I don’t know when my budgeting got so out of hand. I didn’t want to “miss out” ever really and I ignored the fact that maybe others could afford these things without being in debt whenever I said “yes”. As a result, over the last two years I’ve gone through four balance transfer credit cards. Moving debt from one pot to another. Each month slowly building up my credit card out of overspending and having another £1000 to add to my transfers each year easily.
Now buying things can be nice and living the “high life” but the feeling of knowing you’re always in the minus? Not so good. I’m 27. I feel like I shouldn’t be in this much debt but somehow here I am and the thoughts of it are consuming me. So finally I decided to sit down and work out my monthly spend and budget plan! It’s something I want to get a hold on.
Now I know some minimalists may say student loan debt is bad, but right now for me it’s not. Here in the UK, for the years I studied anyway, student debt gets cleared off after 25 years and comes straight out of my pay. I don’t miss it at all and will unlikely ever pay it off but that’s one debt I’m okay with. My feelings on it might change but right now no….
My budget spreadsheet
So to budget, I created my own spreadsheet. I included:
- My income
- My necessary outgoings (house/ bills, mobile, current debt payments, food)
- My car expenses (car payments – I know!!! But it has 7 months left ?!, petrol)
- My dog (food, insurance, grooming)
The sad thing was what I had left when I subtracted it from my salary.
£190. When I saw that my heart sunk but it also made me realise that this is why I keep going into more and more debt. I’m living on way more than £190 and way out of my means and this is with me NOT saving! It shocked me but it was definitely what I needed!
So I looked at all of my outgoings and considered how realistic or inflated each one was, potentially hoping I could find places to save.
The following areas were ones I thought would be the easiest to change: Food, household bills and potentially dog grooming. I share a house so bills aren’t just my responsibility so it can be difficult when I thought I can get rid of Sky (cable) as it will need to be agreed but food could be re-thought of definitely!
I also wondered whether £25 a week could be enough for socialising? I mean I’d accounted for my basics – shelter, food, petrol for the car – so wasn’t the rest additional rather than necessary? I then thought the extra £90 could be my savings, small but something.
I also get expenses from work and I thought they could go directly into savings to start creating my emergency fund. I definitely need one as I recently had to have repairs done on my car and the £250 knocked my balance even further down!
I forecasted my debt returns and could have them all paid by 2019. At first I thought 2019 is so far ahead but actually I’d feel so happy if I could clear them in 2 years! But it’s going to require commitment and willpower. A change from having whatever I want to considering my situation at every turn.
But here goes!
I will put up my end of month outcome in October!
What are your budget planning tips?