To ask for your help getting my finances under control

[SpikeyFloof]

I have always lived hand to mouth and often fallen into the trap of having a spend up on payday, then counting pennies to buy milk at the end of the month.

I need a spreadsheet for household finances and a spreadsheet/income expenditure sheet for my business. I jot down my business ingoings and outgoings in a notepad at the moment which is not the best system. I'm self-employed and have an online shop where I sell things I make. I usually get a small top up from UC at the end of the month if my income was low.

I'm on a dmp after my other business had to close during first lockdown. Ex DP is about to press the self destruct button and quit his job so the cm he has been paying is likely to reduce or stop altogether in the next month (right before Christmas ffs). I'm really worried about money so any advice greatly appreciated.

Sounds like you already keep track of what you spend? Are you sort person who has lots of extras every month like lots little top up shops or wasting money all over? Or is your income so low that it’s more about increasing it rather than how you spend what you have?

Are you really getting beat deals on all your bills? Planning meals and shopping cheap as you can?

Is your business actually profitable?

Did you get proper advice on your debts and are you paying them back at a sensible rate while still being able to pay for day to day essentials and not scrimp on food, heating etc?

What do you mean by 'having a spend up on pay day'?

Have you looked at moneysaving expert? You can find everything you need there.

Top up shops are my downfall. I seem to spend 10-15 every 3 days in extras.

Business turnover is great and is now starting to be profitable but its still early days.

I'm working on increasing my income, but as income increases the UC decreases so its a slow process.

Having a spend up on payday means buying things we need such as kids clothes, shoes, uniforms, birthday presents, furniture, car service, etc. Not exactly a spend up but I usually get the big essential purchases out of the way at the start of the month.

Stop buying birthday (and Christmas) presents where you can - if any are for adult friends, suggest you stop exchanging gifts and have drinks/lunch/dinner at home instead. I appreciate it might be more difficult where children are concerned, but where you have to do gifts, see if you can agree a modest maximum spend.

@SpikeyFloof

Having a spend up on payday means buying things we need such as kids clothes, shoes, uniforms, birthday presents, furniture, car service, etc. Not exactly a spend up but I usually get the big essential purchases out of the way at the start of the month.

Well as long as you're not overspending, most of those are essential, except possibly furniture. You need to allow for the cost of these in your budget.

But it sounds like you need to look at what top up shops are costing you, whether you could save money by buying cheaper brands, using cheaper shops or not buying so much.

Also are you buying food that gets wasted? You could be spending far more than you think on food. Can you freeze bread and milk so you don't need so many top up shops and you have it before you've run out of money.

Work out what all your regular bills are in total per month. Add on £15-20 to your gas/electric as that’s how much it could go up. (Exclude food and other things like soap, loo rolls etc that you buy in the supermarket regularly in your weekly shop).

Work out what you need to spend on other stuff over the year (presents clothes etc). Divide by 12 and add the answer to you monthly bills so you have a total of what you need to allow for per month.

Deduct from what your pay/uc/incomings is per month.

The answer is what you have to spend per month on food/soap etc

Open a secondary bank account with your bank. Have all your direct debits come out if your main account. Set up a standing order to pay the ‘answer’ sum above from your main account into your secondary account regularly. Either weekly or monthly. I’d suggest weekly. Work that out by dividing the ‘answer’ by five (as most months are more than 4weeks long).

Use the card from your secondary account only. This will allow you to keep on track while some cash builds up in the main account you arent using. This build up is so you have a stash of money for presents/uniforms etc. You aren’t using the card from that account so you won’t see it and be tempted. You only see a weekly amount in your secondary account and that’s to last you a week so you will ship more responsibly.

Plan meals in advance, ie cook lots of mince, and a normal amount of potatoes on Monday, half the left over mice then gets used for spag bol on Tuesday. Etc.

Or make better use of your freezer by cooking large portions and bagging up when cool and freezing for use another day.

There’s a make a tenner a day thread in here somewhere that may help?

@Elieza That's incredibly helpful, thank you.

@Merryoldgoat

Is your business actually profitable?

This was my thought too OP.

What supermarket do you use? You need to shop for the entire week rather than every few days.

I freeze milk to try and avoid top up shopping.

My business is profitable, although not massively.

