Economy drive

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Lily
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Re: Economy drive

Post by Lily »

That's brilliant Skips! Who's that with?

Thank you for the links Morgs; I have a lot of reading to do.

A friend has asked if we can go out for dinner this week; I've invited her to mine to save £.
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Skips
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Re: Economy drive

Post by Skips »

The loan is with Hitachi Finance and I've already made my first over-payment. If I keep that up each month it should be paid off in July 2023 according to a repayment calculator I used. If I get any bonuses/cashback in the meantime I will chuck that at it also and I'm thinking if there is anything in the joint/fuel accounts at the end of the month that can chip away at it too (although they will only be very small amounts).

I'm also thinking the help to save bonus we get in two years may go to the loan also, the less interest we pay the better and that money is paid into my account after that time. The plan was to move it to the house moving fund, but that's three months of payments that I could reduce the loan by and I could 'pay' that back into the saving account when the loan is cleared (which is the plan anyway, it would just bring that date forward). We can't move until early 2024 due to early repayment charges on the mortgage, but that gives us time to get everything in order and save to cover moving costs.

How're you getting on this month Lily?

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Lily
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Re: Economy drive

Post by Lily »

Well done Skips, that's brilliant. That sounds a lot more positive.

I've actually had a good month! I have been much more thoughtful about my shopping, spending and eating out, buying things I don't need, etc. and as a result I've spent a lot less. I've had a bonus which has cleared a chunk of my credit card and next month I should have more disposable income because I won't be paying off £xxxx which I put on my other overdraft/credit card. I am still to work through my budget properly but I feel like I have control. Which scares me a bit.
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Mayday
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Re: Economy drive

Post by Mayday »

Well done Lily!

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Lily
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Re: Economy drive

Post by Lily »

Thank you - we will see how I get on this month. I hope I can stick with the mindset I've developed; I can feel the SPEND!!!!!! urge rearing its head but the feeling of not having spent is so much more satisfying!
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Lily
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Re: Economy drive

Post by Lily »

So get this - my brother worked through all my finance with me last night. He mentioned that I need to stop seeing my overdraft as an extension of my current account (it's £250 and I am always in it). If I go into that on every month that adds up to be about £3k a year - and the clever chap pointed out my credit cards more or less total up to £3k a year every year (last year was more expensive due to my holiday). There's a reason the boy was made a Director!

I am sticking to a budget for the first time ever; it works out to be about £80 a week until I get some extra income, which isn't too bad. I have got into the habit of filling my car up with petrol but if I put in £30 rather than £45 that will work perfectly well for the week.
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Skips
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Re: Economy drive

Post by Skips »

That's really positive about staying within your budget! You will find it easier as you adjust and get into the flow of sticking to it. And your brother is wise about using your overdraft - definitely try to stay out of that if you can. Or look for a bank account with a fee free overdraft?

My colleague gave me a 5p off per litre of petrol voucher that I'm saving till I'm running on empty (she has company car and uses a fuel card).

I feel like I've got everything sorted and I'm now on the long slog of just paying it off. I'll see you all in 3.5 years when hopefully I'll have cleared the loan :twitch:

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nineseven
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Re: Economy drive

Post by nineseven »

Lily wrote:
Tue Feb 04, 2020 4:45 pm
So get this - my brother worked through all my finance with me last night. He mentioned that I need to stop seeing my overdraft as an extension of my current account (it's £250 and I am always in it). If I go into that on every month that adds up to be about £3k a year - and the clever chap pointed out my credit cards more or less total up to £3k a year every year (last year was more expensive due to my holiday). There's a reason the boy was made a Director!
I don't follow - if you overspend into your current account by £3k a year, and also have £3k owing on credit cards, doesn't it make it £6k a year rather than being evened out? Am I being thick?

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bramblerose
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Re: Economy drive

Post by bramblerose »

I read it that the cost of the overdraft is £3K and the cost of her cards are £3k so if she stays out of her overdraft then that covers the cost of her cards?
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Re: Economy drive

Post by Topcat »

That's what I thought too.

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nineseven
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Re: Economy drive

Post by nineseven »

That sounds like an incredibly expensive overdraft if it's costing £3,000 a year! Is that normal? I assumed Lily meant she spends £250 x 12 = £3,000 a year on her overdraft.

Ella77
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Re: Economy drive

Post by Ella77 »

I’m with mince.

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Re: Economy drive

Post by Ella77 »

:bite:

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nineseven
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Re: Economy drive

Post by nineseven »

:lol:

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ParisGal
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Re: Economy drive

Post by ParisGal »

I don't quite understand the calculations either but it sounds like you're doing really well.

Will you still have enough petrol to do your mileage though? I fill up completely when nearly empty, so it's quite a big one-off cost but I don't have to do it so often. I also have the car displaying the current estimated consumption and like to adjust my driving to optimise it (within reason of course, I don't drive on the dual carriageway at 40 or anything).

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Skips
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Re: Economy drive

Post by Skips »

I think I misread it that is was costing her £250 a month. Otherwise I don't see how it makes any difference? You're just moving the spending over the overdraft into paying the cards off but with a proper budget you should be able to reduce both down (or clear the overdraft one month and never use it again).

I'm probably completely misunderstanding.

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Re: Economy drive

Post by Edith Bacon »

I am also baffled by the maths described. Eli5 please, Lils.

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Kenickie
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Re: Economy drive

Post by Kenickie »

Yes, it sounds like you're overspending by £6k a year currently. Have you made sure you've accounted for everything in your budget eg occasional expenses like birthdays and putting aside money to replace things like white goods when they wear out?
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Kenickie
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Re: Economy drive

Post by Kenickie »

Unless you spend £3k a year in credit cards but clear them every month, then it is just a £3k overspend each year. Have you worked out what it's going on?
If your back's against the wall, turn around and write on it.

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Lily
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Re: Economy drive

Post by Lily »

bramblerose wrote:
Tue Feb 04, 2020 5:24 pm
I read it that the cost of the overdraft is £3K and the cost of her cards are £3k so if she stays out of her overdraft then that covers the cost of her cards?
This. The overdraft is interest-free so it doesn't cost me anything, but it's still money I don't have that I think I have, if that makes any sense.
You're just moving the spending over the overdraft into paying the cards off but with a proper budget you should be able to reduce both down (or clear the overdraft one month and never use it again).
Exactly, hence the budgeting.

Yes, Ken - Froozy helped me come up with some ideas for what I need to save for on a monthly basis including yearly costs like car insurance which I would normally put on my credit card and pay off the following month, thus landing me with a shortfall in my "real" money.

Skips, let's keep on track on here and keep checking in to see how we're getting on! It's a bit nerve-wracking having paid a big wodge off my credit card thanks to my bonus, and still having money left over. This scares me.

PG - I will fill up once a week, rather than when my car is empty (I normally have to fill up every say 8-10 days) to try and keep to my budget. If that makes any sense. I'm trying to think of this on a week-by-week basis. My first main jobs only ever paid me weekly, so that is what I am used to - it really weirded me out when I got paid monthly and perhaps I'm still not used to that. :ella:
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