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help me stop wasting embarrassing amount of money please?

(123 Posts)
Dietcherrycola Fri 09-Oct-15 06:27:43

Hello, long time lurker, relatively new to posting. 

In essence, I am hoping people might help me get a grip on my spending.

First off, I know I am extremely lucky and I am being outrageously wasteful. I am hoping that instead of getting criticised, or being accused of stealth boasting, this thread might be the beginning of me turning things around. 

FWIW, I've always the earned my own money, no help from parents, put self through uni with 2 jobs etc. 

Basically, I have my own business and earn about 40k a year before tax, working from home part time (I know how lucky this is.) 

My husband earns about 60k before tax in a salaried job. He pays the (interest only) mortgage, a couple of long term loans, all bills and food.

I pay the cleaner (I know), the baby sitter, after school clubs etc, Christmas and birthdays, all our clothes and all our holidays, presents, restaurants and bar bills etc. 

Obviously, we should be very comfortable. But in reality, we are over drawn most months and I am £2k short for a tax bill.

The fault lies with me, my husband spends very little on himself (although he has quite a blasé attitude to spending generally). 

I'm not sure what I spend on really, silly things, I just do whatever seems like a good idea at the time... For example, i ran out of perfume yesterday, so bought some, despite not having any money in my acc. Similarly, I've been wanting to listen to the radio upstairs, so I ordered a really nice Roberts vintage style radio, again with overdraft. 

I think the reasons I spend so much are:
We live in central London which is expensive (no aldi, lidel, a coffee is £2.50 etc etc) .
My childhood and 20s were pretty broke. Not awful at all, just no new clothes, no going out, no pocket money etc. 
I get paid sporadically, so I am often in overdraft but owed a few grand. That means I have become comfortable with spending when I'm over drawn. 
I'm in denial about what I spend. 

Just to add, no savings, no credit cards, no pension apart from a second property overseas that's worth about £50k. 

So, clever money saving people, if you have a moment, can you help me turn things around? Where do I start? 

GlitteryShoes Fri 09-Oct-15 06:37:39

I would do Money Saving Rxpert's budget tool to work out how much money I had to spend and draw it out in cash, and keep the cards in a drawer, in an envelope with a note to remind me that I should think twice. With a larger income like yours I would think you can get things under control quite quickly.

Budgeting, can become, in my experience as much of a habit, and as pleasurable as spending. We have quite a large income too, which we were frittering but with a little more care we were able to make big changes and save a lot of money last year.

I would definitely be looking at your mortgage - have you got plans to pay the capital off?

Dietcherrycola Fri 09-Oct-15 06:47:46

Thanks for the reply. You're right, I just need to get my head in the right place and change habits.

I will look at the MSExpert thing, though I'm a bit scared as it sounds like an enormous task.

I like the idea of only using cash, not cards, though I can imagine I might just ask my husband to order stuff online! Seriously though, good tip. I am going away this week so it's all a bit chaotic, but I could start that the week after.

RE Mortgage, yes it worries me too. We have a lot of equity in the house, but we should be over paying the interest only mortgage so it starts getting paid off. We always think we'll start when we have more cash, but because our spending is silly, it never happens.

DoreenLethal Fri 09-Oct-15 06:55:09

My husband earns about 60k before tax in a salaried job. He pays the (interest only) mortgage, a couple of long term loans, all bills and food.

I pay the cleaner (I know), the baby sitter, after school clubs etc, Christmas and birthdays, all our clothes and all our holidays, presents, restaurants and bar bills etc

What you need to do here is to work out what your joint expenses are, mortgage, bills, food, cleaner, babysitter, and budget for presents, clothes, holidays etc etc etc. You can look back over the years to adequately see where your money has been going.

Then, do the Money Saving Expert thing, post a thread and they will tell you where you have been overspending. EG - get an aeropress coffee maker for £25 and it will save you all those £2.50s, change suppliers, go down a level on your shops etc etc.

Once you have decided your money savings, add up the joint spends that you need, open a joint account and split your monthly joint spends 60/40 - he puts the 60% in, and you put the 40% in. The rest is yours to spend or save or pay off your tax bill [which you should be planning for anyway and consider in your total income bill].

