How to Stop Spending When Paying Off your Debt.

 

When I was paying off my debt, it seemed that no matter where I looked, other people around me were buying all the things they wanted, whenever they wanted! Sometimes it really tempted me to splurge, or even worse, to get my credit card out and abandon my Debt Free Journey altogether. Especially as I knew this would continue for 2 years while I was working hard to get out of debt. Nobody has an iron will that lasts for 2 years, so it was inevitable that at some point I would crack!
It was pretty early on that I realised that I had to come up with some ways to avoid that temptation altogether, or I would end up spending more than I had and getting into even more debt.
So, I came up with these 10 rules on what to do to avoid temptation while paying off debt.
Know Your ‘Why’
This is probably the most important thing that you can do while you are paying off your debt. Unless you have a really good reason for doing this, you more than likely won’t be able to stick at it for long.
You may already think that you know your why, but maybe ask yourself what it is about your Why that motivates you to work towards being debt free? For example:
I want to get out of debt so that I have more money. Why do you want more money?
So that I can save it instead of using it to pay off debt. Why do you want to save it?
I want to save money so that I can buy a house. Why do you want to buy a house?
To have financial security…And the questioning continues.
What was originally ‘I want to have more money’ is developed further. Only then will you know your true ‘Why’.
Give yourself some fun money so you don’t feel deprived
Nobody can live without any sort of ‘treat’ long term.  Allow yourself some ‘fun money’. This an amount that you put in your budget every month that you get to spend on what the hell you want. I’m not talking £500 to buy a new armchair though! It’s more like £30 a month to buy a new lipstick, or go to the cinema, or £10 a month to spend on a new book every month.
How much you get to spend every month will be determined by how much your income is, how much debt you have and how quickly you want that debt gone.
If you need help working this out, you’ll need to write a budget. See my post ‘how to pay off debt while on a low income’ for information on how to do this.
Unsubscribe from newsletters or emails from your favourite stores
Personally, I could not cope with seeing all of the sales and offers that were on at my favourite shops. It felt like I couldn’t escape from being sold something, even in the comfort of my own home! So, I unsubscribed from every shop that tempted me, which was pretty much all of them.
As well as unsubscribing to these emails, I also deleted all the payment details that I had stored on all of the places I normally shopped online. From supermarkets (Tesco, I’m looking at you) to Amazon. I deleted all of my payment cards. While that doesn’t stop you from actually visiting the site, it makes checking out and paying for anything significantly more time-consuming. If you are anything like me, that will be enough to make you not bother spending.
Don’t visit the shops!
This is a fairly obvious one, but if you don’t want to spend any money, then don’t go to the places where spending is not only easy, but pretty much encouraged. For some of you (and I speak from experience here!) going to the local Mall or High Street has become part of your weekend routine.
 I used to head to my local Mall, go straight to Starbucks, grab a coffee, then walk around the shops. I’d easily spend upwards of £70 and come away with not much to show for it.
These days I find something else to do, preferably something with no cost attached. In the nicer weather I’ll head out into the garden and potter about, or I’ll take my dog on a nice long walk.
Just find a free activity to replace that Saturday morning routine and save the Mall trips for when you actually NEED something.
Hopefully these tips will help you as much as they helped me. It can be so hard to resist the urge to spend, especially when your friends and family are spending money without worrying about it.
But just keep your eyes on the prize, it’s worth it. I promise!

How to become Debt Free while on a Low Income

As some of you may know, I became Debt Free in February 2018. During all of that time, I only earned just above National Minimum Wage as a single parent.
Many people told me that I was crazy for even attempting it, that I’d never manage it as a single parent.
All I can say is that I’m glad I never listened to them!

It may have taken me longer than some couples, but the end result was the same, Debt Freedom!

These are the steps I took to become Debt Free while on a Low Income.

1. You have to know your numbers.

This is by far the scariest part, and the reason that many people don’t even start their Debt Free Journeys. It can be really scary to see exactly what you owe to people written down. The reality of that number can be enough to pretend you didn’t see it, and run on the opposite direction, choosing never to look at your debts again.
I promise you, if you have the desire to face this, you won’t be seeing that number for long.

2. Know your Income and Expenditure.

Have you ever thought ‘I don’t know where my money disappears to every month’? This exercise will show you exactly where your money goes!

Next, go through the previous months bank statements. Write down all of your income for the month. This may include things like:

Wages/Salary
Tax Credits/Benefits
Child Maintenance
Rent from Lodgers/Older Children
Second jobs

Now assign different categories for everything you’ve spent. Examples could be

Bills
Direct Debits
Entertainment
Childcare

Now split all of your expenses into either ‘Necessary’ or ‘Not Necessary’.
So items like Utilities would go into the ‘Necessary’ section, and those cups of coffee you buy in town would go into the ‘Unnecessary’ section.

