Learning to Live on Less!

A question about : Learning to Live on Less!

I've been lurking on this website for about four years but rarely post and am still a bit dubious about starting a diary but I hope it will help me focus on clearing debt and managing our money a bit better.

DH and I are struggling a bit at the moment - he earns a decent wage but we have very little free spending money, mainly because we're paying almost $800 (can't get the pound sign to work?) a month repaying debt. All the bills get paid, there is money for food and petrol (just!) but that then only leaves about $100 a month for everything else.

It's entirely our own fault - for the last 10 years we've made the most of loans and credit cards, paying minimums and remortgaging to consolidate only to start spending all over again. We were young, stupid and lucky enough to buy a house at the start of the housing boom, which made a lot of money very quickly. We've moved twice since then but our last move was in August 2007 - we paid too much and now we're pretty much stuck with a large, expensive, inefficient house in an area we don't really like any more (we're trying to sell but that's a whole other story). I really wish someone would have said NO to us, or told us that we couldn't afford to buy everything we wanted but realistically we wouldn't have listened. So now we're in the position where all we can do is tighten our belts, grit our teeth and wait until it's all paid back.

DH works full time and I'm currently a SAHM looking after our year old twins. We live in the middle of nowhere and only have one car and no family near by, so the cost of transport to work and childcare for the twins would mean that for me to go back to work is unrealistic at the moment (and I don't really want to TBH - DH and I agreed a long time ago that I could stay at home to raise our children and we should be able to afford it if it wasn't for these darn debts!). I sell lots on ebay, do surveys, quidco etc. to make a bit of money but sometimes it feels like we're getting nowhere.

I'll put an SOA up in a little while and if anyone can give me some pointers that would be useful - I've checked it quite thoroughly but fresh eyes are always good. This has been quite a long first post but it feels good to stop bottling everything up!

Iris

Best answers:

