This is how I’m organising my money - can any experts take a look for me?

[StickyShoess]

I’m quite new in taking control of our finances, we were in a mess we had no idea what we had coming in and going out, direct debits were being missed and charges added on, we were living in our overdraft being charged daily for it and I held my breath at the checkout every single time, it was awful
Then we had an unexpected fourth baby and had to extend our house
So we are in a lot of debt

Finally about a year ago I said this is ridiculous and started trying to sort it out, after a lot of trial and error this is my current system -

DPs wages cover all bills and minimum debt payments - all DDs & SOs go out on the first of every month
Every week we get £118 tax credits, £110 of this gets transferred by SO to a separate bank account and this is our groceries & petrol money for the week
Every 4 weeks we get £247 child benefit, £100 goes by SO to our ‘occasions’ bank account and £100 goes to our ‘spending’ bank account
Then on the day before payday each month I take whatever is leftover in the main bank account and send it to debt and start on payday from scratch

I feel like this is the best system I’ve come up with so far but I just feel like it’s so slow moving and I’m never going to pay off our debt
What do you all think? Anything glaringly obvious that I can change?
TIA

Why can you not go on a dmp with stepchange instead of an iva?

And I doubt anyone with debt that needs an Iva can get 0% credit

Get your debts below £20k and then look at a debt relief order.

I agree with you op...definitely don't get rid of the dog. Someone up thread suggested shopping around for cheaper dog food. Good idea ...but don't buy it in bulk until you've given it a go for a few days to make sure your pet will eat it.

OP does your DH take good to work or does he buy food while he's out? This can add a significant amount to the monthly spend.

@HollowTalk your tip is brilliant!

You have paid to extend a house that you don't even own? That is crazy.

OP - you've done SO well to get this far! I think seeing as you only have a few months of nursery left and it's so beneficial for your son you should keep him in. But presumably come July you can add that £148 per month to your snowballing?

Also the car insurance looks high to me - don't forget to shop around when it's due for renewal.

How long will you be in arrears with gas and electric? Presumably that will drop at some point too - are you doing everything you can to keep the bills low now?

Well done for tackling your debts OP. However, you're approaching snowballing wrong. You should overpay the debt with the highest interest first; not the smallest debt. That way, you reducing your debt faster as you're getting rid of the highest interest.

For example you'd overpay your debts in this order:

Overpay this one until paid off:

1. Credit card X - owe £5000 - interest rate 20%.

Minimum payments on the rest:

1. Credit card Y - owe £2000 - interest rate 18%

1. Loan X - owe £4000 - interest rate 10%

1. Store card X - owe £500 - interest rate 8%

1. Family member loan - £2000 - no interest rate

Thanks, @pinkyyy! The money really does mount up and it's so useful for things like Christmas or holiday spending money. You don't notice it, either.

I saw someone online say that every morning she opens her online bank account and transfers £1 into a saving fund. I thought that was a great idea, too.

Thankyou all for the advice - ivykaty when you put it like that that is a huge difference!

DP is refusing to budge on the virgin because of sports channels, we’ve had quite a row this morning because he seems to be the common denominator in all of our money problems, then he was saying how he’s the only one who actually brings any money in and blablabla, we’re not really speaking atm
I feel quite deflated today, but I’m very grateful for the advice and I will keep on pushing on as much as I can
I’ve just been linked the the earn £10 a day thread so I’m going to have a look at that now, I’ve already sorted a pile of stuff to sell this morning and I’m sat painstakingly listing it all to Shpock now

@HollowTalk I've just opened a savings account so I can start doing it! I don't have any debt, but like you I think it would be great way to save for holidays and Xmas

Try the £1 first thing every morning, too, Pinkyyy. That's your Christmas food and drink sorted!

Hi there @StickyShoess
Have you got all of the cards on standing orders rather than direct debits?
Every spare penny goes off the card with the highest interest rate

and then pop over to one of the big debt threads for more ideas

Rent £435
Nursery £148
Gas & Electricity £245 (huge because we’re in arrears, also means we can’t change company)
Council tax £140
Water £46
Tv licence £12
Car insurance £95
Contents insurance?
Vet £12
Virgin £77
Phone £20
Debt £320

That totals £1550 but what isn’t clear is whether your water is x12 and your council tax x10 payments over the year? So I’ve assumed the council tax &water is paid 12 months of the year

Incoming £1546 monthly
Incoming cb £247 4 weekly (£267 monthly)
Incoming £118 weekly (£511 monthly)

£2324 total income for the month

So £1550 + £390 for food and petrol each month ( that’s £90 per week ) = £1940

This leaves £384 that you should or could be paying off you debt each month along with the £320 you normally pay. A total each month of £704

Now even if you paid £604 off the debt and put £100 away for emergency money that would be better

If you want to do it weekly you would be putting £27 per week from the tax credit (from the £118 weekly) to pay of the debt and the child benefit each 4 weeks (£247)to pay of the debt - what’s left is yours to spend....

