# Financial makeover Help Needed



## neonman (15 Mar 2013)

Hi Guys,

Looking for some advice on how to manage our household money better.

We are both working and have one 2 year old.  The problem is at the end of the month we are in the red by €500.  We are trying really hard to get back into the green but are finding it very hard.

I get paid monthly but my wife gets paid weekly which i feel is one of the reasons we are not managing our money, i feel if we had both wages going in monthly we could then see what is ahead of us and plan much better.  For example set up a second bank account to manage all our DDs and what is left over is used for day to day expenses.  As you can see we have over 1000 left after all outings are accounted for but we are struggling big time?  Any advice??

Our incomings / outings are below.

        	Monthly	Weekly

Wage 1	2973.76	
Wage 2	2388	         597

Total	5361.76	

Monthly Debts		

Mortgage	1851.23	
Broadband/phone	   51	
Heating	69	
Gas	89.77	
Car Insurance 1	38.62	
Car Insurance 2	25.39	
Health insurance	82.08	
House Insurance	36.08	
Car1 	200	
Mobile phone	78	
Savings	150	
Standing Order(Loan)	80	
Life Insurance	106	
Tolls	80	
Petrol 1	200	
Petrol 2	200	
loan/other	243.71	
Food	        300	


Total	4120.88


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## neonman (15 Mar 2013)

Its take home pay.

Need the two cars as public transport isn't an option for us.  No childcare costs family look after our two year old so very lucky in that respect.

The standing order is for college and other loans from a number of years ago.


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## Importer (15 Mar 2013)

So you've given us your net income and you have given us your monthly outgoings, which leaves us a surplus of 1241 and each month you run a deficit of 500. By my reckoning there's still 1741 of outgoings unaccounted for ??


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## Dermot (15 Mar 2013)

Monthly	Weekly

Wage 1	2973.76	
Wage 2	2388	 597

Wage 2 Is the 597 the weekly wage because if it is you have another 2388 of an income. If it is the monthly income there is no need to change your post. 
Where I am coming from there are 52 weeks in the year. 12 * 4 is only 48. In your post you are multiplying a weeks wages by 4 to give a months wages as in 597*4 =2388. Your post is pretty well laid out otherwise.


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## Greta (15 Mar 2013)

How about giving yourself and your wife weekly spending money in cash, a set amount, and sticking with it? No credit cards, no debit cards, just live on, say, 250 euros per week in cash between the two of you, in addition to all the dd bills you listed. And also start an emergencies/big expenses fund, as a separate bank account, so you budget for big expenses (annual insurance renewals, car repairs, holidays etc) in advance.


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## neonman (15 Mar 2013)

Dermot said:


> Monthly	Weekly
> 
> Wage 1	2973.76
> Wage 2	2388	 597
> ...



Yes wage 2 is weekly of 597, can be a little more 610-620.


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## neonman (15 Mar 2013)

Our problem is that we can't seem to get our heads above water.  We are 500 in the red then then next weekly wage comes in (Friday's) 500+ and before you know it we are heading back towards -500 as a DD might come out like it did today.

Would going Interest only on the mortgage for a couple of months be a good idea that way we can get out of this rut and have some cash in our bank account.

We are keeping a running total at the moment of what we spend using mobile apps so we can get a better idea of where the money is going.


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## Dermot (15 Mar 2013)

You have an after tax income of just over 5400 per month when you include the extra 4 weeks income. You show outgoings of 4120 which covers mortgage, general household bills,travelling to work etc. That leaves about 1300 per month for "other spending". The last thing I would consider would be changing the mortgage repayments. You could price around for cheaper Life cover as alser suggests. You need to look at the 1300pm that you have not accounted for in the post. That is where you need to cut back on discuss with your partner. From the figures quoted you should be actually saving more money.