Ememem84 Fri 09-Oct-15 06:55:33

Start by pulling out the last years bank statements. And looking at spending. Work out exactly what you've spent and on what.

Then. Once you've had a shock (you will. I did when I did this) and a cry at yourself start doing.

Take perfume back. If unopened. You must have some body lotion you could make do with in the mean time.

Try to make small savings. You mention coffee is £2.50. Stop buying it.

Can you sell overseas house/rent it out?

If you need £2k for tax bill, is there anything you can sell?

Look at food shopping. Cut it down.

Cut down treats - hair dressers, beauticians clothes shopping etc.

Do you have sky tv? Look at your package, call them see if they can offer you a deal. Or if only in one name, cancel it. Then get dh (or you do it in yours if it's already in his) to re register as a new customer.

Check your mobile phone. Can you down tariff?

Check your direct debits. Can you get rid of any?

I was in a similar position except credit card debt was my problem a few years ago. And have crawled back out. And am spending less frivously now and have savings.

Come join us on the credit crunch frugaleers board. No judging. Just advice.

IguanaTail Fri 09-Oct-15 06:55:54

My friend used to take £200 cash from the atm on a Saturday and that was that. And when she went shopping, unlike me picking bits and pieces, she used to plan out each meal as she went round with the trolley.

Dietcherrycola Fri 09-Oct-15 07:10:16

Thank you for brilliant responses - just the sorts of things I was hoping for. Got to do breakfast/school now, will reply after.

ObsidianBlackbirdMcNight Fri 09-Oct-15 07:13:10

Do you have a budget plan? Essential spending and an idea of what of left over?

violetbunny Fri 09-Oct-15 07:13:54

I totally sympathise as I was in a similar position a couple of years ago and have managed to turn it around.

I now track my spending using a budget spreadsheet. This way I know how much I have left over after my essential monthly costs are (petrol, groceries, savings, etc) and how much I have left to play with. Before my monthly paycheck arrives I make a list of what I want to spend my "play" money for the month on, this helps me prioritise what I want to buy as before I was just frittering it away on impulse purchases. It also means I am prioritising essentials costs and contributing to my savings account before anything else. I can still buy a few nice things every month, I just have to think harder about prioritising what I want. I update it every couple of days.

I cancelled my overdraft and have my savings in an account that is hard to access impulsively.

Some people swear by budgeting apps but this approach has worked well for me.

Good luck

TheFurryMenace Fri 09-Oct-15 07:18:53

I used to be in a similar situation to you OP. There used to be a brilliant programme on telly years ago with Alvin Hall, where he'd help people realise the extent of what they were doing and give them a plan going forward. He wrote a brilliant book called your money or your life which me and DH both read. It got us excited about saving and made us plan for the future. Within a few years we had a deposit for our house. We don't have much savings now, but we don't have any debt other than the mortgage. He made me realise what I really needed nod what I wanted were two different things!

Badders123 Fri 09-Oct-15 07:20:06

Perhaps something like the ynab (you need a budget) book/app would be helpful to you?
I'm not sure if there is a cure for frittering money away - I do this too! - but it's helpful to track where your money is being spent and on what and getting you in the habit of saving.

Fluffycloudland77 Fri 09-Oct-15 07:21:20

Come and join our thread, we are non judgy and people do benefit.

Your dh would be less blase about spending if he had a bigger mortgage to pay. It focuses the mind. I didn't think you could even get IO mortgages now.

Flutterbutterfly Fri 09-Oct-15 07:25:20

Alvin halls book is really good. I read it when I was struggling financially years ago.
It did change my attitude to money a lot. ( we paid our mortgage off in 8 years after reading this 250k)

Just stop frivolous spending for a few weeks, note down what you actually spend, it will open your eyes to where the money goes.