But this would pay £4608 extra if your debt as st the moment your only paying £320 a month and that’s £3840

Now I’ve looked at this below for getting sport without the package

www.currys.co.uk/gbuk/tv-and-home-entertainment/digital-and-smart-tv/set-top-boxes/now-tv-sky-sports-pass-1-month-10177136-pdt.html £25 per month for sports channels

So if you cancel virgin at £77 per month and have there £35 internet only and then £25 for sports deal that’s £60 a saving of £17, which might not sound a lot but... it all adds up to £204 per year

Tbh Reduce the hours at nursery, this is an easy saving, give notice of reduction of hours and in 4 weeks you’ll reduce your bill - giving you extra money each month, along with the £17 from ditching virgin

Then ask for a black box in your car, if you drive sedately you’ll reduce your insurance after a year

I use the money advisory service website budget planner as I find it helps

The biggest help to me is having my bank account on an app so I can see the money coming in to the account and immediately make payments weekly to the accounts I need to. If one week there is a birthday - then I can buy one present and deduct exactly £5.99 from the amount.

My biggest piece of advice is 🛑 stop spending, you don’t need it

Think, can I get it cheaper? Can I get it from the charity shop, is it essential?

Wow ivykaty44 thankyou so much for taking the time to do that
This will be the first full month of my new system and the first month the figures have been this low after cancelling some loads of unnecessary direct debits so I’m not 100% but tbh I’m not sure that by my maths we’ll have that much going to debt - there is clearly still a hole in my bucket somewhere...

I’ve decided to change DS down to just term time at nursery, there is only 2 half terms left until he finishes anyway and he’s away with my Mum for part of one of those so it seems crazy to pay each month just for the sake of 4 extra sessions - I’m going to email them first thing Monday morning

Tbh I was so proud of myself for just having all the bills and minimum payments covered and actually knowing what and when is coming in and out because it’s been so so so long since I had a grasp of just the basics that I thought I was in control and doing well
I’d gone back to some of my old ways because I thought I was ‘on it’ - but seeing that you’re all still quite horrified by our situation has given me a bit of a kick up the arse to stop being so comfortable

So changes I’m going to implement or re-implement going forward:

• dropping nursery to term time only
• keep trying to persuade DP about virgin, I’ll show him what you’ve linked above ivy
• go back to Aldi and stop shopping at Morrisons just because it’s a nicer shop, I don’t deserve a nice shopping experience!
• less meat/cheaper meals
• reduce food budget
• heating off, extra layers on (I like the house to be comfortably warm and not just ‘not cold’ but I’m just going to have to get used to it) and get those arrears down
• no takeaways
• make DP take packed lunches to work
• start selling things again

I’d only came on really to ask for opinions on my actual system and not on specific figures but actually you’ve all really opened my eyes so thankyou

Could you do 2 night shifts a week?
A Fri & Sat, I know its easier said than done, but that could give you £800 a month coming in, plus the £700 that Ivy has calculated.

You could be debt free in less than 18 months.

Please stop being so hard on your DP... I'm more than happy that my taxes are being used to pay for his sports channels, and your make up and dog grooming and Halloween expenses and phone contract and wedding and christening gifts for your friends.

Wow jemihap what a horrid person you are!

Can DP watch the children on one or both of his days off while you work a short shift or two somewhere like a grocery store? The extra wage would help pay it down a lot quicker.

Kb8219 - So you're quite happy that whilst feckless, spendthrift, debt addicts with multiple kids get over £700 a month thrown at them to fritter away on luxuries there are other people having to prove they're disabled, such as this..

www.bbc.co.uk/news/uk-england-derbyshire-35610958

jemihap as a stay at home mum with a disabled child who I have to constantly prove is disabled, yes! I understand that sometimes things get out of hand money wise and before you know it you are in a hole! You don’t know this ladies circumstance and why she doesn’t work so don’t be so fecking judgemental! Yes there are things she can cut back on but just because she receives benefits does not mean she has to live a life on the breadline! And before you jump down my throat I worked hard and payed taxes all my but have not gone back to work in order to care for my disabled child!

And I can say this as I also found myself in financial difficulty after giving up work to look after my child and my partner changing job and taking a cut in his income so we can be care for our child and attend hospital appointments.

I think your doing really well to taskle this and I think there are a few things that stand out to me.

1. Do not as someone suggested get rid of your pet that is so so cruel.
2. Can you get a night or evening job, I have 4 kids and work shifts around my dh, it's hard but I get between 700 and 1000 a month without any child care costs. It works so well for us but is tiring.
3. Try and save 5 to 10 per week on your food billand pop in a jar. Simple but works for us and I've saved 100 this year already. This goes to our holiday fund but this could clear one of your debts.

Please ignore the spiteful comment. I think you've done really well considering you have some complicated incomings and outgoings (well more complicated than someone who just gets all their money on 1 day of the month).

Keep chipping away and see how your first couple of months goes. And as someone else said - when snowballing tackle the debt with the highest interest first.

My money saving food tip is choose one night a week (ideally one that's busy anyway) and make a rule that it's always beans on toast or jacket potato night. It's a cheap and easy meal.