• No. adults...........2
  No. children.........2
  No. cars..............1
  Salary.................0
  Partners salary.....2350
  Benefits..............130 approx. (currently only child benefit, waiting for renewal pack to re-claim child tax credits which were stopped as they think we earn too much)
  Total income........2480 approx.
  Outgoings
  Mortgage............582.71
  Council tax..........131
  TV licence...........12.37
  Water.................23 (metered)
  Sewerage............18.89
  Electricity............20
  Oil......................50
  Phone.................16
  Broadband............16 (have tried to get this cheaper but very few companies will supply to us - variety of excuses, usually we're too remote, too far from the exchange etc.)
  Life insurance.......22.44 (for both of us - cheapest we could find as I had medical problems several years ago)
  Home insurance.....23.06 (buildings and contents - cheapest I could find this year as we had a claim last year)
  Pet insurance........30.74 (for 2 large dogs - I look around every year and claim through Quidco, this is the cheapest I can get at the moment)
  Sky......................22.50
  NASUWT...............13.95 (husbands union fees - essential in his line of work)
  Mobiles..................20 (one contract and one PAYG)
  Emergency savings...25
  Dog savings............50 (covers vaccinations, food etc.)
  Car savings.............75 (covers insurance, MOT, servicing, TAX and general repairs)
  Childrens savings........20
  Grocery shopping.......150
  Petrol.......................200 (we live in the middle of no-where down very winding fuel inefficient lanes - husband drives 20 miles a day to work and back and at the weekend we drive to visit family and friends etc. have the odd day out or go to town for shopping)
  Total outgoings.......1514.66
  Debts
  Credit card.....150 (0% until Dec 2011) Balance - 4400
  Loan 1..........483.17 (11.9% until Oct 2013) Balance at last statement (Jan 2011)- 12928.70 (no over-payments allowed)
  Loan 2..........200 (7.79% until July 2027!!!!!) Balance at last statement (Mar 2011) - 19019.48 (over-payments allowed)(this was a loan that was linked to our mortgage but unsecured, so we got it at mortgage rates back in 2002 - "yay we can borrow 10k and it'll only cost us 200 a month" never crossed our minds that we'd be paying it for 25 years!)
  Total debt................36348.18
  Total monthly debt repayments.........788.17
  Total outgoings (bills + debt).........2302.83
  Money remaining.............................177.17
  Ok, so that's a little bit more than I thought but still not a lot for the four of us. Anything I haven't listed (haircuts, clothes, presents etc.) comes out of that 177. We don't go on holiday. Any ideas where we could save? We don't need to cut it to the bone but any easy saving ideas would be appreciated.
  NOTE: this has been revised in Post #140
• I think that part of the reason I often feel a bit overwhelmed is that I'm trying to do too much with not very much money. I can't pay back masses from the credit card and build a decent emergency fund and overpay our long loan, so I need to focus.
  The loans we have will just have to remain as they are at the moment. The big one finishes in just over 2 years, so if we can get by until then without getting extra debts we'll be a lot better off. The other, longer loan is more affordable and once everything else is clear we can think about over-paying that.
  Target 1
  We're currently trying to sell our house and move somewhere less rural (which will hopefully bring down our living costs) so I'm going to try to save for our solicitors fees rather than take it out of what little equity we'll have from the sale. The estimate we've been given is about $1200. Optimistically we might need this by August. Realistically I think I'll probably have longer to save up.
  Target 2
  The credit card debt is something I can tackle but I'm not going to be able to clear it all by the time the 0% period runs out so I'd like to get it down to 3K or less. We're already paying $150 a month towards it, so I only need to find another $350 over the next 7 months (or $50 a month) to get it to 3k by the end of the year - no problem!
• I've been trying to think of ways to make the extra $50 a month towards the credit card but I haven't come up with any new ideas. I usually use the money I make on ebay to buy clothes for the children (they are clothes neutral - I sell the old stuff to buy the new stuff) but I have them kitted out for the next 6 months, so I was going to use anything in my PayPal account (from ebay, Pinecone and MySurvey) to go towards our conveyancing costs. I suppose I could use Quidco money and anything from YouGov and OnePoll for the credit card but I'm a long way from payouts on these sites. I'll have to think harder I guess.
• Couldnt read and run! ... You seem to be living on very reasonable amounts and I dont see anywhere you could cut costs back on but just wanted to wish you luck with getting everything on track! Sorry I couldnt have been any help!
• Thank you HisDoris - I thought I wouldn't mind if no-one commented on my diary but I was beginning to feel a bit lonely!
• I've just found your diary too! When you 0% rate ends on your credit card, what will the interest be? Do you know? Is your credit score good enough to apply for another 0% card at that time?
  Can you stop the savings for the children for a little while and put that towards your solicitors' fees. Later on when you have more money, you could "catch up" with the children's savings perhaps?
• Hi January20 - thanks for joining me! When the 0% ends I think the interest rate goes up to about 18% but we should be able to transfer it to another card.