I fill in my incoming and outgoings each week on my UC account. The first £293 of my earnings doesn't count. After that UC decreases by 63p for every £1 earned.

Top up shops will do it every time. Meal planning is way to go buy only what you need and will eat before goes bad. Could try posting outgoings and how much you usually spend for people see any obvious things.

Gradually build up a small store cupboard of things like pasta, tins of beans and sardines/tuna, long life milk, so that instead of spending a few pounds doing a top up shop, you can make a meal from your store cupboard.

Monzo

Do you keep your business and personal expenditure separate at the moment ie use different accounts? If not you really should, don’t forget to account for your tax and ni and save for it so you don’t get caught out by that.

I think I was a bit like you until about 2 yrs ago when I decided to really get a handle on my finances - that horrible panic about whether there’s enough.

First thing I did was to spend a month tracking literally everything I spent. This helps inform your budget - for instance I had £200 down on my spreadsheet for food, but when I tracked my spending I found I spent nearer £350! And travel - bus fares, the off taxi to one of DDs clubs on a rainy day, I paid for this from my “spends” budget but after tracking it realised I needed to account for it separately. Let’s not even get started on the amount I was frittering on crap 😉.

Once I knew my actuals I could start making informed decisions as to what my budget should be. So for food I decided £200 wasn’t enough so I went for £250 and kept an eye on it. Travel money I keep in a separate account (I have an expensive commute to London so I need to ringfence that money as it would be a bit of a disaster if I didn’t have it!). Spends I allocated myself a reasonable budget.

My spreadsheet is really simple - it adds up what comes in, what goes out, and I make a new copy for each month so I can play around with the figures (for instance I changed jobs recently so had a tax refund, and I have a couple of one off expenses next month). If your maintenance payments are not reliable I would suggest that you don’t include that as income in your official budget and account for it separately. I did this and it meant I was never caught short unexpectedly.

Freezing bread and milk will really help. We currently have DM living with us and she eats an astounding amount of bread (I suspect she gives the children a lot of extra toast too), I end up spending heaps on top up shops when I only mean to buy bread and milk so now I'm freezing it to break the habit.

1. A budget. Don't just track what you spend, plan it. Use an app like YNAB (it's not free but worth its weight in gold, free trial (no card required), loads of Facebook groups to help you and it's cheaper through the website not app store. Or go old fashioned and put your money into imaginary pots, or real ones and use cash! I think Starling bank allow you to divvy your money up when you get paid so you can see what is in each 'pot' for spending and that's free.
2. Cut expenses where you can. Do you switch everything every year? Car insurance, electricity/gas (probably best to wait on that one right now!), home insurance etc...set a reminder on your phone or put it in your calendar and use comparison sites to find the best deal. And see the aforementioned budget? When you're in a better place you can save 1/12th of all of these costs per month into their respective 'pots' and you'll be able to buy annually, usually saving around 10%
3. Food is a massive cost for most people. Meal plan every week. Go through your cupboards, plan to use up what you have, make sure you end up with an empty fridge at the end of each week (soup is great for any leftover veggies) so you're not throwing away your money. Avoid top up shops. Getting your shopping delivered may help you stick to the list/stay on budget. Also see the moneysavingexpert old style forums for cheap recipe inspiration

If your business isn't that profitable and money is such an issue is it time to retrain for an alternative professional career or take a job as an employee?

Without knowing your bills and stuff it's difficult to advise. Do you feel able to list a months outgoings here? We could flag up areas to look at.
But I'd suggest four things.
First, look at what you call your essential spends at the beginning of the month. Are they all genuinely essential? Can any of them be second hand or free from websites? For the birthday presents, could any of them be dropped with a mutual "no presents" agreement with the recipient? When you're buying new uniform, shoes, are the old ones good enough to sell on even for a few £s?
Second, the £10-15 you're spending every few days, really look at what you are spending that on. Extra milk, bread? Add it to a weekly shop at the beginning of the week. I was also in a habit of popping to the shop a few times a week, a few things I needed and a few things that caught my eye - when I stopped going so often I stopped getting the little extras.
Third, make a food plan either for the week or month. Batch cook so you eat some and freeze some. When you know you have spare meals in the freezer there's less need to buy anything last-minute.
Fourth, go through your entire home clearing out anything you don't use that can be sold on. Even if only a few £s it all adds up.

