Taking control of your finances

Money, money, money

If you're anything like me you won't be the best with money. I've tried time and time again to 'be good' when it comes to controlling my spending and to try and get something into savings. Having started a job in the debt advice sector it's made me really analyse our spending habits as a family and basically has been a huge wake up call about how bad we are with money. Not only did we have no savings we'd also been overspending each month and piling it on credit cards. So after a mooch around the net and stumbling across Mr Money Mustache (seriously love this guy!) I'd found my latest obsession - sorting out our money situation.

So we've gone all guns blazing on trying to pay off this debt we've got hanging around like a bad smell. Looking at our spending habits over a couple of months was a SHOCKER! I recommend you all go do this (but be prepared to be horrified!). We certainly were when we realised aside from our mortgage our biggest outgoing was on food and eating out, spending a few hundred pounds each month on restaurants and coffee. Ouch. The easiest way I found to do this was to split our spending into main headings such as food, transport, eating out, clothes.... and working through our bank statements total up the spending for each category.

Time for a kick up the bum

The first logical step was to start out by doing a budget that included all the essentials that we have to pay for:

Essentials:
Mortgage
Building & contents insurance
Landline & internet
Food
Mobile phones
Pet insurance
TV licence
Council tax
Car insurance
Fuel
Car Insurance
Mr H's car HP - this ones a bummer, it's not something I wanted him to get in the first place but he's tied into it now so we just got to suck it up and pay it
Little H's sports clubs - most of these double us a childcare now that I'm working

Then we added in a couple of things that although we're essential, we really didn;t want to get rid of completely:

Non essential:
£50 a month allowance for social/entertainment costs
Little H's pocket money - he has to do jobs for this and only gets it on the agreement he puts half into his savings account
Clothing - we haven't set an amount for this but realistically things need replacing now and again like little H needing new school shoes this month. All non essential clothing costs have gone though, we're making do with what we have.

Next up I opened us a joint bank account that we have all our bills going out of and then use a 0% cashback credit card to do all the food shopping which we then pay off in full on payday.
So on pay day I transfer most of our wages from our accounts into the joint account. The only money we leave in our single accounts is fuel money Mr H, and a little in my account to cover pocket money and sports clubs. Anything left over after this goes on paying the debts off and some goes into our savings account for things we know we have coming up like birthdays, Christmas, & school trips.

Our first steps to being debt free

It's been a couple of months and so far things are going great. We've paid off nearly £3,000 in debt and saved just over £1,000 (this may seem strange but we're off to New York next month as we'd already booked and paid for it before deciding to go on a spending freeze).

At this rate we're hoping to be debt free in the next 6-8 months and then we can really ramp up the saving. I'll keep you posted.

Are you good with money or do you find it hard to control your spending?

Claire x