Ordering stuff when you haven't got cash is not a good idea. You Woud be better to have a set amount of spends per month. That way you can still treat yourself but do it within your means.

tribpot Fri 09-Oct-15 07:25:51

My guess is that you're not earning enough. I think this will become more obvious when you get a clearer picture of your expenditure. The fact that you're spending the company's money when it belongs to the tax man is evidence of pretty poor finance management (although big businesses may do it too) - how are you drawing money out of the company? If you've been running the business for a while, you should have a surplus which means you can draw down money for several months in between being paid. Have a word with your accountants about the most tax efficient way of taking money out.

As well as looking at your monthly expenses look also at less frequent ones - insurances, car? (I assume you're not running a car when you live in central London), school trips, clothing. This is where you can get caught out, particularly if you're only regulating your spending by your overdraft limit.

Your DH's attitude to money sounds unusual, spends little but it blase about it? Does that mean he spends infrequently, rather than spends little? This will need to be a team effort so worth exploring. The long term loans you mention - is this from people bailing you out for other financial crises?

You really do need to get a grip on both your personal and company spending habits - particularly the latter.

Seriouslyffs Fri 09-Oct-15 07:29:09

It's slid now and I'm not great with money, but we went through a complete 'no spend, saving lots' phase and it really worked. Never buy coffee, clothes or perfume. I bet there is a Lidl near you!
Don't worry too much about the mortgage and overseas property. Interest rates are staying- low fixed again at .5% yesterday. And values still rising. And unless the overseas property is actually costing you money, also worth hanging on to.

WhoisLucasHood Fri 09-Oct-15 07:31:42

Treat your home finances like your business. We're a nation of over spenders, it's not our fault we're conditioned to spend all the time. We are advertised to without even knowing it. When you can see through all that bullshit then spending your money is less important than keeping it. Most of us have our basic needs covered, everything else is neither here or there. I'd suggest a no spend month apart from basics. Make a list of things you think you need throughout the month to get next month and you'll more than likely not need it then either.

Noeuf Fri 09-Oct-15 07:36:16

No real suggestions - we have about 80k coming in and were in the same position. Some of it can't be changed - we are stuck with high council tax, I've been careful with shopping around for utilities etx but then it's about habit. I feel like we can't afford massive things so I end up buying stupid things like a Clinique highlighter for 18 quid.
Our food bill is immense - 831 last month over five weeks (incl detergents) and I'm trying to cut down on top ups for 'fun' food.

Floralnomad Fri 09-Oct-15 07:36:57

Not having a Lidl/ Aldi is irrelevant ,you can still meal plan and shop economically in any supermarket .

christinarossetti Fri 09-Oct-15 07:38:04

I would separate out my business and personal accounts/spending.

I'm self-employed and have two separate lots of finances/bank accounts and draw a salary each month.

Then if I don't have the money for what I want to buy in my current account, I can't afford it, despite having thousands in my business account.

atticusclaw2 Fri 09-Oct-15 08:03:19

Your dh would be less blase about spending if he had a bigger mortgage to pay. It focuses the mind. I didn't think you could even get IO mortgages now.

Hang on - he DOES have a bigger mortgage to pay! He's simply not paying it.

OP I love interest only mortgages. My own mortgage is interest only and If you are disciplined it is the best thing since sliced bread. It gives you ultimate flexibility to cut your payment down to the bare minimum when times are bad and this could mean the difference between being repossessed in six months time or living in your "own" home for the next 20+ years whilst paying a minute amount of money for the privilege.

BUT you are clearly not disciplined (and it doesn't sound like your DH is either). If you are only paying the interest on your mortgage when times are good then when on earth are you going to pay it? When you come to pay it off you are suddenly going to have to magic hundreds of thousands of pounds out of thin air. Or you're going to have to sell the house and hand the proceeds over to the bank to pay off your loan. Because a mortgage is just a loan.

By way of illustration my interest only mortgage is currently £260,000. It was much much larger than this but we pay it down.

The interest element on my mortgage is about £450. I could do as you are and just pay the £450 each month and spend the rest of my money but in six years time when the term expires I would have to magic up £260k and could only do that by selling the house. Instead we treat the mortgage like its a repayment mortgage and pay £4,000 a month. << Did you see that figure?

£4,000 a month to pay down £260,000 in six years (and my interest rate is low!).

