To ask how to be better with money

[EmilyJack92]

I grew up with a mother who was terrible at handling money, we never had enough for the food shop and often had bailiffs turning up at the door. As a result, I was shit at money management myself. I am now 28 and a single parent of 2 DC under 5 and have vowed to sort myself out financially. I don't want my kids to end up being the same. I am in about £4k of debt and so far have phoned up every company and set up repayment plans. I have written everything down so I can keep track of it and I will be completely debt free by June 2024, this is the earliest I can possibly be debt free as I am on a low income and can't afford higher repayments to the debts. My goal is to be debt free and also to improve my bad credit, I have set all my bills up on direct debit and they are now up to date and paid on time every month, along with the debt repayments. Will this naturally improve my credit over time? I have also joined the electoral roll. I've also worked out all my incoming and outgoings and have started meal planning and only doing the food shop with a shopping list. Does anyone have any more tips on what I can do to become better with money? I'm really determined to turn this around for the sake of my children and our future.

Well done you, you sound very much in control of everything

It sounds like you’re on the right track and are taking positive steps.

Tracking your outgoings and incomings and sticking to a budget really is one of the best things you can be doing. Many people bury their head in the sand when it comes to money and don’t really have a grasp of where their money goes. Really you should know exactly what you’re spending on what, with no surprises.

Sticking to food shopping lists and meal planning is great too.

Martin Lewis/Money Saving Expert have got some good tips. I am signed up to the newsletter which is great for good deals.

I also recommend following thepennypal on Instagram if you have it, they post budgeting/savings advice in very manageable easy to digest ways. Myfrugalyear is quite good too, following a woman’s journey to clear her debts with tips and advice.

Keep at it, and best of luck!

Make Moneysavingexpert your friend. Start with a Money makeover.

www.moneysavingexpert.com/family/money-help/

Try to increase your income, reduce all your regular outgoings as much as possible, also the interest on your debts. 4 years is a very long time to take to pay off £4k, which suggests that your budget is very tight. Are you paying a lot for childcare? Will this improve when DC go to school?

If you can trim your expenses a little and increase your income (look at MSE for tricks like getting cashback, bonuses for switching your bank account, which might not be possible if you have bad credit, but you can try) you could cut that down massively. You might also see if solutions such as a Debt Relief Order might be appropriate if you aren't really getting anywhere with your debts.

Think about everything you buy and how you can get it cheaper. How much does your mobile phone cost for example? There's a thread running at the moment where someone's paying £70 a month for a new iphone which is totally ridiculous unless you are very well off as you can get a decent phone and service for about a quarter that amount leaving a lot left over for other things.

It's lots of things like this that make the difference about how far your money goes. Some people just pay a lot more for more or less the same things, so make sure you're not one of those people .

Also get the weekly email for ongoing tips.

One of the things which helps me is to budget for the next 12 months - this means instead of paying for birthday presents all at once, I have an account which I’ve saved money into each month throughout the year.

I used to just look a month at a time which is helpful to start with to gain control, but meant I felt like I was being hit with big expenses all at once.

Well done OP, sounds like you have made a good start and got a clear plan!

My only advice would be to see if there is a way to lessen the amount interest you will pay back on your existing debts, as then you will be able to pay off the actual debt a bit quicker. Not sure how you do this, but this charity gives free advice about handling debt, either over the phone or on their webchat:
www.nationaldebtline.org/

I’m from Australia but there is a big following down here of the book called

The Barefoot Investor

It’s a way of managing money has literally changed the lives of thousands of Australians. The guy who wrote it has been acknowledged in the latest honours list as he’s had such a positive affect on so many. It’s a complete mindset change - really simple but incredibly effective. For the first time EVER we have savings, not reliant on credit cards and slowly but surely paying off debt. There is a few very active Facebook support groups as well who follow the BFI way and they are a great source of info. But you should read the book first (you might not be able to get it there but could read an e book)

Sorry I probably sound evangelical but it truely is life changing. I wish I’d done it years ago and I’ve set my kids on the right track now as late teens.

