I need advice and accountability to change my spending habits

[SeymourBusiness]

Regular poster and name changed.

I have a spending problem.

It’s been going on a few years since I had the kids. I have sought therapy for it and have some understanding of why I am doing it and strategies, I’m better than prior to therapy but not improved enough. What I think would actually be helpful now is accountability, but as I don’t, and won’t, share details of my personal finances with many people I don’t know who could provide this role. I try not to talk about it in depth with DH as it’s not helpful as too close to home, and it makes him stressed which he really doesn’t need right now.

For context, I am a high earner but also have high outgoings. Many of these are non negotiable, however there is a lot of ‘discretionary spending’ that I need to tackle on clothes, interior design, beauty products and treatments, eating out/on the move, things to make life more convenient as I am very time poor.

I have no savings and £9k credit card debt plus £42k car finance. My net monthly income is £6k and I end up with nothing left. I am expecting a bonus of net £14k in April. This is all to do with my personal spending, I already proportion a fixed amount into a joint account each month and all household and joint expenses are fine and covered. DH does the same.

What can I do to get into the nitty gritty of this and get help with accountability with an appropriate person? It’s not IFA territory really, or I don’t think it is…

Bump

First step: get rid of the car and replace with a second hand Honda Accord or similar.

If you are unable/unwilling/incapable of doing that I see little chance of you changing your ways, given that you have already tried therapy.

I did look at this. I would lose money on it currently. It’s also EV and I don’t pay our electricity bills. So all in all I decided that wasn’t going to be massively helpful.

I would lose money on it currently.

A car is a depreciating asset - you are always going to lose money on it.

You need to use your bonus to clear as much debt as you can.

Yes true, this would be quite a bit though, then I’ve still got to have a car and would need to spend more to buy one (we live in a place where this is essential)

I will do some more sums on this, I’m not discounting it as an option at all

Pull your bank statements for the last year. Make a database of your personal and household spending, and highlight any spending that could have been avoided. Move the credit card to an interest free deal, and keep card hopping for interest-free deals until you have settled the debt. Every month, pull out a fixed amount for personal spending and never go back to dip in for more. Do not use your cards for any personal spending as you soon forget what you are clicking away at online, or tap tap tapping on shop terminals. By using cash to pay over the counter; it gives a more visual and meaningful representation of your spending. Otherwise make a note of every card spend after you leave the shop on your phone. Do no eating out for one month, and if you want treats then buy supermarket takeaways in a bag. Consider how much money you have saved. Change your food shop to Aldi or Lidl and you will save a fortune. Look through your existing clothing, tech goods and other products at home, and identify what you never use. Sell on ebay. Look at your utility bills. Shop around for the best energy deal, and add water saving devices available from water companies to your house. Change all household bulbs to led, and look at ways of insulating the building to prevent heat loss. Contact debt charities as they will have other ideas on what you can do to take control of your money.

By your account, there's nothing that you can do.

You need goals.

Spaffing money on handbags, high end cosmetics and. Ultra frivolous holidays is clearly what soothes your soul.

You need to see the end goal. Eg pay off mortgage, and your ability to have a lovely retirement?

Wouldn't it be awful to throw your money away at YSL lipsticks, Gucci handbags and tickets for Glyndebourne only to earn minimal state pension where you choose warmth or soups?

That your husband gets stressed speaks volumes as it may get to the point that he's so exasperated by your frivolous spending that he decides to cut himself loose.

Get the budget planner from moneysavingexpert (or elsewhere) and work out your expenditure and income.

I can clear the credit cards with my bonus. I will then need to stop using them in the same way if I’m going to make any long term changes.

one option would be to get rid of most of them and maybe just keep 1-2, and don’t put them on Apple Pay etc so it’s not easy to use them.

@Butterkist8 I pay into a good company pension with a generous employer contribution so that’s one area I’m not too worried about. But I get your point. All the nice clothes etc won’t mean much in the long run, compared to being able to have a safety net, feel more secure etc. I want to be able to help my currently very little DC with their futures and have the things I never could.

I used to be the exact opposite to this, I came from a pretty poor background and was very careful with money. I was the only person in my uni house with no debts, a job and nailing the personal finance management. I was actually too far the other way most of the time and was way too tight. One extreme to another.

@Riverlee I’ve done that to death. Not made any difference so far in terms of in the moment decision making

How much is your car per month? Will you own it after the finance finishes?

