Why do i never have any money...???

[Remmy123]

Hi all,

This is my first post but I have been a long time lurker, husband and I have been wracking our brains to work out exactly why we struggle so much financially.

This is not something we can talk to openly to our friends as finances are obviously personal, and I have gained alot of advice from this site so far...

Background:

Husband income after tax PCM: 3,400.00-3,600.00
My income after tax PCM: 900-1000

Outgoings:

Mortgage, council tax and utilities: 1,800 (on a very high interest rate due to end in September so will lower dramatically we hope)
Car loan: 130.00
Credit card: 100.00
Next directory: 50.00
Food: approx 600.00
Nursery fees: 300.00

We are overdrawn at the end of the month by £2,800 – is this where we are going wrong????

We go out once a month if that, hardly ever buy clothes, we get the end of the month and we literally have no money and have to borrow at least 200 from my mum and pay back we cannot afford a holiday this year, we really are very tight and get bargains on everything, i never buy new make-up, etc.. its depressing

We are so frustrated as we both work very very hard and when we work it out it seems we should be comfortable not skint

We must have totally over-stretched ourselves with our mortgage but ironically we have had the same mortgage since 2007 and managed when I was on mat leave and husband income was at l east 400 less PCM.

I could bang my head against the wall!

Thanks to those who can help or see where we are going wrong...

Remmy123

Your listed expenditure is only £2980 which should leave you around £1500 'spare'. Less as it's going to cost you quite a lot to maintain a £2800 overdraft. That's more than some families live in in total so you have to find out where it's all going. Means you and DH keeping a very accurate spending diary recording all cash withdrawals and all other transactions, no matter how small. Do that for a couple of months and it should be obvious.

Is credit card really only £100? Do you pay off the full balance each month or is that just the minimum payment?

Thanks for your reply,

min payment is only 30.00 and i pay 100.00 as want to get rid of the credit card whishc is 3,600 at the moment on a 0% credit card

Cogito - i worked out also that is what i should have spare - to make things more frustrating is that my husbands lunch and travel etc is all; claimed through expenses so we do not even have to pay for that.

I look at my account everyday and we hardly spend a penny - im wondering whether to speak to our bank to see if they would be any good at actually helping us....?

my husband said last night its as if someone is taking money out of our account (which they are not as we look)

writing a diary sounds like a very good plan - we get paid at the end of the month so will start then - good idea thank you

How much does the overdraft cost?

Have you forgotten your costs for petrol etc? Insurance ?

If you're £2800 overdrawn to begin with and £4500-ish comes in you briefly have £1700 in credit. Then your DDs (mortgage, utilities, CC bill, nursery car loan, Next) remove £2380 so you start the month roughly £700 overdrawn. Is that about right? Then there will the O/D fees to come off that.

In addition you have a car loan and £3600 on a credit card and presumably a balance on the catalogue as well (?)

Rather than talking to your bank who will probably try to steer you into a consolidation loan would you consider consulting one of the free debt advisory services such as CAB or National Debtline? There will be a way to manage all of these debts and get your spending under control and the debt charities won't try to push any products on you.

You need to write it all down. Everything.

Someone is taking money out of your bank account - you are. The key is to find out what you're doing with it.

You need to each get a notebook or use your phone and document every single cash spend for a month, down to a penny. Do you have online banking? If so then it's easy to track the spending made on cards.

Then at the end of the month reconcile your account with your written notes. You should be able to account for every penny of cash withdrawn from ATMs or spent with a debit card. Then see where it's all going.

We didn't have as much disposable income as you, but ours was all going on coffees, snacks, after work drinks, treats with the food shop, bottles of wine, little things for the children, random small Amazon and eBay purchases. Fritter, fritter, fritter. Before it was all written down I would have told you I was pretty frugal. I wasn't, and dh was a disaster.

In fact, something you can do right now is add up all the ATM transactions for the last month. How much has gone out of your accounts in cash? Some people find it easier to keep track of cash in their pocket. Others (like dh) just spend whatever's there and then take out some more.

Depending on what sort of person you are you might be better with a cash budget, say £50 discretionary spends for the week in cash and when it's gone it's gone, or put everything you can on a debit card so it's there in black and white where it's been spent. Dh now does the former, I find I spend less with the latter.

Thanks for your reply

We have £33 per month fees on the overdraft limit.

Actually The Next directory balance is only £100 and I’ve just paid that off now so I can take that off.

I am not sure what a Debt agency can do that i am not doing already such as, hardly ever going out etc etc.....

I am hoping now Christmas is out of the way things will improve but we have been stuck in this overdraft for sometime and i really need to get rid of it.

I could manage it better if i could put my overdraft onto a credit card but i don’t think you can.

Thanks for your help

Sleepy head – thank you very much – I have online banking and log on every day, i do pay everything with card so maybe as you say i am better off with cash – i had thought about this.

I think i will sit down and add up every penny and see if that give sme more clarity

Its frustrating as my poor husband is working his socks off.....

Thanks all

...husband does not spend a penny - lunch is paid for (expensed back to company as is petrol, car tax etc) he goes out once a month and spends £60 (if that)

the only thing i have bought this month is a toddler toilet seat from amazon!

going to start writing it all down as of 1st Feb then see if it corresponds with my online bank statement.

my resolution is to crack this...

