January 2018 at 10:57AM

Thank you drawingaline

you were right about the standing order, it came through on Monday evening. Guess I need to stop panicking and trust the tenants (they really are very nice). Fortuntely my panic every month is received by the managing agents rather than the tenants themselves.

And thank you for saying we should just go and enjoy the holiday - we certainly will! One of the useful aspects of having a diary on MSE is that I can offload my money worries without my family hearing them. Instead, we are talking about how fun the holiday is going to be, what we're going to eat etc. Fortunately it's self-catering but there will be meals out too. I never take enough spending money on holidays and end up counting out individual pennies by the end. Does not make me popular with the family :rotfl:

We've been paid - hurrah! But we have been taxed despite earning under the thresholds :mad: This was due to the tax accrued against the rental income in the previous tax year attempting to be collected via PAYE - but a quick call to HMRC and I've been told this will be refunded to the next pay slip :T
Means we can look forward to £300-ish coming in on February's pay that I can put towards the student overdraft debt. Nothing can go towards that in the meantime, and it's interest free until Sept so that's fine. I just like to have a plan in place!

After all essential expenses have been covered, I've allocated the following to my YNAB categories:

Debt repayments
Family loan: £167 (now at -£833)
TOTAL: £167

I'm glad to be able to send this first debt repayment to my family member

Saving towards sale of property:
Redecoration, Maintenance, Cleaning: £56
Repairs: £55
Service charges: £93
Utilities and Council tax: £80
TOTAL: £284

I'm grateful to be able to start saving towards selling our property. I had planned to also save towards the agent and solicitors fees, but that was a stretch too far this month.
My goal is to save for a period of it being vacant for 6 months while being sold. However, I'm aware that it could take longer than this. The service charge alone is £140 a month :eek:

Rainy Day funds:
Road Tax: £65 (now at £130)
Opticians: £14 (now at £36)
TOTAL: £79

I'd have liked to put more in here towards future car repairs/MOT, but it's not quite possible this month
We've had a massive dent on our car for 4 years that is going to cost £450 to replace, but don't think it's worth it!
Due to a potential change in my work circumstances in September, I am preparing for needing to buy a second car. I don't know how we would afford this.

Holidays:
Car hire and petrol: £55 (now at £95.85)
Spending money: £177
TOTAL: £232

Throwing what I can at this so that I can sort out the car rental once my new credit card arrives and find a good deal on this
I'm aiming for £300 spending money for two weeks. It's an inexpensive area and we're staying SC with lots to do that costs nothing, but family will want pizzas, ice creams and beers all the time!! A daily budget of around £20 should be enough for a meal out every other day and the odd ice cream. More would be better.

---
I've cut down variable spending as low as I think I can - we have literally a couple of quid each per week to have 'fun' with :rotfl: this month we'll be trying to get the grocery bill in under £220, which should be manageable for 2 adults and a small child.

We used to shop at Aldi but due to more hours worked and additional commitments at the moment we've been using online delivery, think I will buy me a delivery saver as the cost for a month at T*sco is less than I've already paid for 2 midweek deliveries. When you cut out the impulse spends from shopping in-person, petrol, and time taken to get to the shop - not to mention the stress of it - grocery delivery doesn't seem so bad.

On top of the above, I have:

been saving up pennies and a couple of foreign coins I've found
lowered the price of my eBay BIN prices in an attempt to shift them ASAP
been walking to or from work every day, only saves £1 each time but it means I get a bit more exercise in and improves my mood

Later this month I'm going to:

Go to the computer place and get them to wipe the data on my old (broken) laptop. They said they'd do this for free.
List said laptop on eBay - should fetch £150ish just for parts.
Stick a couple of other items online
Allocate £60 I've earned through business insurance with Quidco towards the student O/D
NOT book the hotel I was tempted to book the night before my 2nd important interview coming up. I've already booked a 7am train that day and while staying in a hotel might mean I arrive a little fresher, the £60 for the room plus dinner and breakfast feels a bit of a luxury right now TBH.

Not bad considering our incomes were 20% less than anticipated this month due to the tax mess up! Onwards and upwards.

