Month One: Nasty medicine…

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Month One

So, here’s a little monthly review. Hope it’s not too dull! I promise that this will not be a blog detailing every penny I have spent. Everyone’s families and lives are so dissimilar, I don’t know how that would be helpful, or particularly interesting!

So far things are going well -ish. Taking a long hard look at our finances has been a difficult process but I am positive that having done so, we can move forward. I know where we are, where we need to get to, and I have put in place interim targets to ensure we keep moving forward.

Owning up to a debt is probably a bit like being told you have a serious illness. There is some disbelief and denial involved, before you finally realize that you just have to take your medicine. Or ‘suck it up and deal with it’ as a good friend of mine says.

Having spoken to many friends and family about what we are trying to achieve, it has become very apparent to me that we are not alone. Most of my friends are also carrying debt. Some are worried. Some are not. One amazing friend told me how she found herself £7k in debt after unexpectedly becoming an unemployed single mother. Prior to her becoming single, she hadn’t viewed the debt as a problem. It was just something she lived with. It was only when her circumstances radically changed, that it became a problem. This fabulous amazing woman, in circumstances that would floor mere mortals, took stock, and took action. She is one of the savviest women I know, and I shall be picking her brains for tips.

But it’s an interesting thought; how many people if they found themselves in a life changing situation tomorrow would be in a financial stable place? We certainly wouldn’t, and Step-Change believes that one in ten of us would need to borrow within a week if we lost our jobs.

So, in order to get ourselves sorted, very simplistically, we need to spend less than we earn. YES! This is exactly like rocket science. But just like trying to lose weight, just knowing that you have to eat fewer calories than you burn, doesn’t magically make it happen.

To lose the weight of our debt, we need to 1) develop money mindfulness 2) spend less 3) earn more.

Mindfulnes.

I am trying to think of every decision I make as having a financial consequence. Not just purchasing ‘goods and services’ but in every day actions such as using the tumble drier, or putting the kettle on. Having considered the consequence, I am then free to make a choice. A bit mentally exhausting at first, but I’m in the habit now, and it’s having some amazing results. Best of all, I haven’t banned myself from anything, I am still free to choose to do whatever I like. But it is surprising how many decisions are made through habit and association. Such as getting a coffee from a certain coffee shop, or chatting on the home phone when I still have free minutes in my mobile. And how many times I boil the kettle, and then forget to make the tea!
2 Spending less
Good news on the energy front. I am a bit neche, and so have the heating on a timer. We have decided to put it on, only when I feel cold, instead of “because I might get cold” I have also been submitting weekly meter readings, so that I can track what we are using, and keeping a close eye on the energy monitor. Result? We have cut our usage by one third, and as we are coming to the end of a fixed rate deal, I have been able to negotiate a reduction of £40 per month off our energy bills. I expect this to come down further once our changes have had longer to bed in.

Other notable savings this month have been gained from

Making Mother’s Day gifts and birthday gifts (tutorial available) saving £60
Using a mobile hairdresser for family haircuts saving £15 per trip
Reviewing direct debits, subscriptions etc £15 per month
Reviewing Phone contracts saving £10 per month
Monthly food shop…. £250. Really proud of this!

3. Earn a bit more

We haven’t quite got into the swing of this yet. As a freelancer working in education, my earnings are a bit up and down. Over the year, it averages out at a good salary, but there are times when I have a fair bit of downtime, such as school holidays. When my children were young I really valued this time with them, but now they are older, I don’t need to worry about childcare, so my aim is to seek more contracts to fill the summer holiday void. So far, I have picked up some workshop delivery at the local library, and some assessment work. This will definately help with the cash flow.

Other income

Ebay….a bit….we really need to get into the loft and get rid of some junk! Made £120 this month though, just selling a few coats and children’s clothes, so not bad. That’s straight towards the credit card debt.

Car boot sale. I used to love doing these in years gone by, before Ebay even existed, and can’t wait to get my pasting table out again. I’ve buddied up with a friend, picked a date next month, when it’s a bit warmer (told you I was neche) and I will let you know how I do.

Better go. There’s a loft waiting for me to rummage around in.. Xx

 

 

 

 

 

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