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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to be shocked at how few people know how to budget?

163 replies

Coldtits · 02/02/2009 21:39

I see it all the time, both online and in real life - people who don't use their common sense to save their pounds. Or who have so little faith in their own judgement and abilities that they live entirely on prepackaged, pre weighed, precooked food.

I watched one of my friends buy some ready chopped chicken breast and a jar or tomato pasta sauce. Now, I KNOW she's on a budget, and I mentioned that it would be just as nice to get some thighs aand chop them, and use a tin of tomatoes and some garlic and salt and pepper, and would probably cost much less than the nearly £6 she was intending to spend.

"Oh no," she said. "You know I can't cook."

This was not a time saving exercise. We've known each other since childhood (before I get accused of not knowing the situation) and she was cooking dinner for herself and her boyfriend - day off, no kids.

I know she's not thick! I don't get it.

OP posts:
blueshoes · 05/02/2009 22:10

sorrento, how is being in debt better than having savings (low as the interest rate may be)?

sorrento · 05/02/2009 22:12

Because both will be inflated away, the difference being that one of us got 2 holidays a year and one of us didn't, I suspect I was the fool

Springflower · 05/02/2009 22:30

Have just come to this topic - I am someone who's not in debt but I do wonder what you do with a spreadsheet? I instinctively thought oh I'll have one of those but is it not just more work keeping track of everything? Surely if you see you have money left at the end of the month that would be enough or am I missing something and I need to be getting one too?!!

blueshoes · 05/02/2009 22:39

But sorrento, at least you get to keep the roof over your head.

My SIL and her husband are up to their eyeballs in debt and their finances somehow defy gravity - but I suspect that it will only take one bank/creditor to call for the house of cards to come crashing down. I cannot live like that, however many holidays I have or not (and they just went for a MrandMrsSmith luxury one).

There is the parable about the grasshopper who fiddled in the summer ...

TheYearOfTheCat · 05/02/2009 22:41

Tryharder - I know someone like this - says they are broke, but has 2 cruises a year, 'needed' a new car - so bought a top of the range Landrover, child (and Mum) dressed in designer gear, as well as the precut fruit & veg & cartons of formula! Up to them how they want to spend their money, but I am always a bit when I hear the cries of poverty.

(and I like to spend, but I don't claim I'm broke)

sorrento · 05/02/2009 22:43

Blueshoes, you know what they will keep the roof over their heads too.
You and I will pay for it for them.

sorrento · 05/02/2009 22:45

TYOTC - we have one of those at school, takes the piss out of other children's clothes, falls out with people when she doesn't pay her catalogue bills, all fur coat and no knickers.
Just gone bankrupt, husband bought her interest in the house for (drum roll) a pound.

blueshoes · 05/02/2009 22:48

Sorrento, I was thinking about their lovely house (which they kept taking the equity out of during the good times) being repossessed. I don't think social housing is exactly on their radar.

BarkingHarriet · 05/02/2009 22:48

I am a budgeter.

But what really annoys me is when people assume that we've got plenty of money, just because we're careful with it and watch what we spend. When parents/PIL are bailing sister/SIL out yet again because "she's got no money" yet I know that they take home more than us, they just don't take care. Grr.

sorrento · 05/02/2009 22:52

Blueshoes, it's not a cash point they should have thought of that before they blew it all, they should loose it. However I bet they get to keep the house, they'll be off to debtdirect soon, offered an IVA, pay back 10% of the debt and the rest is magically wiped off.

TheYearOfTheCat · 05/02/2009 22:57

BarkingHarriet - I am having to bite my fingers from posting - I know this situation well.

Helen31 · 05/02/2009 23:01

Sorrento - err, surely only if they can afford to service their debts in the meantime?

Bullerbychildren · 05/02/2009 23:09

Solanum asked "Please, someone out there must also be a bit annoyed at the way so many people seem to want to "brag" about how "thrifty" they are and how small their family meals are".

They're irritating me too! I think I will scream if I hear the phrase "cook from scratch" one more time!

sorrento · 05/02/2009 23:12

Helen, no that's the point of an IVA you stop servicing the debts they work out what you can afford to pay and then it gets written off after a set period of time, brilliant eh ?
Expect then everyone else gets to pay for the debts too.

