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…

Some suggestions, maybe one will feel like a comfortable place to start…

Open a new savings account. Set up a standing order for the day you get paid and transfer £60 to savings - that is 1% of your income so seems a completely achievable amount to save.

Or do the above but with a higher amount. Decide how much would be a reasonable percentage to save and gradually increase the standing order til you reach the target amount.

Take your credit cards out of your purse. Remove the saved card details from any websites and remove the details from your phone. Only use your debit card so you are not increasing the debt.

What interest rate are you paying on your credit card debt? Unless they are at 0% paying off should be a priority. Mentally write off that bonus & when you get it pay off the credit cards.

How much do you have left after you have paid the fixed amount to the joint account?

Agree with your husband that you should both increase the amount you pay into the joint account and try to build up some savings. Does he have credit card debt too? Or does he have his own savings?

Start a new note on your phone. Just for one month (or one week if a month seems too difficult), every time you are tempted to buy something non-essential, just write the non-essential thing on the list. At the end of the month (or the week) set aside some time and review the list. Group the items by type, e.g clothing, shoes, make up, homeware, takeaway coffee, taxis, gadgets, books, magazines, etc. Take a few minutes to see if you have changed your mind about any of the items - perhaps a month later that lipstick that is pretty much identical to another 3 you already have in your make up bag might not seem so appealing. If you have multiple items in a category, decide which would be your top choice if you could only buy one. Then after spending time considering each item and whittling down the list if you still really want the top thing in each category and you can afford it without going into debt buy it. Everything else that was not the favourite thing but which you still want can be migrated to next month’s list. Repeat…

As a companion to that, you could transfer the money you would have spent on the non-essentials to your new savings account and if you decide to buy it after all at the end of the month the money has to come out of savings.

Don’t change your spending habits but for one month (or week) keep a detailed spending diary so every time you buy anything at all you have to write it down. At the end of the month (week) categorise and review and decide whether you are happy with where your hard earned money is going.

See if you can change your mindset, so instead of getting short term pleasure from buying something, you transfer that to getting pleasure from seeing the numbers go up in your savings account or the numbers go down on your credit card.

If you have an app for your current account check the balance every evening and if it isn’t a round number transfer an amount to savings so that your account ends in a zero.

One day a week bring a packed lunch or a thermos of coffee to work rather than buying lunch/coffee. If this is ok, increase to twice a week and so on.

If you spend a lot on clothes/shoes etc, start keeping track of what you actually wear each day. After a couple of months or so you might see a pattern e.g. that you are only wearing a small percentage of the clothes you own. Or you might realise that you love buying dresses but in real life you live in jeans and only wear a dress once a month or so. (I have this situation but with lipsticks, I like the idea of wearing red lipstick so I buy lots but never wear it).

Read up about You Need A Budget. After you’ve familiarised yourself with it, take out a trial and use it religiously for the 34 days. If you find it helpful spend the approximately 0.1% of your monthly salary to pay for a subscription.

Don’t despair, you have an enviable income and it sounds as though there are some easy wins available. Small changes really add up.

I’ve taken so long typing that you’ve probably already had all these suggestions from other posters.

@decionsdecisions62, the OP said she'd had counselling - it's just really easy to fall into over-spending in today's society.

I over-spent when I was a bit younger, but now I over-pay my mortgage and have savings etc. So, it's definitely possible to change (I've probably gone a bit to the other extreme now).

Spending £42k on a car is a really poor financial decision OP. On finance even more so. How can you not know that though?

I really recommend following the.brokegeneration on instagram. She focusses on the psychology of spending and it’s eye-opening. Lots of helpful content and she also does podcasts.

£42k...on finance...at what rate...and you won't even own it...and it wasn't new?

Bloody hell.

You mentioned a joint account, can you be transparent with your partner/spouse about your spending and goals for change?

Thanks everyone this is even more helpful than I was hoping.

The car payment (it is a very, very nice car hence stupid price. I’m unfortunately quite into cars but have never used finance before now) seemed very comfortable at the time. I get a car allowance with my job so kind of wrote the monthly £ off. A lump sum I was expecting didn’t happen which hasn’t helped. Then I could have put the car allowance in savings instead. Regardless, all my own fault. I agree with you all, it’s a lot of money. I’m going to look at what I can do to get out of it.

sorry to hear @Minniemouse85 you’ve had the same issue, it’s really not good. I know mine started as a kind of achievable mood booster, when I wasn’t able to do what I had always done to manage my mental health (exercise- lots of it) after birth injuries and in and out of hospital, on top of the usual newborn challenges. The counselling has helped me to learn and understand this. I need to now work on more practical steps.