3. Start Cutting Things Out!

So, from your ‘Not Necessary’ list, you now know what you need to cut out, or cut down on.
Some ideas to help might be

-Invest in a good coffee flask and make all of your ‘on the go’ coffee from home
-Stop buying.streaming films, get Netflix instead
-Reduce/Stop your Sky or Cable subscriptions
-Sort through what clothes you already have, so you don’t buy anymore
-Have a skincare and Makeup audit. Don’t buy any until you’ve used up what you already have
-Think of free things you can do with your children instead of taking them on expensive days out
-Invite your friends over to your house in the evenings instead of going to a bar or pub. If everyone brings a bottle, it works out much cheaper

Whatever it is that you currently waste money on, you can find a way around it, you just need to get creative sometimes!

4. Write Your Budget.

This part is quite simple, and there are plenty of Budget Templates available on Google to help you with this step.
Essentially you write down all of your Income and Expenses, then see what you have leftover.
One of the best Budget Planners I have seen is this one from The Money Advice Service https://www.moneyadviceservice.org.uk/en/tools/budget-planner and i have a blog post about it here http://themoneyfreak.co.uk/2018/06/24/how-to-write-a-budget/

5. Have an Emergency Fund!

Whatever is left after your necessary expenses are deducted from your income, gets saved towards a £1000 Emergency Fund (EF). At the beginning on this journey, you only need £1000 as an Emergency Fund, and the plan is to get that £1k as quickly as possible.

How can you make money as quickly as possible?

-Go through your clothes, your children’s clothes and sell what you no longer need or use
-Work extra hours
-Matched Betting
-Get a 2nd Job

To realise the importance of an Emergency Fund, imagine what would happen without it. What will happen when your washing machine breaks down, or your car fails the MOT? What happens if someone drives into the back of you and damages your car?
If you don’t have an Emergency Fund, you’ll end up getting further into debt to cover those types of emergencies, and get further into debt.

6. Sinking Funds.

Now that you have your £1000 Emergency Fund, and written your budget, you should know exactly how much money you have left at the end of every month. At this point, when you are feeling motivated to start paying off our debt, it’s really tempting to throw every penny at debt. But it’s really important to have Sinking Funds.

What are Sinking Funds? They are basically just a pot of money ( either a physical pot, or online) where you save for expected expenses. For example, you know Christmas is on the 25th December every year, it shouldn’t come as a shock!
So instead of panicking in October or November, plan ahead. Decide on how much you’ll spend on Christmas and divide it by how many months until Christmas arrives. So in January you’d divide by 12 and in June you’d divide by 6. Then bank that amount every month to pay for it.

The thing here is to set REALISTIC amounts for Christmas. Pre ‘Debt Free Planning’ you may have spent a huge amount every year on Christmas, but your budget will tell you what you can afford now!
This is the same for all big expenses. Plan ahead and you wont ‘Sink’.

Some examples of Sinking Funds are:

-Christmas/Birthdays
-Car Expenses (MOT, Tax, Insurance, repairs)
-School Expenses (Uniforms trips, bus pass)
-Pet expenses (annual vaccination boosters, emergency vet visits)

Again, depending on your personal circumstances, these may be different from mine and you may have less or more of them.

7. Paying off your debt: Snowball vs Avalanche.

Now, things get exciting! You get to put every single penny towards debt and get started with becoming Debt Free!

But which method should you choose? I don’t think there is any ‘should’ in that question, I believe its YOUR decision, not up to me to tell you.

There are 2 methods
The Debt Snowball and The Debt Avalanche.

Put simply, The Debt Snowball ignores interest rates on your debts and tackles each debt in order from lowest to highest balance. There is some good Psychology in using this method, as you gain traction quickly and get those ‘quick wins’.

The Debt Avalanche is the opposite. You list your debts in order from the highest interest rate to the lowest interest rate, and you pay them off in this order. This method has maths on its side!

Whichever method you decide to use, it’s entirely up to you. Don’t feel like you can’t change your mind either! If you start by using The Debt Snowball but find it doesn’t work for you, it’s perfectly fine to switch to using The Debt Avalanche. Whatever keep you motivated and keeps you on your Debt Free Journey is the best thing.
I personally used The Debt Snowball, as it meant that I paid off some of my smaller debts really quickly. This helped keep me motivated, but some of you may be more ‘maths people’ and prefer The Avalanche.

