How simple are your finances?

26 October 2008

One thing I have done over the last 3 years of debt repayment is simplify my finances. I used to have at least 6 credit cards, 3 loans, 4 checking accounts, 2 e-savings accounts, 2 passbook savings accounts, premium bonds and other's stuff I've probably forgotten about. There used to be countless direct debits coming out every month, which I would lose track of. All of this when I was £45k in debt, with no money and earning £10k less than I am now. Looking back it was madness.

Today everything is much simpler, and I want to get it even simpler by using a cash only system for day to day expenses.

My personal accounts:

A personal checking account
An e-saver - emergency fund account
An ISA - long term saving
A credit card for work expenses
2 loan accounts until paid off

My salary is direct deposited into my personal account, with my pension contribution already taken. Everything else I have to pay, is then taken automatically. The amount of Direct Debits/Standing Orders I have is quite minimal:

Automatic Payments:

Standing order to joint account to cover share of bills
Transfer to e-saver -ef
Transfer to ISA - long term saving
Direct debit to both loans
Direct debit to take full balance outstanding of work expenses credit card
Direct Debit to World Vision
Snowball payment to loan No1 {I change this amount monthly}

I've tried to use cash before, just for my groceries, and I struggled to make it work, however I'm willing to give it another go. Outside of these payments above I'm switching to a 'cash for everything' system during November and December. I'll let you know how I get on.

7 comments:

Sharon RoseOct 26, 2008 10:07 AM
Hi there-My post I did earlier today includes advocating a cash system in your budget too! I find now though it works better for me to pay my groceries by debit card from my main bank account, as I was dipping into it when it was cash for other things. I also agree that less is more, I too had lots of credit cards and now only have 1!! Still, if we can learn from our mistakes, it is only a good thing!!
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journeytofrugaldomOct 26, 2008 10:56 AM
45,000 pounds in debt, that's a s**t load of money! Wow

I generally try to stick to cash as much as possible to avoid the "what the hell was that transaction again"

I also track my non fixed spending in a small note book, end of the month I can total everything up. Unfortunatly "Misc" tends to be the largest catagoury.
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moneymatekateOct 26, 2008 01:07 PM
My grandmother kept a cash envelope system in a closet shoebox for her budget. My mother keeps her statements, receipts, etc. in a shoebox under the table. I keep my cash in a little oblong cake tin behind my computer.

But that's not what you're talking about, heh. As a massage therapist, 90% of my business is transacted in cash. I would pay for everything this way if I could, but that's not the way the world works. I do use www.wesabe.com for tracking my spending because it's one of the few that allows you to track your cash.
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laura @ no more spendingOct 26, 2008 02:34 PM
thanks sharonrose as always :)

rob..was £45k now £15k..much better ;)

mmkate..we might be better going back to a cash society at the moment :)
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notesfromthefrugaltrenches.comOct 26, 2008 04:11 PM
Oh sweetie, good luck re November and December. I think it's really wise to figure out what works for you and then try again, it's such a learning curve!

You are so determined and sensible, I know you can do it! And the most amazing testimony of your soul is not how much debt you were in but how well you've done paying it off!

You're a star!
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Mary@SimplyFortiesNov 3, 2008 06:47 AM
I love that you are using a variety of techniques to come up with what obviously works for you. Good luck!
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Mr. (not) the Jet SetNov 8, 2008 06:38 AM
Congrats on simplifying your life and your finances. We've found the simpler routes to be the better ones too. Our Cash Envelope System
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