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## 44brendan (15 Mar 2013)

> How about giving yourself and your wife weekly spending money in cash, a set amount, and sticking with it? No credit cards, no debit cards, just live on, say, 250 euros per week in cash between the two of you, in addition to all the dd bills you listed. And also start an emergencies/big expenses fund, as a separate bank account, so you budget for big expenses (annual insurance renewals, car repairs, holidays etc) in advance.


 
This is the key to your problem. There is a significant amount of expenditure not accounted for in your listing. This obviously relates to items like entertainment/clothes/meals out etc! Unless you can control these costs you have no chance of balancing your income/expenditure. With 1 child and a significant amount of surplus income you are in a far better financial position than most! All you need to do is control the unallocated expenditure, allow yourselves a reasonably monthly budget for same and stick to it. This may involve paying for these items in cash. i.e. drawing out a limited cash amount each week and restrict spending to this amount. Unless you apply this type of control you are wasting your time!


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## neonman (15 Mar 2013)

I've gone through our bank account a few times now and have accounted for all the DDs/SOs.  As you said I'll have to look at where the rest of the money is going.

Think I will start by giving myself and the wife cash to do us for the week and not to touch the bank account.  That way we'll know for sure where the rest of the cash is going.

Thanks for all the advice so far people.


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## elcato (15 Mar 2013)

> €106 for life assurance seem high


Do you smoke ? Or are there some medical bills that need to be kept up ?


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## Mrs Vimes (15 Mar 2013)

I would suggest the first thing you do is keep note (app or notebook) of every penny that is spent - coffee, newspapers, sweets, top-up shop on the way home from work, etc.

After a couple of weeks it should become apparent where the other €1,300 is going - that is actually €300 per week - more than four times what you think you are spending on food!

If you can "find" this money then you will see whether you actually have a problem or whether you just need to cut back on the above spending - the overdraft will disappear in 2 weeks if so.


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## Spear (15 Mar 2013)

Mrs Vimes said:


> I would suggest the first thing you do is keep note (app or notebook) of every penny that is spent - coffee, newspapers, sweets, top-up shop on the way home from work, etc.
> 
> After a couple of weeks it should become apparent where the other €1,300 is going - that is actually €300 per week - more than four times what you think you are spending on food!
> 
> If you can "find" this money then you will see whether you actually have a problem or whether you just need to cut back on the above spending - the overdraft will disappear in 2 weeks if so.



+1

You need to itemise everything in a diary for at least a couple of months until you can account for every penny. I think it's too soon to start talking about interest only mortgage until you understand where you can improve expenditure control.


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## PaddyW (16 Mar 2013)

Don't go anywhere near Interest Only on the mortgage, until you account for the €1300 that's missing!


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## doubledeb (18 Mar 2013)

I doubt your bank will consider interest only anyway as long as your income outways your outgoings.  Maybe get the bank to send you a standard financial statement, or maybe you can download one from the internet,  and write down every single thing that you spend each month.  
I found this very helpful.
You would be amazed at what you forgot to account for!

I'm not sure if its in relation to the new PIA legislation, but my bank has refused to grant us interest only as long as we are servicing our unsecured personal debt.

We have 2 credit union loans and they told us to basically stop paying these altogether (this is our only source of credit in an emergency).  We haven't borrowed from either since 2009 and the balance is reducing slowly but surely so I have no intention on defaulting on either.  In 18 months time we should one loan clear and almost 500 pm better off.

The mortgage provider just doesn't want to know.


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## Bronte (19 Mar 2013)

Food bill is low. 300 a month for a family of 3 ? Does that include toiletries etc.  How are the groceries purchased?  With the bank card?


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## neonman (23 Mar 2013)

Thanks for all the advice.  We are in the process of writing everything down that we spend.  We have decided to give each other €100 cash for day to day expenses and anything we spend that on has to be noted.  Everything else that comes out of the account will be for bills only. 

Hopefully after a few weeks we'll have a better idea where the money is going.  I've also started to bring in my lunch into work which will probably save me around €20-€40 a week.

Again thanks, all sound advice.

Neon.


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