Here is a better explanation of both methods:

How To Get Out Of Debt On A Low Income

But after writing your budget, what happens if you don’t have any money leftover? Well, the issue is either that your income is too low, or your expenditure is too high. Or it may be both! 
In this case you either need to try working more hours (if you work outside the home already) or if you are a stay at home Mum, then you’ll need to find work outside the home that fits around your husbands working pattern. 
If you are a Single Mum like I am, you’ll need to work outside the home if you don’t already, or work more hours. I understand this isn’t always possible, but these are just guidelines.
 If you need childcare and are worried about the cost, please look at https://www.entitledto.co.uk/ to work out how much better off you will be in work. Despite many misconceptions, I have NEVER been worse off working than when I was on benefits. 

How I meal Plan.

One of the main things I’ve always struggled with, even while working towards getting out of debt, is keeping the food budget in check.
I have 2 teenage boys, and as anyone with teenagers will tell you, they are expensive to feed!

I could (and often did) easily spend £500+ a month on food. But when trying to become debt free I knew I had to tackle this, as it was my biggest expense every month and I hated seeing so much money being spent on it, while food was also being wasted.

So I did what I suspect anyone does in this situation, I had a look on YouTube and watched what everyone else was doing. But to be honest, I didn’t find many meal planners that I could relate to, and definitely none who had dietary issues ( my older son has smell and texture issues with food).

So I needed to come up with a way that worked for me and my family. I developed these really simple steps, and I hope they help you too.

1. Work out how much you want to spend

The first thing I did was work out what was a acceptable monthly food budget for the 3 of us, taking into account how much I wanted to put towards debt, how much my monthly expenses were, and how much food we normally wasted.
I settled on spending £100 per person, per month. So £300 a month. Over time I’ve managed to get this lower, but just concentrate on spending £20 less than you were each month.
This may be more or less than what other people are spending for their families, but as long as it’s less than what YOU have been spending, that’s all you need to think about. There will always be people spending less than you, but comparisons don’t help anyone.

2. Do an inventory.

To avoid food waste, I always try and start by using up what is already in the cupboards, pantry, fridge and freezer before. Not only does this avoid food waste but it saves you money too. I go through the kitchen and write down every bit of food that I have.

3. Write a list of as many meals as you can think of

The next thing I did was to write down on paper as many meals as I could think of that I knew everyone in the family liked. I was aiming for 20, but ended up with 30. When doing this, you want to refer to the Inventory you did, starting with meals you can make from what you have on this list.
This may be something that you need to leave and come back to throughout the day, as I found it quite hard to think of 20 meals just off the top of my head.

4. Look at your schedule for the month/week.

When meal planning, it’s essential to take into account what you are going to be doing for the month/week. On the nights when you are working late, you don’t want to have planned a meal that takes 45 minutes to cook. So what I do is make the quickest meals ( or eat leftovers) on the nights when I don’t get home until late, and make the meals than need  more time and effort of my days off, or on the days when I finish work early.

5. Assign each day a meal

To make this as easy as possible, I make most meals stretch 2 days. So I only have to make 4 meals a week. Any leftovers can be assigned to the days when you don’t get home until late and need to nuke something in the microwave. For example, you could make a Chilli on Monday and have it with rice. Then on Wednesday you could get home from work at 10pm and heat it up in the microwave with a jacket potato and dinner will be ready in less than 10 minutes. Or you can make fish pie on Tuesday and use it to make fishcakes on Thursday. 
 

6. Go shopping

Don’t be afraid to tweak your meal plan slightly if you see good deals. If you planned to make a roast chicken on a Sunday but once you get to the supermarket you find that Turkey is on offer for cheaper, it makes sense to change it. If you planned to have white potatoes but find that sweet potatoes are on offer and work out cheaper, get them instead.
 
 
 
Another way that you could help yourself when it comes to super quick meals, is to batch cook. 
Batch  cooking is where you make extra portions and then freeze. This means you’ll always have home made ‘ready meals’ available for you. Or you can do this with parts of meals, like home made chicken nuggets. I do this quite a lot with mainly mince based meals but need to restock my freezer as I’ve been slacking on this recently! 
 
My favourite meals to batch cook are:
Chilli
Spaghetti Bolognese
Lasagna 
Curry
Stews
Cottage/Shepherds Pie
Hotpot
Pasties
Sausage Rolls
Meatballs
Fishcakes
Nutloaf
Pizza Bases
Cookie dough
 
 
Finally, the main thing thing to remember with batch cooking is to cook, cool, freeze and reheat according to food safety standards. Foods like rice can be tricky when cooling and reheating, so make sure you know the guidelines around items like these.
Nicola, over at mumonabudget also has a wonderful blog post on Meal planning, and I particularly love her use of transparent fridge magnets to organise her meal plan. Read her blog post  to see her tips on meal planning too.
See you next time!
C.