Dear reader,
A tight month here. The dreaded car of mine ended up costing £2,500 in total to get everything repaired. The original garage didnt spot the correct fault so after I'd forked out £1,800 to them I had to pay £450 for the fuel injectors to be replaced. Then it was due a cam belt change at £350.
Wonderful big man paid for the latter two bills from his car account.
An expensive bill and I will have to keep the car for several more years. It's already 11 years old.
On a positive note, we are still paying off our debt and although you may not be able to see a massive change, the progress bar has moved a bit more. We are now down to just over £24,000.
Our mortgage will reduce in January and the extra saving will go towards the debt.
Once that is paid off we will overpay the mortgage.
I am determined to have proper funds in place next year for cars, household bills that come round yearly such as insurance, chimney sweep and boiler service. We pay the others monthly by direct debit.
I also need a Christmas and birthday present account so I have enough put by. It's not as if these things are surprises so I should be prepared. Something always seems to come up and I need to use the money elsewhere.
How do you do it? Do you have separate accounts to cover all eventualities?
Have a great day. X
You're doing brilliantly. You will get there, keep up the great work.
ReplyDeleteI set up a separate 'budget account' system way back when I first left home to save for the bills that would come in (over 30 years ago!!) but that has always seemed to work, just divide your annual liabilities by 12 and arrange a direct debit when you get paid. Subsequently I set up a savings account to put regular amounts of money for birthday and christmas presents and also (in the same account) a similar amount each month towards BIG replacement purchases (white goods etc) as there is never a good time for the washing machine to break!! I know it is difficult to do at first, but soon you just get used to the fact that £X goes into savings at the start of each month and you have to live on what's left. Might I suggest you set up a regular savings account - the interest rates are very good at present on Monthly Saver accounts and although they only seem to be in place for one year now, would suit your purpose perfectly.
ReplyDeleteMy situation is different to yours, single person, three cats household here, and the moggies don't have a voice to moan if things are not to their liking, I am the boss. My state pension goes into the bank weekly, and a small top up private pension monthly. I don't separate it out into pots, just make sure there is enough month by month by checking the statement. I don't believe in lots of insurance, just the basics. Car, house (not content) breakdown and recovery. Anything else is taken care of by keeping a healthy balance in the currant account. I don't do Christmas, and don't buy birthday presents. I prefer to give gifts as and when I feel like it. I would rather people didn't buy me gifts, but am grateful if they give me second hand stuff.
ReplyDeleteTo be honest, if an old car cost me that much to keep on the road, I would get rid of it. Maybe you keep it because it is suitable for your needs, but yikes, it is eating your cash.
I have savings pots for all sorts of things! Car, Household (for insurances and replacement household items etc) Presents, Holiday savings, and of course our online sealed pot which gets the "shrapnel" from all the others shifted into it! I refuse to pay anything by monthly DD if the recipient charges extra for doing so - the exorbitant charges levied by the likes of car insurance providers are just a joke and that £30 or so a year is better in my mortgage account than being paid out to those who already charge a premium for their product!
ReplyDeleteYes, I do have separate accounts for everything - car repairs/insurance, home repairs, gifts, clothing, groceries, to name just a few. I have done this for 2 years now and it works well. I am not "surprised" by a car repair bill anymore or the bill to renew my home insurance.
ReplyDeleteMyra, from Winnipeg, Canada, where the temps are predicted to drop to -27C as our daytime high, by the week-end. Brrr!!
All it takes is planning, time and a ruthless mindset so that you do not dip into one fund to pay for something else. You have to plan to put the correct amount aside for each account. Then you will need time to build up each account to a decent level. As you have just paid a car bill this is the time to start that account rolling. Work out what you need to save each month or week and start putting that sum away now, don't wait until next year after a while you won't miss it so much. The best way to start is to book a visit to your personal banker and tell him/her what you want to do, it might be that an ISA is the way for you. Whatever route you take it means NEVER missing a payment and NEVER making a withdrawal that is not budgeted for. It will be painful but in 12 months time it will be worth it. In the past we have lived on the cheapest food that I could find rather than miss a deposit.
ReplyDeleteMy car is 10 years old and we will be keeping it for a good while yet ! We were very lucky with our car which we bought second hand. Previous owner was a retired police man who drove it very carefully !
ReplyDeleteYou are doing brilliantly, thinking and planning are big steps towards a better and easier life. I just use a book for my accounts, the front for everyday spends and BOB aka back of book for savings. BOB takes care of car insurance, NT and caravan club membership, birthdays and christmas, excluding the bigger cheques we give the kids for Christmas, that comes out of the big savings as does big repairs and replacing items.We also pay everything we can monthly so there are no bills mounting up. We are on a private pension with a nice pot of savings, we are very lucky to be in our position at our ages 58 and 61. As Pam says, its a long hard road for the first 12 months but after that it should be plain sailing. You will be so glad you did it.
ReplyDeleteTake care Karen x