The money talk

I’m not sure how to go about this… I want to be honest but if I start discussing specifics I have 2 worries.

1.) That I give away so much I wind up the victim of fraud

2.) That specifying income might cause some people to ignore what I’m saying because they’re focussing on what they could do with those wages. I’m aware my wages have been very good (I’m not talking 6 figures on anything, but higher than the national average and triple the average for my home town) but you tend to spend according to your income, if that goes up so does your spending, your lifestyle choices adapt. So when your wages go down it’s a squeeze.

I have decided to land somewhere in the middle and discuss actualmonetary amounts where needed and just talk in percentages everywhere else.

So, lets start with my glorious 2013 wages. That was the most money I had ever earned. I almost doubled my income through overtime because we wanted to buy a new house and we couldn’t really afford it so I had to work as much as they would let me to afford the deposit (our last house got hit by the recession and we lost money on it so not much equity) and then because we doubled our house size, we had to spend on furniture to fill it.

In 2014 I cooled it a bit and started a part time degree so I couldn’t keep up the overtime. 2015 I got promoted so my base wage went up but I reduced the overtime even further because I was pregnant and couldn’t be arsed, 2016 I went on maternity leave (and maternity pay) and this year, I’ve decided to go part time.

I’ve cut my hours from average of 70+ per week down to 21. That means that I’m earning less than 40% of my 2013 wages. But with an extra person to feed and clothe. Oh and HAVE YOU SEEN THE COST OF CHILDCARE???

Literally the only part of my life I’ve managed to minimise is my income.

Which brings me to today. When I got my first part time payslip and realised I was £300 short of paying my bills. I mean before paying for diesel or food or clothes, social stuff anything like that, I actually could not pay my bills.

Between my husband and I we’re around £35k in debt. Which didn’t sound so bad a year ago. I mean 2 cars, some home improvements, couple of Apple upgrades… It didn’t even seem extravagant. Until now, when I can’t meet the monthly payment. Which, after having months where I could meet those payments and have upwards of £2k left to spend on whatever I fancied (Valentino shoes, Alexander Wang bags, last minute long weekends in Athens or Stockholm) is quite the shock.

I want to reduce the number of companies and credit providers I deal with. Reduce paperwork, reduce direct debits. I want to have savings. We’ve been very good about adding to the baby’s savings account (her savings account balance is more than I will earn in the next 3 months!) but we used up all of our own savings last year on maternity leave.

Really what I want is to get my finances into a state where we have money for emergencies, can go on 2 holidays a year (long weekends within Europe using air b&b, not big fancy holidays) and not be stressed about money. I don’t want to rely on credit, I don’t want Christmas to be a huge financial catastrophe, I don’t want to be pushed into increasing my hours at work because we need the money.

I’ve always thought one of the core principles of minimalism is that you shed what you don’t need in order to work less and live more but its taken dropping to the lowest wages in years for me to be motivated enough to actually sort our finances out.

I’m booked in for a financial overhaul with the bank this week to switch us from perpetually skint high earners to mid earners with savings (hopefully).

Which brings me to the serious part of this post. If you’re in debt, go to the bank. Don’t bury your head in the sand, don’t ignore it. Write down everything, and I mean every last penny owed, even to family and go to the bank. If they can’t help (if some debts aren’t with them or your credit rating is already goosed), go to citizens advice. It’ll be far less stressful in the long run.

 

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