Quick rundown of monthly expenses are:

Rent 400
Dmp 105
Kids classes 150
Car insurance 40
Gas/electric 70
Water 45
Prime 7.99
Food 300
Petrol 60
Phone/internet 50
Savings 50

Probably some stuff I've missed off there. Income is roughly 1,500 including child benefit. Ex has been paying 200 a month which covered all the kids extra curriculars.

I'm wasting money on top ups, eating out, days out, toys for the kids, bits for the house, etc.

Yes, you've missed off quite a few things like council tax and car maintenance for a start.

Do you actually spend £300 on food or is that what you hope to spend?

Some good advice here

www.moneysavingexpert.com/banking/budget-planning/

Ok, so, suggestions as follows. My questions are not questions to get an answer, it's just questions for you to think about yourself.

Rent: Is this a safe £400? If your landlord is likely to put it up soon then work it into your planning.
DMP: Is this debt mgmt plan? Stick with it... how long have you got left? Are you accruing interest or charges on the debt? If so it might be better to use your savings amount to clear the debt faster.
Kids classes: Are they really into all of the classes? (If yes, keep them) Are there any they are losing interest in that you could drop? Or, do any of the classes offer a subsidy fee for parents with financial struggles?
Car insurance: Have you done an online comparison recently to check if there is a cheaper deal?
Gas/electric: This will rise for everyone. Same question again, have you done an online comparison recently to check whether there is a cheaper deal? Are there ways you could be more frugal - wear jumpers before you put the heating on, are you using all of the hot water you heat, run your washing machine etc at night if your supplier has an off-peak.
Water: Are you on a water meter? Could you be more frugal with water usage? Shorter showers, half a bowl for washing up.
Prime: Would you really miss it if it was gone? Six months without it gets you an extra £50.
Food: Do a food plan for your three meals per day plus any snacks and drinks. Buy exactly what you need each week.
Petrol: Well, we might not have any soon But are you using the car for any journeys that you could actually walk instead?
Phone/internet: As above, do an online comparison to see whether you can switch to a better deal. I've just switched my phone to virgin for £6/mnth and broadband with Sky for £25/mnth.
Savings: It's brilliant that you can save but as above check whether it would be beneficial to use this to clear the debt faster.
Maybe you also have council tax, tv licence? Go through your bank statements for the past few months and list every outgoing, then pick out which are essential and which are nice but not essential.
The top-up shopping, whatever you are topping up on, add it to your weekly shop so you're not needing to go shopping multiple times.
Eating out: Can you cut this back? If it's to meet friends can you meet for coffee instead of food, or get a take away in, or find special offers, or go for a walk for free? Or just be strict and not eat out for a few months?
Toys for the kids: Could this be cut out until Christmas? Maybe arrange a toy swap with their friends so they pass on anything they are bored with and get something different?
Days out: Look for free things, special offers.
Bits for the house: As with toys, can you set yourself a challenge not to buy anything until Christmas?
Your income: As I suggested before, have a big clear out and try to sell on things, a few £s here and there adds up each week. Then your business, you have an online shop? Is this business something where you can get a boost from Christmas/seasonal? Like, suppose you are making mugs, are you now making Halloween mugs, then bonfire night mugs, then winter and Christmas mugs. Are there local websites, facebook pages where you can promote yourself more? Are there local events where you can have a stall and sell a bit extra in person?

You might well have already thought of all of this. I really sympathise with your situation. I was in debt and living hand to mouth for a decade, it's hard work. But small changes over time does benefit, as with being strict with yourself. Good luck 👍🏻

I'm wasting money on top ups, eating out, days out, toys for the kids, bits for the house, etc

If you buy enough food during your weekly shop, none of those things are essential. You could work out a budget including savings for annual and irregular expenses like Christmas, insurance, MOT and repairs etc and put your spare money after all that in a separate account to be used on a 'when it's gone, it's gone basis' with no more until next month.

For days out can you do free things or get an annual pass if there's something local you like to go to a lot and take a picnic to avoid spending £££s at cafes.

Is prime just 7.99 are you just using for Tv or are you spending £100 month on essentials little things because it’s free postage and easy? Easy thing to add up and how much of the “I really need” are essentials rather than nice or can wait few more weeks months.