Tips on how to manage on sporadic income?

[spnfan]

Hello all,

I'm sure the ideas I need are somewhere in the bug debt thread but I'm struggling to find the time to read the whole thread!

DH is employed full time, I am employed part time. I have recently returned to work after maternity leave and we didn't budget terribly well before DC was born and made the decision to spend on credit cards so I could stay off work longer to be with DC.

Whilst on mat leave I started a small business which earns me around £4/500 a month.

I have spreadsheets detailing our income and expenditure and in theory we should have around £600 left over as disposable income.

I am very keen to get rid of our credit card debt and want to use this disposable income to do so.

The issue is that I get that £400 extra in payments of around £25 and it's sporadic and it inevitably gets spent because at the moment we seem to be fire fighting and still need to spend on the credit card occasionally.

So DH and I end up very frustrated because on paper we aren't struggling and yet here we are putting petrol on the CC again...

Any advise would be gratefully received.

Do you log every single expenditure? I believe their are apps you can use - they are a bit like MyFitnessPal but for money. It would be a Nuisance to do but might highlight where your money is going.

Yes. If the figures on paper don't reflect the actuality, there's something(s) you or others are not accounting for. You need to record things and get on top of the reality as a first step.

I agree that it's worth finding out exactly where that money is going. You've either underestimated something or missed something altogether.

I'm FT, salaried and DP is SE. We keep 2 accounts. One is for regular income and expenditure. So rent, bills, food come out of the salary account. The other account is for "irregular" spending so it's sporadically topped up and used for holidays, repairs, big purchases. And we know if we can afford it, because there's money in the account and all the regular expenditure is accounted for in the salary account.

Credit cards will confuse this system. So I'd suggest paying off the debt at a regular affordable amount from the salary pot. And then using the sporadic income for things that you only buy sporadically, instead of credit cards.

(If we have anything left in the salary account at next pay day because we spent less on food or whatever, it gets moved into the "irregular" pot)

PS - if it's genuinely perplexing you as to where it's going, it may well be lots of small cash outlays. Do either of you put your hand in your pocket frequently for things like coffees, rolls etc? (Said pockets needing replenishing at a later date by a cash withdrawal, usually.) These small bits can really add up over a month.

Sorry - now complicated, of course, by 'contactless' cards where you can spend a small amount without hardly noticing at the time.

This is an idea I have Being tossing around my head for similar reasons, not sure if helpful.

I have been thinking of trying to arrange all my bills to be taken out/paid on or around the same date each month (preferably 30th of each month) and transferring what is left to a "surplus" account that can be used for savings/emergencies and a cash withdrawal for things that I will need to purchase like food shopping, school dinners etc. Petrol, electric for the month etc all purchased on the same date all the bills come out so that I know what's left after that date is spare. And then don't touch the account again until the same date in the next month so all the sporadic income just builds up to cover the bills.

DH and I have always had freelance jobs, fairly stable income ATM but has gone up and down a lot in some years, something we learned was that paying off debt at the expense of savings wasn't always a good idea, we used up our savings pot to pay of the mortgage early but this meant that we didn't have an emergency fund for unexpected expenses left. Not having any debt also ruined our credit rating! Obviously it is slightly different if the interest rate is high but in any case make sure you build up a decent emergency fund for unexpected tax bills and the like.

There is another thread in Money Matters on apps to help budget.

Contactless payments take a while to show up on statements etc. Caught me out before. Have you considered trying to make some extra cash to get rid of the credit card debts?

Can you survive on DH income and use your money to pay of credit cards and then put your earnings into a savings account/treat fund?