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.
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.
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!!
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 http://www.wesabe.com for tracking my spending because it’s one of the few that allows you to track your cash.
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
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!
I love that you are using a variety of techniques to come up with what obviously works for you. Good luck!
Congrats on simplifying your life and your finances. We’ve found the simpler routes to be the better ones too. Our Cash Envelope System