Now ok my term is short (deliberately so, it was only ever ten years in the first place) but go onto the MSE website and play with the mortgage payment calculator. Look at what you will need to pay each month to pay off your debt. That will then help you to focus since every month you leave it and carry on just paying the interest that figure is going to get higher and higher and higher. How are you going to pay that off?

The harsh truth is that you don't earn enough to behave in the way that you do. £100k joint income living in central London isn't actually that much (although clearly its better than some/many). You need to change your mindset and stop thinking of yourself as having loads of money and look at the reality of your financial situation. Don't be fooled by the media/MN which will either be shouting at you that you're a rich spoiled princess and don't you know there are people far worse than you or else that you're a pauper not able to keep up with the Joneses and far inferior to them because you don't have the latest vintage style radio. Look at you, your family unit and your income/debt situation. The reality is you don't earn enough and you're in debt. Your ever day spending is being funded by your failure to make your mortgage payments. Now make a real plan to deal with that.

bittapitta Fri 09-Oct-15 08:31:24

Re groceries, there are some fairly centrally located Aldi/Lidl stores. I know there's a Lidl in Camden for example.

But more than that, you might benefit from making a weekly meal plan and using online grocery shopping. You can plan meals based on special offers, you can review your trolley before clicking to order so you can take out unnecessary crap, you can search for better value items from your sofa. That helped us a lot even using a fancy online supermarket (Ocado), we still save money over buying sporadically and not planning.

Dietcherrycola Fri 09-Oct-15 11:14:26

Thank you all, so much!

Atticusclaw you are my new guru. You're completely right and I can't stop thinking about your £4k a month repayments.

Ememem I just took the perfume back, and didn't buy the Clinique concealer that I 'need' on the way out. You have just saved me 70ish quid.

No Sky TV, v expensive phone but locked into contract, I already have a hunch where the big expenditure is: eating out, booze, clothes, hair and beauty products. My spending in all these areas has been creeping up and up.

Also, to those of you concerned about the tax bill, it's not due yet so I'm not panicking. Basically, I always put a fifth of everything I earn in a separate account so I know I'll be able to pay the bill when it comes. Only, I've been dipping into it lately, to the tune of £2k. So I need to put it back.

Furymenace and Flutterby, as soon as I read your post I bought the Alvin Hall on iBooks to read on my journey today, only then did I realise that that counts as unnecessary expenditure!

Violetbunny, thanks for the sympathy, I dream one day of cancelling my OD.

Seriouslyffs, I agree about the overseas property. It only costs about £250 a year and it's doubled in value in the last decade. Also it's cheap family holidays.

Lucyshood I love the idea of spending money being less important than keeping it.

I am letting all your comments drip through and am coming up with a plan, which I will post in a sec:

Dietcherrycola Fri 09-Oct-15 11:24:45

So thanks again for all the input. I'm a bit overwhelmed so I have come up with a plan that lets me focus on one thing at a time:

First week, starting today
Write down everything I spend.
Reduce frittering.
Read the Alvin Hall book.
Join Frugaleers thread.

Then phase 1
MSExpert budget
Only use cash - taking a certain amount out every week
Really reduce personal expenditure
Start using a budgeting ap

Phase 2
Sort out my business accounts. This is when I'll really look at Tripot's advice about drawing down a salary etc.

Phase 3
Sort out the account that covers mortgage, bills and food shopping.
I want to do this one last as it involves my husband and he will have little enthusiasm for it. I'm hoping if I succeed with the other phases he'll be impressed and I'll get him on board. Also, I'd feel a bit of a hypocrite starting on the things that affect him when I've been buying designer jeans and having stupidly expensive haircuts.

Do people think it's a good plan?

Alibabsandthe40Musketeers Fri 09-Oct-15 11:31:44

Reverse your plan, starting with talking to your husband. That is where the real changes will take place, not with not buying coffee for a week.

Dietcherrycola Fri 09-Oct-15 11:38:52

I hear you alibaba, but I am going to do it this way around. I really feel I need to get serious about this myself before involving him. And also, that account is generally balanced. He puts in the right amount to cover the outgoings from there. It's the accounts I am in charge of that are out of control...

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