Ivykaty44 · 05/02/2009 23:15

So budgeting is all to do with how you make your spag bog. The average british citizen eats spag bog 3x p[er week so I guess the two things are very closely linked???

Please may I have the budgeting spag sheet please from someone

whitehorses 1970 at yahoo.co.uk

ta very much

daysoftheweek · 05/02/2009 23:16

lol sorrento at Henry Ford and I agree we've been saving too and looks like it's all for nothing I would never have dreamt GB would do all this.
Blue we have no roof over our head, that's what we're saving for

sarah293 · 06/02/2009 07:49

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Nighbynight · 06/02/2009 08:06

solamum, each to their own, but you don't actually need more meat than 250 g for a family meal, and it's no more than habit or greed to believe that you do. Vegetarians survive somehow!
Our family meals are not braggingly small - we just use meat to flavour things, rather than packing as much of it on our plates as possible. Different way of thinking, that's all.

sarah293 · 06/02/2009 08:08

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Nighbynight · 06/02/2009 08:09

oh for goodness sake, the comment about adding up and subtracting was in response to someone who said she had no idea how to budget....it was a jokey way of saying it's not that hard.

Nighbynight · 06/02/2009 08:10

well given the cheap, poor quality meat which most of us buy, probably not.

Many of our meals are vegetarian too, but I dont think they are always cheaper. Eg if I buy out of season vegetables, or expensive squashes, or something like that.

cheapest meal we've had recently was probably potato and cauliflower soup with bread.

DanJARMouse · 06/02/2009 08:45

I also use spreadsheets! Seperate one for each month.
Income in one column with dates and amounts, and Outgoings in another with dates and amounts.

We then break down how much that leaves us with per week for food and day to day living, including petrol and treats.

We take that out in cash and when its gone its gone.

Cheaper cuts of meat, cooked slowly (slow cooker) bulked out with lentils/peppers/mushrooms etc.

500g of mince is split in 2 and frozen. Feeds 2 adults and 3 children.

blueshoes · 06/02/2009 09:13

sorrento, apologies for my ignorance. But is bankruptcy a condition for going down the IVA route? I would assume there is no benefit for a bank to agree to an IVA unless the borrower is invoking bankruptcy protection.

Knowing that banks are not charitable organisations, I would have thought the usual route is:

  • borrower cannot service mortgage (interest) payments
  • bank calls on the mortgage so it all falls due
  • borrower of course continues to default
  • bank gets judgment against borrower
  • bank enforces its security over the house ie sells it.
  • proceeds of sale not enough to pay off the outstanding mortgage because of falling property prices
  • bank goes against borrower's other assets for the unsatisfied debt
  • borrower declares bankruptcy
  • IVA - bank agrees to write off part of this remaining debt as part of the IVA.

You can see in this scenario, borrower does not keep the house. I cannot imagine the bank would give up its security over the house ie surrender it back to the borrower to live in it just because the borrower gets an IVA. First thing all banks do is repossess to realise their security. A mortgage stands up in a bankruptcy. I would assume it stands up in an IVA.

sorrento · 06/02/2009 09:21

Obviously no guarantees here and my information comes mostly from those who've experienced it on Money Saving expert but jist appears to be.

Rack up massive debts.

No more equity in the house - so now that's no longer an asset.

Apply for an IVA which takes into account all outgaoings including £50 per week for children's activities, £40 a week for smoking and drink (you get the picture, it's hardly poverty).

Agree a repayment figure with the bank, for example £10 to the credit card, £15 to loan.

This can go on for a maximum of 5 years and then the outstanding balance is wiped off.

So yes the bank could push for bankruptcy but if there's no equity in the house and if they do that then the bank looses because all the debts are wiped off instantly.
No more nasty phone calls or bailiffs and one easy manageable payment.
The thing is none of it is real money so the banks don't care, if they run out they'll just ask the government for more, the printing presses will be turned on soon and inflation will rocket, so what seems like huge debts now will be laughable in 2 years time, but then so will our savings

sorrento · 06/02/2009 09:23

So sorry have just reread, your concerned they can't pay the mortgage, I'm sorry I thought it was the other debts they were struggling with.

Well, yes in a word if they can't pay the mortgage they've got about a year before they'll be moving out.
If they have any equity at all they should be trying to sell now.