Drawingaline · 2 February 2018 at 8:02PM

Sounds all organised. When it comes to selling the property do you need to get a certain price to cover mortgage etc, or can you price it a bit lower to sell asap?

Out grocery bill has been a bit increased this month. We have changed supermarket, again, (I used to work for one of the big ones and got discount, then my department was sold off and lost it, so I defected in protest lol!) Hubby finally has his discount card through for the one he now works for and we are getting to grips with it all now, but I haven't set up online delivery yet so made the mistake of going shopping with him, easily spent an additional £50 because he was there :eek:. We have £300 set aside for groceries, with an additional £50 for the milkman, we get milk and bread delivered three times a week. Costs more, but we don't tend to run out and then dash to the supermarket and spend £15 on other stuff. Then hubby sometimes picks bits and pieces up but we do tend to come in or just over budget. But I use one of our benefits which is paid four weekly which helps massively, no 5wk months with food in this house :T

Jigglebiz · 2 February 2018 at 9:51PM

We don't have a mortgage on that property, which means that once it's sold the ideal is to buy something where we live now without a mortgage also. We own it outright because of a combination of inheritance (from sudden and traumatic losses of close family members) and aggressively paying down the small mortgage when we earned more and worked full time. The value is around 220-250k - we paid £178k 4 years ago so it has done quite well as an investment.

I have calculated that once fees, stamp duty etc is paid we should just about be able to buy outright in our new area but it would be a smaller property than we currently rent, but still in the same area and perfectly big enough. Actually it's my other half who always wants more of everything - bigger home, more space, more stuff! I aspire to have a neat and tidy home just big enough for us and with not too much to have to clean! I find we struggle to keep up with the home and garden maintenance on a bigger property, not to mention the additional heating bills, council tax etc.

Indeed we might be able to achieve a quicker sale if we are more competitive on price, thanks as I hadn't thought about it like that. Ultimately we are fairly flexible. If pushed,we could probably get a small mortgage to buy a place here but it would only be on one low salary so only £20-30k I would expect. While I would love to be totally mortgage free (with no service charges - wow!) I can see the benefits in stretching to a better property or one that needs some renovation in order to maximise the growth potential for the future. On the other hand, I am on track to retrain in a well paid field that means in 3-4 years we may be able to buy a second property, or have enough income to plough into extensions or renovations etc. Food for thought...

That milkman is pricey, I can see the benefit though. I started buying full fat milk (tip on the Old MSE boards) as it lasts longer and goes further than semi skimmed. I buy 2 large 4 pints and that seems to do us for the week. We use a fair bit on porridge etc.

I'm about to switch to Sainsbury's as my CC has arrived and there's some incentive with nectar points etc. I feel less fearful now I'm using YNAB consistently that I'll just go crazy with the card. I'm amazed they've put a high credit limit on there, which I find a bit terrifying actually. Anyway, I will try and take the bait rather than the hook, as YNAB advice on CCs puts it.

Anyway, progress so far:
- sold 2 items on eBay after dropping the prices, bringing in £9.98 to go towards holiday
- walked to work almost every day

However, after some research I've found we need to put more towards our holiday than expected as airport parking and car hire have shot up massively since I last checked, adding £150 to my estimate !!:eek:

There's also negative news on the work front as my income will drop next week due to its variable nature - totally out of my control and very frustrating. I am only doing this job to get me to the next (and final) stage of my career change, must hold on to the thought that it will be all worth it when I'm earning 5x my current salary !!

with the possibility to raise in seniority up to 10x and in a great profession :j

Jigglebiz · 6 February 2018 at 7:04PM

Quick update:
- sold another item on eBay bringing in £8.99 - allocated to health and beauty category
- needed new headlight bulb but was relieved to have car repairs category fully funded
- electrical issue at our rented property and a leak, got news of this and my first thought was not panic. Unusual for me as that!!!8217;s been the source of a lot of stress over the past year - now that YNAB money management is in place that fear is reduced
- got an enquiry about some freelance work in March that should bring in an extra £200-300
- not been able to fund anything towards to student overdraft this month but will use the above plus PAYE refunds to try and clear it quicker and be done with it

Geeking out with YNAB

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