The Budget

To give readers a sense of what I am spending – with no justifications here, but I am sure justifications and explanations will arise in the posts – here are my outgoings and income and balance overviews.  I keep this all on a spreadsheet and keep it updated every month or so with any changes.  This gives some flavour as to how I am in a position of only having £5.50 to live off after main costs (most of which I can’t get rid of, some of which I do not wish to get rid of).

Table one – annual payments

Table two – Debt tally overview

Table three – Net income and in/out

Table four – full breakdown of outgoings including debt payments.

 

Annual Payments    
Ground Rent 10  
Road tax 20  
Amazon Prime 39  I get Amazon Prime student, and a huge saving.  This is my only source of home TV and movies as well as free one day postage.  Click the link to get a free trial on me.
NUS 10  To keep Student Prime and student discounts I sign up for a cheap course via Groupon to stay a student every year.
Work discount card 10  ?? Not sure if will get this. Check how good its offers are.
Course so get NUS 21  Random course online for NUS Card so keep Prime!
     
Total 110  
PCM 10 Use daily allowance which you should be accruing – (eg accrue more than £10 pcm in readiness) to cover these annual costs
    Tally of Debts Not including Credit Union £17k debt deducted pcm at salary source – worry about this when cleared these debts below! Babysteps!  
Date Updated Item Balance % PCM Notes  
  Barclaycard 1347 0 61 0% 18 Sep 2019  Will be paid in full at end period
  MBNA 1445 0 25 0% Dec 2018 Consolidate remaining amount at end period
  Shawbrook 12000 11 259 Until end 2021 – consolidate when sell flat in 2020?  
  Ikano Loveseat 300? 0 20 Check end date and early repay options  
  HSBC OD 1000 0 0 Tackle when nearer 0% end date – when?  
  Total 16092   365 pcm    
IN PCM  
Salary Net 1230 This is after  deduction of nearly £900 at source for credit union loan (£17k!) tax, NI pension, and student loan
Total Out 1060  
In-Out= 170  
Daily allowance = 5.50 Ideally 0 per day except bare essentials
OUT    
Item Cost  Notes
Monthly DD
Council £29.10 Service charge
Council £7.04 Insurance
Council £78 Council Tax
Newcastle Mortgage £220.12 1.8% Til Feb 2019
Tesco Home Contents £6.27  
Virgin Media £21.00  
Animals in Distress £3.00  
Water Board £28.18  
Octopus Dual Fuel £50  
David Lloyd Gym membership £70 Split total with ex = 140 goes out, ex pays 70 in
GifGaff £12.00  
Admiral car ins £23.00  
animal lottery £5.00 Charity
National trust £5.40 Ends April – no renewal
Skoda £113 Until trade in and start new lease.
Mum’s 02 £13  
Barclaycard £61  
MBNA £25  
Shawbrook £259  
Ikano Loveseat £20  
Spotify 9.99  Miscalculated. Thought was Student rate of £4.99. Will affect end balance. To amend.
     
1&1 Hosting & Domain 1.19  
Prescriptions ??  
Total £1,060.44  Amend when sort spotify/dropbox discrepancy.

Day One – Let the Fiver Project begin!

Day One

27/11/2017

Hello, welcome, and I am delighted you are here!

This is Day One of my blog and marks the start of my personal project to spend less than £5.50 a day.  Or, “the fiver project” for short.

So, how did I arrive at this challenge?  Well, the short version is that I have been thinking about money for a while, about debt management, savings and even… dare I even hope, growing wealth.

I am in something of a pickle financially.

However, with inspiration from such gurus as Sugarmamma.tv, moneysavingexpert.com and lunajaffe.com I have finally found real motivation and determination to resolve my financial problems, to focus on the long game and to endure a tightened belt for a greater, debt-free future without those horrible money anxieties that prevent a joyful life and make working hard at a full-time job feel so unrewarding and thankless.

I have completed my budget and realised the uncomfortable truth: that I have been overspending for far too long, accumulating thousands and thousands of pounds worth of debt.  To be exact and tell the painful truth – about £33,000.  And that’s not including my mortgage or my personal contract plan on my tiny city car; debts which I consider ‘sensible’ debts rather than the £33K of indiscriminate, irresponsible and unfettered spending over the last four years, and the ridiculous interest charges into the ‘bargain’.

I have decided to take back control of my money!

