Question about expenditure

[r0bs0n]

Hi all,

This is all very new to me so please be gentle, I feel ashamed enough as it is in the predicament I've got myself into and that I've had to get help to try and fix it but please be gentle haha.

I'll not go into detail as to how I got myself into so much debt, but it got mostly bigger by putting debt on top of debt, paying one with the other and so forth.

The situation now is that I'm living with my parents and I have a couple of questions about expenditure and my yearly review and stuff as my referrer and IP gave me guidelines on spending but I'm concerned.

So I pay £300 a month to my parents which covers most things, my IP have given me around £200 for food but a lot of my food is just bought by my parents, sometimes I get my own sometimes I don't. I said to my referrer and IP that I mostly take my own food to work as I'm attempting to lose weight but they put my meals at work at around £30 a month which I know I'm nowhere near.

My concern is that what do I do with the income that I don't spend? I'm scared that if I save it up and either save it for big things like a car bill or whether I go away for a nice weekend I'll be essentially punished.

It's like my phone bill at the moment is £27 a month but my IP put £40 a month on the proposal as she said it would be accepted under the guidelines, I said I don't know how I feel about that but it's gone through as that so I don't know whether I'd get in any trouble for that?

Any advice would be welcomed.

[Foggy]

First, don't be ashamed. We have all been there and done much the same things getting there.

I don't agree with wholesale manipulation of figures -- but a bit of tweaking here and there can be useful. It is better to account for spending that might reasonably occur, than to find yourself short in the future (prices for everything tend to only travel in one direction!).
Modest savings are allowed by most IP's, some actively encourage it as part of the whole rehab thing. An emergency fund is always useful.
For safety's sake I would put some in the Bank of Matress.

[r0bs0n]

Well I have a really well paid job, and I had a nice life with an ex partner with a nice rented house but I dealt with all finances through my bank, that included all debt as she couldnt manage finance and I was stupid enough to do it all through me rather than a joint bank account or joint loan or anything like that. So when the relationship broke down I had to move back and all the debt created between us was all mine through name which left me with either this option or BR. My IVA hasnt been accepted yet it's gone to the meeting in a week so anxious about that.

I was wondering how I got around the whole extra cash thing, I was thinking of 3rd bank account that I deposit cash in and just use that as a leisure/emergency/anything fund, or is the bank of mattress the only way? Like you say I don't want it to seem like I'm taking the biscuit but that's essentially what I'm doing with the manipulation of figures, I feel guilty for it but I just want a normal life back where I'm not worried about paying for food or fuel or anything like that. I mean as it stands I earn around £1700 a month and my debt payments are £1200 a month, my board to my parents is £300 a month which leaves me £200 for fuel and anything I might need in the month, and it's not a lot when I drive 50 miles a day for work.

[kallis3]

You can always open a separate account account with your bank now or open an account with a different bank (Co-op are usually good as a cashminder account)

[r0bs0n]

So I opened an account with Santander for my wages to go into, as I was told my bank account will be frozen with halifax as my loan and credit card is with halifax too. I've also opened another account with Nationwide, which I'm thinking of depositing spare cash into, but if I did a simple transfer every month from my santander to there would the IP ask to see what's in that bank too? My bills like car tax/insurance etc will come out of santander and my parents rent is cash so not sure if they'd want more evidence of where the money goes or if just seeing what's coming in is enough on a review.

[kallis3]

I don't think you will have a problem - you will just be putting aside payments for your insurance etc.

[r0bs0n]

Thank you for the reassurance. I just wasn't sure how they looked at what you spend your money on, like christmas time everyone likes buying gifts and things like that and I'm sure people on tougher budgets still try and factor in christmas and things. Like I said it's all new to me and I just want to make sure I'm doing the right thing and that my finances aren't controlled by someone other than myself if that makes sense?

[kallis3]

If you have anything left out of your allowances, it is yours to spend as you wish. As to Christmas, I do online surveys and use the vouchers I get to fund presents.

[r0bs0n]

Fair enough, I just wasn’t sure if come review time they’ll be like “you haven’t spent your allowance on food every month so you can pay more” or “your mobile bill has gone down so you can pay us that surplus” or things like that, I don’t know how much they look into your expenditure, I’m with Hanover.

[kallis3]

Next month you might spend more on food or insurance and you might have to do repairs to your car or house.

[r0bs0n]

So if something like the telephone/internet bill was budgeted for £40 a month on the expenditure and then after a year it was managed to be brought down to £20, would the IP then expect the contributions to go up by that £20, or is it not declared and the allowance stays as it is?

[kallis3]

You will do a new I&E and your payments adjusted accordingly at your annual review.

[Foggy]

So if something like the telephone/internet bill was budgeted for £40 a month on the expenditure and then after a year it was managed to be brought down to £20, would the IP then expect the contributions to go up by that £20, or is it not declared and the allowance stays as it is?

It depends on how creative they are with the new I&E. Once the allowances have been agreed they are not inspected with a magnifying glass and only glaring changes are looked at.

[r0bs0n]

Would they question cash withdrawals at all? Say if I left enough in there to cover the direct debits and the withdrew the rest would they question that at all?

[Foggy]

Would they question cash withdrawals at all? Say if I left enough in there to cover the direct debits and the withdrew the rest would they question that at all?

I doubt it. In the early days of my IVA I used to leave enough to cover the DDs etc and withdraw the rest in cash. This I distributed, according to my I&E into envelopes (then progressed to jars) and spent on the various items from there. Later on, as confidence grew, I did the same with the main DD spending left in one cashomnder account and all the rest transferred to a second cashminder account tp spend from. The method or second account was never questioned.