You need to go on Martin Lewis moneysaving expert and do one of his spreadsheets.

Believe me there is nowhere to hide - you'll see where it gets frittered away v quickly.

What are your utility bills like? Sky/phones/memberships etc.

Your mortgage is a bit steep but your income is high so it should be affordable.

There is an online budget planner on money saving expert ify you scroll down on this link. www.moneysavingexpert.com/banking/Budget-planning#otherversions

Start out by putting in what you actually spend (not what you hope you spend or think you spend) based on receipts, bank statements etc - so that you don't forget anything.
Then go through your bank statements and try to work out where the money has gone for the last 3 months. If it's cash, add up the cash. How much of it can you account for? etc.

Depending on what you find, it might be easier to either:

• Put absolutely everything possible on debit cards, so that you can see easily from bank statements where it went; or
• Get out most discretionary spend as cash, so that when it's gone; it's gone.

Cross posted with another Moneysavingexpert fan :)

How do his expenses work? Is it a company cc and completely separate from your finances, or does he pay himself, present receipts and claim back through payroll?

I suspect it'll be the former on his salary. Dh is the latter and it's a pita and has left us short in the past.

completely agree about writing it all down in a little book or on your phone. I was amazed how much money i spent without realising it eg haircuts for you & kids, soft play, gym or swimming, birthday presents & cards, lunch at work, coffee, after school clubs/kids activities, public transport etc. Also it's worth double checking whether you do actually spend what you think on food. I used to budget for £600 a month - we are family of 5 - when i actually tracked every supermarket/corner shop/ocado expense over a 3 month period, it was nearer £900 each month. That explained why we were overspending so much. Good luck!

Make a list of all your spending for this month that isn't a household expenditure. So, a list of all cash withdrawals and debit card transactions. You'll be shocked at the amount of "wastage". It's too easy to whip out the debit card for a few coffees etc, it's shocking how it soon adds up.

You can transfer money from a virgin credit card to a current account to pay off an overdraft. Sometimes they have 0% offers. You need to check their fees but I have done this twice now and it does help - BUT you need to cut up the card when you receive it and not spend anymore on it and literally just pay it off otherwise obviously you are just adding to your debt.

Definitely write everything down. In and out and look and what is left over. Also £600 for food seems really high. Shop at a discount shop like aldi or lidl and look at batch cooking so you can make meals in advance in large quantities - this often saves money.

Wow thanks all – i knew i would get some great advice from here.

the 1,800 is mortgage plus council tax, water bills electric and insurance included within – mortgage is actually 1,500.

And my husband has a company credit card so it doesn’t get confused with our current account.

I have just realised that 80.00 comes out of our current account for Sky as do our mobile phones.... will definitely do all what you suggested – such helpful comments!

you have £140 a week on food? that's quite high, i spend £50 a week for me two teenagers and two cats. you need to do a meal plan and see if you can save money on your supermarket shop i think.

Fairylea i will look in to that - i havent used a c card for years i am very disiplined - i feel i would manage finances alot better if overdraft was on the c card.

i am (beliove it or not) known within my friends to be very good with money it just seems to have gone so pear shaped i cannot get my head above water ,i know we are more forunate than many so need to get this under control

thank you

600 high on food

try stopping using your debit cards for a while. I've been doing this and it is working.

Have all the regular bills on Standing Order and work out how much you need/want to spend per month/week and take it out in cash. When it's gone it's gone.

It is an exercise in focusing your spending. I can burn through £100 a week on nothing easily. Now I really watch how it is spent. If I want a latte or magazine I leave it until the end of the week to see if there is enough £ leftover.

Also I was wasting lots of food. So I've stopped doing large supermarket shops. I am cooking my way through what I have in the freezer and cupboard and just buying what I need daily in my lunch hour. I keep a list on my phone so I don;t forget. I go to M&S for milk, butter, coffee (same price as Tesco), I buy fruit and vege as I go from local street stall etc. Once a month I will go to a Lidl (tesco at a push) for a bigger shop - loo roll, tins, etc.

I am again connecting more with my shopping and spending less.

Have you overlooked some of your basic bills in your utilities? What about house, car and life insurance? TV licence, phone bills, internet, sky TV etc, make sure you have checked and costed everything.

What's your food budget a week? Do you have a set amount and do you stick to it? Do you tend to do a big shop weekly or 2-3 shops? (I found doing that I was spending £50 a week more than I thought)

Is your DH certain he's claiming back all his expenses? And you aren't double counting, as in, you aren't counting that expense reimbursement in his wage as income (as it gets paid with it) but are ignoring the cost of those... It might help if your DH has a separate credit card which is only for expenses, so you can see thta you are definately claiming everything each month.

What do you buget for weekly "fun money" spending each and do you stick to it? Look at how frequently you take cash out, do you have a set amount for that you take each week?

Teenage tantrums - there is no way i could get it down to 50.00 - can that really be done??

I have to children 2 and 5 - i would love to reduce it. the figure i put is maximum but never any less than £400.