My budget tells me that, after all my debt repayments and a small amount of savings (just £10 pcm – more on paying down debt vs savings and my very personal take on this dichotomy will follow soon), alongside essential bills such as gas, electricity, water, council tax, mortgage, I have £170 per month, or £39 per week, or £5.50 a day to live off!

£5.50!!!  That’s for food, petrol, clothes, make-up, toiletries, skincare, household items, socialising, gifts, and even those annual costs like road tax, Amazon Prime etc must come from this £5.50 per day!

How on earth? So, my plan is to remind myself every day that I only have £5.50 to spend.  All my essentials are covered by my overarching budget to keep a roof over my head (more on budgets in another post).  I already have clothes, and running water. But if I want anything else, like food, loo roll, petrol, jewellery, a Christmas gift for a loved one, then it must come from that £5.50.  This doesn’t include anything I have already paid ahead for, so an Airbnb booking later this week for a funeral was made and paid for before this project started, and I obviously have store cupboard and freezer food to keep me going. But any purchases henceforth, like that funky-looking teapot from TKMaxx or some must have olive oil from Aldi (yes, I thought I already lived a frugal life with these being my usual shopping haunts! Not so!) or the supplement on Amazon that will help me sleep better, all of these will have to be purchased within The Fiver Project rules.

I am allowed to rollover any unspent money every day, indefinitely.  So today was day one and I have not spent any money that is not in my overarching budget, so tomorrow I have £10.82 in my virtual ‘purse’.  Ideally I would keep accruing this day by day so that I can build a surplus, and the key challenge is going to be to avoid spending even £5.50 a day if I can help it!  That way, I have an accrued surplus building up.  Any accrued surplus after 365 days will go into my savings account for emergencies, pay down debt, or indeed, for joyful – named – pursuits which I can feel I’ve truly worked and saved for.  By named pursuits I mean things that I have stated an intention to save for.  Not just something I fancy buying because I read about it today on the internet.  Something I have longed for and know I will love and appreciate.

But I am not allowed to ‘lend’ today tomorrow’s money.   If I need a new toothbrush and have already spent today’s accrued money, then I have to buy the toothbrush tomorrow.  No tic!

The only exception is in extremis – say the boiler needs some work.  In that case, I can borrow from the rest of the month but it does mean that I have to pay it all back by not spending my daily allowance until I am back to a £0 balance or better.  So, say the boiler check up comes to £60 and I have only accrued £32.  I can pay myself £28 to cover the rest, but then for over five days I am not allowed to spend anything, resuming the £5.50 per day allowance on the sixth day!  HARDCORE!

So why blog it?

Well, I know me, and I know I only stick to things when I am accountable in some way.  Even then it’s touch and go sometimes!  I believe I am more likely to ask myself the “Do I need this?” question at the moment of near expenditure every day, if I know I have to update a daily blog.  It doesn’t matter if nobody’s reading for this particular purpose, but it helps me somehow in a way that writing in a paper diary wouldn’t feel so ‘exposed’.

And, I would love to share with others my strategies for managing money with such limited means, my musings around getting into and out of debt, my frugal solutions to not having any money, to learn from and give support to others who may have similar financial difficulties.  I would like to talk here about how I came to be such a financial flop!  And how I plan to ameliorate that from now on.  And hopefully show you that you can too!

I plan to share my entire budget on here, including my debt repayment plan.  I also plan to share my daily outgoings sheet for the £5.50 a day project at the end of each month, so you can see it in black and white and so that I can refer back to it as a record of my progress.

I am going to share my daily spendings and rationale here in a daily blog.  This will help me learn my patterns, see what triggers there are and enable me to work through these issues and share my conclusions.

And after 365 days we will see if I have accrued anything at all to put into savings or pay down a lump sum on debts.

Lastly, I will be trying to remain anonymous for the time being at least.  This is because I work in the public sector and my thoughts may sometimes be a bit political!

So here goes. 365 days, £5.50 a day!  Can I really do this?

One of the rules of The Fiver Project is for me to always remember, when feeling despondent about the limitations it imposes, that there are people far worse off than me, who could never have got themselves into this much debt in the first place, who do not have a roof over their head, or earn far less than me and don’t have choices.  I certainly was not born with a silver spoon in my mouth by any means, but I have a job.  And a home.  A bank account, a laptop and broadband.  I am somewhat ‘skint’ but I am not quite below the poverty line.  I will thank my blessings that I have what I have, and show gratitude.  And remind myself that, by clearing my debts, by saving money and maybe even eventually creating wealth, I can do more to help those in need.  And maybe this blog can help others too.

Wish me luck!

Fiver x