LEARNING TO BUDGET

[caraf]

I beleive if you can save money or cut down on anything the difference is yours to keep.

[debbie.s]

I use any money I can save on food or fuel on birthday pressies or a bottle of wine or two.

[J-DOUBLEYA]

As long as you use a budget that accounts for everything, be disciplined then it should work. Ok, things will be tighter than they were perhaps but at least you have a way out of your situation.

The CCCS guidelines have been mentioned as being tight in a number of posts, especially by the IP's but,they are realistic, approved by the BBA & MAT. In addition, if the guidelines were any higher this would mean lesser numbers of people being in with a chance of an IVA as a debt solution.

I dont see what the objections to these guidelines are but i can see the impact this new agreemenr has had on fees !

[Adam Davies]

Hi
I think a contingency fund is very important and even more important to put it by each month,because you're going to need it one day.
I found life in an IVA incredibly hard,you need to have a treat now and again otherwise life can become almost unbearable.
It is important to pay all your bills as soon as you get paid,therefore the temptation to dip into that money is taken away.
At the debt debate Gill Hankey made a valid point in that she felt 100% of disposible income was too much to ask of people when you consider that under bankruptcy 50-60% of disposible income is the norm.
Regards

[J-DOUBLEYA]

Hey Andy, thats a fair point. I would love to see the OR's guidelines applied to all debt solutions. This would however mean reduced sums available and in the current climate less chance of VA's.

Where you are asking a creditor to take a cut in the amount owed i dont think that it is unreasonable for the creditor to expect the best return possible as indeed is supposed to happen in bankruptcy.

Over the next two years or so I really think we will see a radical change in lending attitudes and then sub prime lending will probably increase. Then government will encourage further borrowing to counter the problems this will bring about and through all this the underlying social and economic problems will stay hidden !!

or am i a cynic.

[Adam Davies]

Hi
I agree.
With regard to percentages of disposible income,I do not expect creditors to accepy 50-60%,this will simply exclude many people from proposing viable IVAs.Maybe a gradual increase in disposible income over the five years,so for example first and second year 80%,third and fourth year 90% and final year 100%.Maybe we would then see less variation meetings[saved costs]and more IVAs successfully concluding,this may well cover,in the long run,the lost 10% in contributions.
A topic that is not discussed very much is the amount of failed IVAs[30%+],maybe this is an area that IVA providers and creditors need to address.
Regards

[Soulgrowth]

I was interseted in J-DOUBLEYA's comments. I am no money expert but for a long time now I have been thinking that essentially the most well off people in the not too distant future are going to be those who had had to go through the process of bankruptcy for they will become the ones who have the most disposable income! Second to those will be the one's coming out of their IVAs! I have never quite understood the logic of credit scoring ... the more credit you have the sounder you are to lend to has always seemed illogical to me. Those of us who have dealt with our debt problems and have a 'note' on our credit file for 6 years will surely be the best people to lend to in the future as we have more disposable income ... thus a rise in the sub-prime lending market?

As for budgeting ... my trick is to use cash as much as possbile ... when I go to hand over a £20 note nowadays I hesitate and think "that took me x amount of hours to earn, do i really want to spend it on this?" ... such a reality check works for me every time [:)]

Debbie

[pixie]

The easiest way I found for budgeting is to keep a spreadsheet for everything. You can see exactly where all your money is going. Initially I worked out all the annual expenses inc birthdays and xmas and added them all up and divided them by 12. I now transfer that amount plus contingency into a savings account. Any of these type of expenses are then paid from this account. My main account pays the bills, food and petrol.
In the last 3 weeks all my car expenses have gone out and I've had to get new glasses but I still have a healthy savings balance. This time last year was a completly different story!
The first few months were the hardest though, I felt really guilty spending anything!

[Lula]

where can i find the cccs guidelines?

[Adam Davies]

Hi

http://www.iva.co.uk/forum/topic.asp?TOPIC_ID=7238

[marsha1]

I have discovered the local market, it is amazing and really proves that you can still eat well on a budget, after all our health is our wealth. I can buy lovely fresh veg/fruit,meat,poultry and fish and all so much cheaper and fresher than the supermarkets. I work 5mins walk from our market so its covenient as well, but even if it means a trip out you can save a lot of money, I have been amazed.

[DMB42]

I'm 14 months into my IVA and like you all have found budgeting a hard lesson to learn. I have a "rainy day" fund that I try and save for things like car tax and service etc. I've found nothing quite beats the feeling of putting the £20 - £30 I manage to save into my own account each month. Like someone said, it used to be so easy to just put everything on the plastic. Now I think twice before I ever buy anything and when I do, it means a lot more because I've had to save for it. I still have friends who are re financing to pay for their lifestyle. When I hear them say they've just re mortgaged again I give a huge sigh of relief because I'm not in that race anymore. God willing, I'll be finished in another 46 months...not long if you say it quickly.....

[MelanieGiles]

In my opinion, there should be no reason why someone who needs to avail of the debt forgiveness offered by an IVA ought to pay over all of their disposable income to their creditors - however the allowances for expenditure must be realistic and based upon actual expenditure incurred rather than set allowances which may not be suitable for every household.

I have been using the CCCS guidelines in my own practice now since September 2007, and find that for families with children they are far more generous than for single persons or childless couples. And with some disclosure comments on areas where actual amounts are higher than the guidelined, I rarely encounter problems with creditors.

When it comes to annual reviews, a good IP will listen to their client and accept that expenditure needs to increase in line with inflation and actual requirements. To this end most of my clients report that the first year of an IVA is the hardest as you adjust to budgeting which may not have been done for several years. If ongoing reviews are then carried out properly, you ought to find that the IVA is a comfortable mechanism for debt repayment and then eventual release.

[Skippy]

I'm going to be honest - I am still completely useless at budgeting and I think I always will be! Don't get me wrong, I don't ever want credit again!

I do all my shopping at Sainsburys and save the Nectar points, and I try and buy my petrol at BP for the same reason. BP is only 1p a litre more expensive round here, and I find I get more miles to a tank of petrol. I also still can't bring myself to use supermarket petrol after being caught by Tescos dodgy stuff last year!

Unfortunately most of my savings have had to go on paying Dave back as I needed so much work done on my car last year (so much for being better off having a newer car, I've never spent so much!), so I'm not looking forward to the car service this year! Oh well, I'll manage and I don't have to worry about the credit card bills any more. It is a learning curve, and I'm sure we'll all get there in the end!

[Shining]

Today is the first day of my IVA and I've shopped on the market and discovered Heron! What a differece in their pricing to that of Morrisons, still went to Morrisons to get some stuff but all in all I think this week I've saved £20 minimum. With that I did put a bit extra diesel in the car as it's running on empty all the time! Anything left in the purse on Monday is going in the tin as I don't need money in the week.