Sounds like you are doing very well. I would suggest looking at ways you can increase your income now (the £10 a day thread is good) and improve your long term prospects. Also make sure you take advantage of Freecycle (great for Christmas gifts for kids) and food waste reduction sites.

Your doing very well so far OP, well done for tackling it!

I can recommend setting up a spreadsheet on excel to budget monthly income and expenditure. You can use it to project ahead for the whole year to include once a year expenses (ie Xmas, birthdays) so you have everything possible covered.

Meal plan but also batch cook. It's usually cheaper to make a bigger batch of something (say lasagne) than to make two different meals because you only need to buy a little bit more of the ingredients, instead of a whole new set of ingredients that are completely different. So make say 4 big dinners a week (but enough for two dinners), freeze half or put in fridge for another night that week. Also saves you having to cook every night.

Pack everything to take with you (lunches, snacks, coffees), so you don't need to buy anything when you're out or work lunches, etc. In normal times, I have a long commute, which means I'm out of the house several days a week 6am-7/8pm. I pack breakfast, lunch and dinner, plus snacks, and take my morning coffee in a flask (I have a massive cool bag). It easily saves me 40-50 quid a week not having to buy a coffee or a meal deal or a soup or whatever out every day.

I would also start to think long-term about your job prospects. You say you are on a low income now. Is there something you could start planning for that in a few years time would mean you could be earning more? Do you have a skill that you could use to be self-employed? Is there a step in progression in your current job you could aim for? Or a career change? Saving money is one thing, but what's made the biggest difference in our financial security has been increasing what we earn. For me, it involved finishing a degree and getting a better paid job, for dh, he started a business. We both make significantly more than we did 7 years ago, working the same hours, but for better pay.

In order to get our finances straight we now have lots of saving accounts. So I have a present fund, car fund, kids activities etc we only put a small amount in each month but it really helps so we don’t have a massive bill around the birthdays or if the car needs something. I’d really recommend this it’s really helped us sort out our money. We also have another debit account for food and petrol so that we can see how much we’re spending on this as it was getting out of control.

You're doing great op.

The only suggestion I will make is to go SIM free for your mobile phone. My husband and I now buy a mid-range phone each from music magpie every 2 years or so , meaning our bills are only £12 each pm for the actual contract.

I'd recommend YNAB (You Need a Budget). I've been using the app/website for the past 5 years and it's really revolutionised the way I think about money. I've gone from having debt and being so bad with money, to having savings, no debt and feeling confident when unexpected events crop up.

Honestly, it's the best thing I've ever done. Have a look - there's so many YouTube tutorials and Facebook videos to help you. It's a brilliant concept and I love it.

Sim only

You are doing really well. Couple of things I have done are:
I use a spreadsheet to track my spending by category - this means I know realistically what I spend on Christmas et and can work out an average amount per month to set aside
Separate pots of money for Christmas, hols and car expenses so that the money is available when the bills come
Every payrise I get however small I save half and keep half - this started very small with just £2.00 being saved but has increased over the years and I now have a nice buffer in savings

A book by Amy Daycezion - well a series of books by her (check spelling) - really helpful. Some is applicable to the USA only, but a lot is universal.

It sounds like you're making a great start! Have you heard of the meaningful money podcast? It's free and has some great advice/ guides to all things finance.

Thank you so much everyone, some amazing advice! I'm feeling really confident about sorting this situation out. My phone contract actually ended this month (£25 a month) and I'm just going to keep my phone instead of upgrading and use pay as you go as suggested. I like the idea of batch cooking too, I have a slow cooker so could do this with things like casserole, pasta sauces, curries, etc. Also, I haven't heard of a debt relief order but after Googling it I do meet the criteria for applying. Would this be a better option than paying my debts back as I currently am? It says it will stay on my file for 6 years, but I have a CCJ from last year so that will be on my file for another 5 years either way. What would you all suggest? At the moment I am on a very low income on Universal Credit, but that will change as I am starting university to train to become a social worker. My little dream is to finish my degree, start my career, be debt free and eventually get myself a mortgage. Thanks again for the replies