saving my future self from debt

pennyforthepot · 18 April 2018 at 7:03AM

Due to an unexpected rather large shortfall in income over the last 12 months I am short in my rental pot for the next 12 months by £16,000. :eek:

The objective of my thread is to motivate myself to claw back the money over an 18 month period to prevent myself from getting into debt. It won't be easy as my earnings are limited and my budgets have been shaved down already. But with a little savvy know how and a lot of determination (and lentils

) I hope to get a good way towards my target.

I aim to use this diary to motivate myself by recording my little daily achievements (and probably failures too) as well as reading as many diaries as I can which help with motivation and picking up tips.

Penny for the Pot pftp

pennyforthepot · 18 April 2018 at 2:45PM

My back story is extremely complex so I shall probably drip feed it over several weeks.

My outgoings reflect the following living arrangements:

I live in a 2 bedroom flat with my DD 17 and DS 19 (when not at uni which appears to be most of the time despite extortionate fees).

My Outgoings and Penny Pots (where I allocate a set amount but don't necessarily spend it all - though rare!) on a monthly basis up until now are as follows:

£1895 Rent
£180 Council tax (10 months)
£85 Electricity (no gas)
£24 Water
£38 Line rental and internet
£105 mobiles x 3 (mid contracts awaiting sim only for myself)
£200 Kids allowance
£300 Food rarely eat out (dd Gluten Free vegan = expensive)
£100 petrol
£150 kids costs (haircuts,school books, trips clothes)
£150 me (all my costs from entertainment to prescriptions)
£50 miscellaneous (those unexpected monthly purchases).
£85 annual costs (car, tv license, software renewals etc)
£250 celebrations (bday, xmas, easter, etc + all wrapping cards etc)
£87 interest free loan - last payment due next month I think.

£3699 TOTAL (i think!)

Annual costs and celebrations get allocated into a 'separate' pot in my financial spreadsheet - though in reality stay in the S123 account in the aim of getting as much interest paid for the £20k ceiling.

DDs & So's for rent, utilities, phones, allowances etc go out on a monthly basis.

Pots for petrol, kids costs, food, miscellaneous and me comes out at the beginning of the month in cash. Totalling £750.00. Although I have set budgets for each I allow some flow between the pots as sometimes I may need to spend more than is budgeted on one particular category. Any excess is rolled over into my savings but may need to come back out if I exceed the budget in that 12 month period.
Although I take the money out in cash I don't actually spend the cash unless I need to. I purchase what I can on my JL CC (vouchers are great for buying xmas pressies) then transfer the cash into a new pot which I pay back into the bank at the end of the month to cover the cost of the credit card. That way I don't lose track of my £750 budget (when the cash is gone its gone) but I gain the JL vouchers (£135 end of last year) for my Xmas spend - complicated I know but it works for me!

So to summarise my total monthly outgoings are just shy of £3700 per month. My objective is to shave around £300 off these costs per month to put towards my £16,000 rent shortfall. Mainly from my £750 cash pot but also electricity, kids allowance (sorry kids) and the celebrations pot (again sorry kids).

As I'm aiming for a monthly savings target of £1000 I have another £700 to find which will need to come from income. As my income is complex I will save that for another post.

Hope that makes sense!

Today's gain:
£4.01 S123 acc1 dd
£5.24 S123 acc 1monthly interest after £5 fee

Daily Spending allowance from Cash budget:
£22.91

(calculated by amount of cash left in cash pot of £750 by number of days left in the month).

PFTP x

beanielou · 18 April 2018 at 5:35PM

Your rent is huge.
Is that just for one property?
Celebrations are huge too.
Allowances could surely cover some of the kids costs?

pennyforthepot · 19 April 2018 at 6:36AM

Hi Beanielou, thanks for stopping by.

Yes the rental prices in my area are extortionate, as are house prices in general. To add to that on a room by room basis it's a lot more expensive to rent a flat than it is a house too, but renting a 2 bed flat is the cheapest option overall. On the downside it does mean that I have to de-camp to the lounge when DS comes back from uni, but that's not such a hardship. I only have 17 months left to live here, once my daughter goes to uni I shall be moving out, it is only the schooling that keeps me in this area.