OP - do get a hit from the actual things you buy, and pleasure from see/using them?
Or is the act of choosing and buying them?

For me, I’ve recognised that it’s the latter, so I can get the same affect from browsing Amazon/wherever and adding things to my endless lists or even to basket. But not actually buying them.
obviously, I’m still tempted, and I still fail and by stuff anyway, but it’s better than it was.

I am trying to train myself to get the same hit from seeing savings rise, but no success there so far…..

@Upwardtrajectory definitely the latter, it’s embarrassing really

@SeymourBusiness I find it embarrassing as well. I can’t admit to anyone.

I get a hit when I buy things too, and sometimes I find myself wanting to buy something (anything!) just to get that hit. I just sort of laugh at myself when it happens now, or sometimes if I really do need something for the house or for my child or whatever I buy that (and amazingly it still works).

I've also had some success with putting things in my Amazon basket, then reviewing it once a week, and only buying what I really need.

@Seeandroidsfighting really appreciate such a thorough and thoughtful reply- thank you 🙏

If I were you I would:
pay off the £9K credit card debt as soon as you get the £14K bonus
use the remaining £5K to open a savings bond for each of your children

it should be easy to pay £700 a month if you earn £6000 a month
how much is left after the 700 and the fixed amount into joint account for household?
Whatever that is divide it into three
set up direct debits so a third goes into the children's bonds, a third goes into your savings account, and you have the other third to spend on yourself

I like to set saving targets so another approach would be say eg I will save £10,000 in 12 months - I would think you could easily reach £12,000 a year?

You can get a great second hand car for £10k. A £42k vehicle is a luxury you can't afford right now. I don't get why you'd spend that on a car in the first place.

I don't get why you'd spend that on a car in the first place.

Most people wouldn't. The OP's problem is that having this car - and, more importantly, being in a position to 'afford' this car!! - gives her way more of a buzz - 'a sense of being worth something' - than having a million in the bank ever would.

So no amount of spreadsheets, MSE money management apps, or any of the obvious, sensible money management tools will help her.

She has had therapy, so she'll probably have a good handle on why she does what she does.

@SeymourBusiness - if you're not ready to make the big commitment and to let go of that car, maybe look at addiction podcasts and support groups. You are like an alcoholic - you may need similar tools and support to succeed.

Analyzing the problem and facing up to it is half the battle.

The car needs to go. It's emblematic of your mindset and all your justifications for keeping it tell a story of how keen you are to hang on to status symbols you can't really afford.

Then pick an amount to pay yourself in pocket money each month and that's the amount you have to fritter. If you have some left at the end of the month you can roll it over (I literally keep my pocket money in a separate bank account). If you've spent it, then you have to wait till the following month for the luxury you convinced yourself you "needed".

(No judgement from me, I've overspent in the last)

Oh and get yourself to learnt to get a buzz from making mortgage overpayments/ paying money into savings instead. I started off with small direct debits and paying "lose change" from accounts into mortgage overpayments/savings, then gradually built up the amount

I agree with @PaminaMozart - you aren’t going to fix this til you understand it. The posts about how to budget are only useful if the person actually wants to budget.

Right now I think the biggest risk is that you will increase the £9k debt between now and April when the £14k is coming. Based on what you said about your car, you already know you make spending decisions based on the position you hope/think you’ll be in tomorrow. That includes pre spending your bonus.

It’s hard. Nicer stuff is actually nicer. And you earn well so it feels like you ‘should’ have the good clothes and the good car. But it is all marketing. You don’t need lots of stuff, just a few (good) things would be fine. You need help to really see that and believe it.

@RhymesWithTangerine yes and Christmas is coming up. Maybe I need to pay off the cards but also start a pot to pay for that so that I don’t end up increasing the card debt

And yes re pre spending. I’ve never thought of that before, it’s a good insight and not a good thing to do, as I have discovered

@PaminaMozart you’re probably spot on there, thanks appreciate the insight

My brand new car is £300 a month , which is expensive and I will be changing for a smaller car when I renew next year. For £700 you could save £400 and still have new and electric.

I view savings as spent money. I just don't know what I've spent it on yet as that's in the future.

But I too need to trim my excess and I'm on a lot less than you.

Track your spending. The good, bad and ugly. Without seeing it in black and white, it's hard to make a plan and budget. You have a healthy income so it is just down to making a budget and sticking to it. Allow yourself an amount to spend as you wish, maybe £300pm, put this into a current account with no overdraft and use to spend on frivolous bits. This means the rest of your income is working hard to bring down your debts and grow savings.