Disposable income and being terrible with money

[dotdotdot12]

I'd really like your opinions

Each month after all bills are paid including food/petrol/parking costs I have £850 left over.

I always feel like I have no money?! I'm always struggling to the next payday. I'm terrible with money and just spend on my debit card the week I get paid and somehow manage to leave myself short.

I spend on meals out/clothes/make up, things for the kids, drinks out etc.

I never save anything this has to stop as I need to save for a mortgage deposit as currently renting. Also I would like have some emergency savings.

I do have a few debts but I could get rid of my two credit cards quite quickly as balances aren't too high.

So my question is do I have a good amount of disposable income? I used to think I didn't as I'm a spender and never have spare cash but reading some threads on here recently has made me think actually I do have a good disposable income compared to some people and I am just being really irresponsible with it

Any tips on how I can cut my impulsive spending and save more?

That seems massive after essential bills.

For one month could you
a) hide you card, and take out cash
b) write down everything you spend
c) consider no meals out / takeaway coffees / new clothes /makeup

You should get rid of your debts. Don't use a credit card unless you can afford to pay off in full at the end of the month.

Also can you set up a standing order for e.g. £200 per month (or more) to go into savings before you have a chance to fritter it?

You need to be honest about what you’re spending it on. Go back a month in your statements and write down everything you’ve spent outside bills/groceries etc. I think you’ll be shocked!

£850 actually spare a month is huge. We have around a quarter of that for a family of 4. You could easily save half of that a month and still live well. It will take some adjustments though.

And yes, pay off the debt

When you say after bills you have £850 pm, have you accounted for annual costs like Christmas, holidays, car repairs, insurances etc?

Some of these things are essentials and need to be accounted for before you think about general spending on non essentials.

Also, is some of the money you spend on the DCs fairly essential? School trips etc? Need to budget for those too.

I would separate your bills account from your spends account - spending from the bills account makes me twitchy - what if you keep spendning and then a DD bounces? Bank charges galore!

When you get paid, you need to put money into a savings account for the annual expenses and then you can pay them as they arise. Add a bit extra for things like broken washing machines.

Also see if you can get a 0% credit card (look on moneysavingexpert) so all the money you pay on your credit cards reduces the debts, not goes on interest. Aim to pay off the credit card within the interest free period. When you have paid your credit card, think about increasing the amount you save until you have a healthy emergency fund so you won't get into debt.

Work out how much you need for bills each month and leave that amount of money in your current account (plus a bit extra for anything you might have forgotten). Don't touch your current account for the rest of the month, except:

For the amount that is truely disposable, (probably less than £850 pm because you are saving and paying off your credit card) transfer to another account to spend on an 'when it's gone, it's gone' basis.

We actually put all our food, petrol and general spending on a credit card that is paid off in full every month and is just treated like another bill.

But maybe you need to write down what you are spending so you can see what you are spending money on. Or some people recommend apps and stuff to do it automagically (Monzo I think).

I would set up an amount into a savings account then at least if you spend the rest you have saved a bit. Why dont u also draw out a certain amount a week say £150 then when its gone - that has got to be for everything - meals out, day trips, drinks, everything !

The debt free in 2018 thread below is a good one for advice and tips.
It has spread sheets etc to set up for yourself to see what's going on in your accounts.
Prioritise any cc payments as a monthly bill setting up a standing order above the minimum repayment. That will take months off the time left.
Go through your statements and see what you've bought it's a eye opener
Draw out cash for a time and when it's gone it's gone.
Coffees and food out cancelled for a month too.

I love all these ideas thanks so much!

I am definitely going to transfer my spare cash for the month into a separate account as having bills and spare cash in the one account is a recipe for disaster as I just spend on my card like a millionaire

I am going to transfer into a savings account that I won't have any access to for a fixed period so maybe I'll look into those accounts.

The worst bit about this is that my dp also has the same amount of disposable income left each month so actually between us that's £1700 and neither of us have any savings .

I haven't included kids clothes/haircuts/Christmas etc in that amount although I do get a regular bonus at Christmas of around £600 so I use that for Xmas.

That’s a lot for both of you, maybe go look at some houses to give you motivation to save. We did that and ended up saving our deposit in 6 months. Whilst saving it we couldn’t believe what we were able to save and used to spend on rubbish like buying lunch every day instead of bringing it into work. Even with a higher mortgage than we paid in rent we don’t have as much left as you but I put £250 a month away (most months). Saving can become just as addictive as spending once you start! Good luck x

With that amount of disposable income you could definitely aim to save for a house deposit and you certainly should be able to get rid of your credit cards debt

I’d say - first set yourself a fairly ambitious target for paying off your debts. That will get you into the discipline. I’d set up some standing orders for an achievable extra amount and then try and overpay even more as well (eg if you are tempted by an impulse buy, consider putting that amount into paying off debt/ saving for a house - which do you want more??). I also do “loose change” transfers - so I check my account every couple of days and transfer the “loose change” (eg £1.88 of a £531.88 balance) into savings.

Once you’ve practised the discipline by paying off your credit cards, hopefully you can transfer that into building up savings.

Top tips that helped me save for a house deposit (despite v average income and a child)

• just stop buying any clothes for yourself (unless it is to replace an essential item that’s broken).
• skip meals out / takeaways - or maybe agree on one night a month when you have one
• go through your savings and work out what you “fritter” on and go cold turkey -( for me it was magazines and books)- I replaced magazines with the internet!
• give the children a fixed amount of pocket money and be robust in saying no to buying other stuff
• get selling: look around your house for stuff you don’t need, and try selling it on local selling sites / eBay... put all the money into a savings account... as your savings grow and the goal feels more achievable you will feel more motivated.

jeez. You are totally screwed with one job loss, and that can happen to anyone.

mindset: shopping is a chore, not fun. The advertisers want you to be a fool and buy loads of crap. Don't be a fool!

stop all adult presents. No-one needs anything. It is only May so a great time to declare a tat ceasefire. Then you can have a fun December rather than spending it in stinking hot crowded shops.

stop all purchases of makeup, clothes, magazines, books (use a library). Buy when you have none left of the item concerned. learn to walk without coffee, as has been possible for millenia. It is summer, outdoors is free.