My celebration figure is a large part of the budget, something that I do struggle with. I do have 2 step sons as well as my own two plus a large family and it does include any celebratory meals out for birthdays, anything to do with celebrations - even the 2 ft Christmas tree. I do tend to buy the kids a lot of their basics to put in their Crimbo pressies dressing gowns pjs, vitamins, deodorant etc but yes I do aim to cut down a little. Given that we haven't been able to go on holiday or go on any trips out as my daughter has been very ill for 4 years (she much better now) so I suppose I compensate a little on their bdays and xmas and give them some extra in cash (which I do immediately take off them and put in a savings account for them). The same goes with their allowance. Yes £100 may seem a little high (although with a 17 & 19 year old it can go pretty quickly) but a percentage goes straight into a savings account for them so they don't actually get to spend it. They also have to buy any clothes and shoes outside the basics as well as their own gifts for people. I am about to cut DS's down to £50 now he's at uni and that will go into his savings account which I hold. Despite all those excuses Beanielou you are right I am going to cut my celebrations pot down to £200 which is where it was last year, I upped it because I went over budget, I shall just have to stay in budget this year.

PFTP X

beanielou · 19 April 2018 at 8:24AM

Can neither of your offspring work even part time?

Mumoffourkids · 19 April 2018 at 10:17AM

I was going to say the same thing Beanie. I have a 15 year old daughter (nearly 16) and she actually has two part time jobs. One is working at the holiday club my younger kids go to and one is as a waitress/kitchen assistant. Both of these mean that I only pay for her phone bill at £20 a month and she pays for everything else.

My next daughter will do the same as soon as she is old enough as I think it not only teaches them that they have to work to earn money but also about the cost of things and if they want something big they have to save up for it.

I also have six kids and still don't spend as much as you do on birthdays and Christmas. I put aside £150 per month and that covers everything!

In addition £150 per month for kids costs on top of allowances is also quite high.

That's just my thoughts as I know how expensive kids can be.

pennyforthepot · 19 April 2018 at 3:48PM

My daughter has been seriously ill for the last 4 years, too ill to attend school for 1 year, and back only part time last year for her GCSEs. She tutors once a week durning term time, and works ad hoc waitressing for events. My son also works ad-hoc and is looking for a job when he returns home for the summer. They buy all their own things other than the basics and have saved up for laptops, games consoles, iPads etc. To be clear everything related to the kids comes out of kids costs, from school trips, prescriptions (for 19year old) haircuts, new mattress I just had to buy, uniform, driving lessons (partially funded by the them) all the household bits I had to buy for uni, texts books, school uniform etc - £150 a month is fairly realistic for me - it is a budget not a cost. It is what it is.

PTFP

pennyforthepot · 19 April 2018 at 4:17PM

Income:

Approximate figures:

£1400 salary
£2250 investment return averaged over a 12 month period for 7 years
£85 (ish) child benefit
£30 bank account interest

£3765 TOTAL (average)

My finances are a bit complicated but here goes. My investment fund was set up as part of my divorce settlement. As I could not afford to buy a property, the profit from the sale of the family home was put into a fund with the aim that the return on investment would enable me to pay for monthly rent (I have to state that it was my XH who decided this and set it up). Over the past 7 years the investment has returned enough for me to pay the rent, with some ups and downs but has overall maintained its initial capital input. That is until recently. It has lost significant value over the last few months which is why I need to claw back as much as I can outside of the investment so I don't have to eat into my capital which in turn would reduce my return and mean i have to take more and more capital out in order to cover my monthly rent.

Investing is fine if you don't need to take the money out as its a long game but with such a significant drop just before I was due to take the next 6 to 8 months of rent out I am a bit screwed. I have worked out that if I add up my fixed income and the money that I have allocated to my pots, plus 'borrowing' from the savings accounts that I set up for the kids (!) as well as reducing my outgoing a as much as I can and possibly adding some more hours to work that I should have enough to keep me going for the next 5 to 6 months which I'm hoping will be enough time to see my fund improve a little.

beanielou · 19 April 2018 at 4:31PM

Not an ideal situation to be in.

pennyforthepot · 19 April 2018 at 5:38PM

Indeed Beanielou - but I love a challenge

Outgoings Today's:

£6.78 - food shop

£87.24 - mobile dd £23 overspend. DD went to Texas with her dad and I think something went awry with the wifi for a couple of days. This is compensated by the $s I gave her for Easter which she didn't spend and has given me back, so no need to find any money for the overspend.