  The childrens savings are a one-year no-withdrawal type savings account, which you have to pay in to every month or you don't get the good interest rate. This finishes in July so only another 2 months of payments to go then that $20 will be re-purposed! We're very lucky in that my parents pay money into another savings account for them every month (the only grandchildren - they're going to be spoiled rotten!), so I'm not too concerned about keeping up with their savings at the moment but I would like to get the bonus at the end of the 12 months of saving.
  That's another thing that frustrates me about our level of debt - in my mind the child benefit I get should be for looking after the children, I should be free to use it or save it for them but at the moment it get used to pay for the grocery shopping. I sometimes feel sad that I'm dressing them in second hand clothes and feel guilty that I'm not buying them new and pretty things but then with my sensible head on I realise that I'd probably still use ebay for their stuff at the moment anyway. Childrens clothes are ridiculously expensive given the amount of time they wear them for before they grow out of them and by the time they're old enough to complain about pre-loved clothes we will be out of this money pickle.
• I wouldn't worry about the child benefit. It's not paid to be saved up but to be spent, and whatever you use it for in your household, whether it is food, heating bill, etc the children are still benefiting. I never saved my CB for my dd. I couldn't afford. It all went in the pot. Even to this day! Frankly, I think if people can afford to save it, then they should not be receiving it because they don't need it! (I'll probably be flamed down for this comment at some point lol!)
  Your children don't know they are wearing second hand clothes. It's great to recycle clothes. It's very green and it means that if the children ruin them, you are not too worried, so they can have a fun childhood, and children grow out of their clothes so quickly, it would be silly to spend lots of money on them! I used lots of second hand clothes for my dd too.
• Hello White Iris, I have just noticed your diary. It is hard to try and cut down when there is nothing else you can do. I am the same. I have cut down so much that I don't know what else to do.
  I hope you finally get sorted. It is hard to cut down when you have children to feed and clothe.
  Good luck
• Thank you Flee. Having the children really has focused us. We weren't really bothered about living on credit until a year or two ago - now it's not fair on them to have to grow up with the consequences of our greed and stupidity. Luckily we've had a huge mega-watt LBM and we will be able to clear it by the time they start school. A settled, stable family home is the most important gift we can give them.
• I LOVE Freecycle! I've given away so much stuff over the last few weeks, it feels really lightening. We started to de-clutter in preparation for our house move (we can live in hope LOL) and now everywhere I look I see things to get rid of. I'm taken by the idea of minimalism but with two children, two dogs and a husband to deal with I've accepted that I'll never be completely minimalist, so I'm following the William Morris quote in my signature. The amount of stuff we had accumulated was embarrassing and what's worse is we're probably still paying for most of it in one way or another. So one room at a time I've been purging our house of ugly or useless things - some of it I've been ebaying but some I've given away. Freecycling might not be so good for the bank balance but I think it's better for the soul! I believe in karma - what goes around, comes around - we were given so much stuff for the twins that we need to keep things in balance.
• Hi Calley, the dungarees can and will be mended. The hole is actually on the bottom - she's a bum-shuffler not a crawler! I'm a big fan of "make do and mend", I just need to wait until the weekend so DH can corral the children and I can use the sewing machine in peace! I use to lurk on the Old Style board a lot and I definitely should get back over there - you old-stylers are so knowledgeable. Ooh - that reminds me about a saucepan I need to resuscitate after burning pasta to the bottom of it. I bet someone on that board will know how to fix it!
• Well it's been a lovely weekend in terms of catching up with family and friends but not so great where spending is concerned. We bought takeaway for everyone on Saturday then we had to buy an unexpected birthday present on Sunday and while we were out we had coffee and cakes - probably spend about $50 in total which wasn't budgeted for and we don't have, so it went on the credit card :-( I did sell some things on ebay and all but one of my buyers paid straight away but this has been wiped out by our unplanned spends. I also got rid of some stuff on freecycle and scanned and then shredded a big pile of old photos, so we now have a bit more breathing space at home.
• Hi White Iris,
  Just like you I have been lurking on this website for years and just started a diary too!
  A lot of what you have posted is similar to me - ie cut down lots already, ebay, survey websites, no child tax credits as they think we earn too much!
  I had a look at your SOA and nothing sticks out to me, however, I will pop back if I get any other handy hints!
  I just wanted to pop by and say Hi and good luck.
  (btw, for a while i thought you were from the states "$" and then realised your post of "pound sign not working" - lol)
  L x
• Hi Lianne, it's nice to know we're not the only ones in this position. That's the best thing about this site - if you read enough posts you soon realise you're not alone. Oh and I've fixed the pound sign problem now - ЈЈЈЈЈЈЈ - Hooray! Off now to track down your diary!
• glad your Ј sign is now working!! yes, track me down, would be nice to have some company!
  I like the idea of freecycle, as I hate the thought of throwing anything away - is it easy to use?