Once you have cleared your credit card you will be in a much better position.

How much equity do you have in your home and pensions?

Work out your net worth and plan from there.

You have to control your non essential spending and start to invest it’s hard and takes discipline.

I am not good at it, I’ve started writing everything down. I am lucky in the fact that I am 50 and have been fortunate with property and public service final salary pensions. Never been a high earner and on 6k take home I’m sure you can get on top of your finances.

Thanks @scoobydoo1971 this is a good list to work through

@loseweightpleasegod the car is £700 pm, at the end of the term I’ll have a top up payment if I want to buy outright. Which I probably won’t - but that might be another thing I need to review. I did buy this at a year old so wasn’t from brand new which is one thing I guess.

@SeymourBusiness, I think two things would help you a lot:

1. Trying to account for all of your necessary spending over a year in an Excel spreadsheet. MSE will be a good start to this - the tricky thing is to make sure that everything is included, e.g. haircuts, MOT, Christmas presents etc. This really makes you think about whether something is necessary, and whether it could be reduced if it is.

1. Giving yourself a defined personal allowance per month. This can be spent on whatever you choose, but once it's gone, it's gone! I allocate myself £75/month on this, but the important thing is that it gives you a limited amount of money to spend on wants rather than needs.

Good luck with this, you sound motivated to pay off debt and build up savings.

So why spend money on high end shite that’ll be chucked in six month’s time ?

why not buy much cheaper products but invest in your child?

you don’t have to buy really cheap and, honestly… there’s precious little difference between Chanel and Dior and Maybelline and Rimmel. Similarly , there’s no difference between Liberty or M&S . I’ve embarrassingly been there.

That you’re prepared to value high end frivolity over your children’s future is actually worrying, given that you are awash with funds.

you need to take a step back and have a rethink but , if I’m really honest, you need to talk to your husband first and foremost. Seriously.

Wow, the car is eye-wateringly expensive, and you'd still have to pay a balloon payment if you actually want to keep it 😯.

I'm afraid I think you should definitely look into getting rid of the car, and getting something significantly cheaper.

Then once you're more established, it can be a lot better value to buy nearly new cars using savings.

Watching with interest.
i also have had an issue with this since having my daughter in 2017.
I was never like this before.
I would make the “pre-child” me’s toes curl with how I am now.
i think it’s boredom. Maybe depression but I function very well.
I’m better… I know I have an issue but I fall
off the wagon too easily.

What does all this spending on lovely things bring you? What is the drive behind it? After you’ve gone on a spending spree how do you feel? I think it would be useful to reflect seriously on what makes you behave this way before trying to embark on changing it

I agree about cash being visual, try for one month as soon as you have been paid drawing out the cash you have available after all your direct debits for the month have been allowed for. Put your cards in a safe place and don't touch them, have only cash on you, once it's gone it's gone, it really makes you notice how fast £20 can be gone.

Regarding the car. Save and pay the balloon payment or buy a cheaper car with the money saved. Either way at the end of the monthly payments you need to own a car outright.

I think you need to look at the car in a different way. Currently you think "if I get rid of it I'll lose money" - whilst all the time chucking more money away, buying stuff with no intrinsic value.

Getting rid of the car would be a watershed. It would be a statement and a commitment to turn over a new leaf and focus on things that really matter.

Like Junior ISAs for your children. Thinking ahead to how you'll fund their university education. Maybe giving to charities that do work that you believe in. Making contingency plans in case shit happens. Investing in experiences instead of handbags.

In short, living a more conscious and more meaningful life. But this would require quite a significant change of mindset.

The car is an absolute money sink though - how much longer are the payments for, and how much will the balloon payment be?

Get counselling. You need to explore your need for endless superficial gratification.

I have seen people write a table with household income and then write down what everything costs
When you have gotten past the ones that can't change - mortgage, phone, heating ect.
They have a second area for the monlthy food budget
Eating out
Entertainment
Savings for X Y Z like Christmas, birthdays or just the Children's savings account.
Then personal allowance haircut, coffee, nails ect and once it's gone it's gone.

Work out what you want to save where. Do you want to give your child help towards a house deposit or university feed X amount of £ over the next 15/20 years will help them a lot.

Over pay the mortgage if your just spending it on unnecessary stuff and you can't bring yourself to have saving looking at you in a bank account.