£2.47 electricity usage. I like to track every expenditure when I'm set a challenge like this! I thought it would be nearer the £1.80 mark given how warm it was outside, though I did do quite a lot of cooking. I will see what tomorrow's reading is like.

Incomings:

£36 - worked a few extra hours today

Several passes round the free olives at Tescos, with a bonus of cheese and biscuits, today. I can often be seen hovering there!

Worked today so got free coffee and snuck in several free biscuits too!

£25.91 daily available spend remaining

Sat in the sun for a while so didn't need to take my vitamin D

PFTP x

pennyforthepot · 20 April 2018 at 6:37AM

I have a busy day today, firstly driving into the nearest large town to see if I can find some musical equipment that my DS needs for uni. I then need to circumnavigate London to drop it off to him along with all the stuff he wasn't able to take back with him after the Easter holidays. I normally do a bit of batch cooking for him to stick in his freezer but I just haven't had time recently, I haven't even done a quick shop for him which I normally do if I go and see him, I'll have to drop by Tescos and do a quick grab. Living in London as a student is just sooo expensive. Once I've done that I'm off to Brighton, which is around 85 miles from where I currently live to visit DH. Yes, I have a DH and I own a home (all be it a small one). It's a very long, complicated and sad story as to why we don't live together but that will change once DD goes to uni.

I spend ever other weekend in Brighton, we live right to the sea and I love it love it love it. My husband is seriously ill and moving to Brighton has helped him immensely. (We've had a lot of illness in the family over the last 4 years).The sea is so therapeutic and there is always something going on in Brighton and and there is so much diversity there - anything goes.

Onto spends for the weekend:

£20 - food pot for DD. She normally goes to her dads or BFs when I'm not at home but her dad is still in Texas so she may stay at home with her bf. I have some stuff in the fridge for her and some batch cooked meals in the freezer but I have nothing meat based for her BF I've left her some cash just in case, she's unlikely to spend it all but may dip into it.

£50 - PFTP's pot . This will come out of my budget. £10 will have to go towards parking, it's a nightmare to park in Brighton. The rest I am going to suggest to DH that we put into a kitty and he puts £40 in too. He is TERRIBLE with money, just the worst. He's so bad that I point blank refused to set up a joint account with him. He doesn't earn a great deal of money, he's an artists/illustrator/author/political satirist/what ever happens to take his fancy on the day! Most of his money goes on cigarettes, coffee and random eBay purchases of small inane useless stuff that normally break or are the wrong thing. Saying that I do love him

. I've not tried the kitty thing before but I'm hoping that it will give us more of a sense of sharing the cost of the weekend and give us enough to do something nice as I don't normally go out when I'm not in Brighton. Anything that is left in the kitty, if there is anything can go towards going away for a weekend break later in the year hopefully.

£30 petrol. I have £23 left in my petrol pot for the month and around 2/3 of a tank left. It would normally cost me £20 to get to Brighton and back but as I'm doing quite a lot of extra mileage I've upped it and I don't have many miles to do for the rest of the month so hoping that will cover it.

I'm hoping that's it on the spend front for the weekend. I may add £5 as DD needs to put in some practice for her driving as she's very anxious about her lessons so I'll probably take her out when I get back on Sunday afternoon for an hou and the insurance is £4.50. I did this for the first time earlier this week - I spent the whole time with my hand gripping the hand brake and grabbing the steering wheel to keep her from hitting the curb! I'm aiming to get a 3 month insurance at the beginning of May, I haven't got the budget for it in April. Must remember to buy some new learner plates, last one fell off at the high speed she was doing - 15 mph!

£1.26 electricity cost for the day yesterday. That's about as low as it goes during the summer.

Enjoy the weekend
PFTP

saving my future self from debt

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