machsmum Debt-Free Diary

machsmum · 4 July 2007 at 10:36AM

Hello

I have been following many posters debt diaries for some time now and figured that as I had only just had my LBM last month, I should start my own. Hopefully it will keep me motivated and encourage me to keep going with it as the months drag on….

Here is a bit about my background and how we became to be in debt:

My husband and I have been together for about 9 years and married for 4. We have two children who are 3 and 1. We have always had credit cards and like most people some months the balances were higher than others but we could always pay them off either in full or in a couple of months.
The problems really started, as I'm sure is the same for a lot of people, when I stopped working full-time after having our first child. Things were ok for a while as I was lucky to take voluntary redundancy as soon as my 6 months maternity leave ended and had a payout of approx £6500. This lulled us into a false sense of security that we could continue living as though we were both still bringing in an income. Of course this soon ran out, what with getting married, moving house and having the baby in a space of 9 months!!
I did begin working part time but unfortunately after losing a baby only 7 months after having my daughter I became depressed and needed some time out for a while. I have since started working part time again, and had another baby, but we just seemed to be treading water all the time.

About a year ago I decided to take charge of the situation and really try to clear some of the debts. We worked out all our I & E and saw that we had around £375 a month that we could pay off our CC debts each month. (The min payments came to around £180.) But, like idiots we were both still using them occasionally, for non-essential items.

So whilst it hasn’t increased in the last year it’s not gone down either. Our current CC debt stands at approx £11k plus we have 2 Egg loans, totalling around £14K.

I’m not sure the reason but last month I truly had my LBM. I WANT TO GET THIS SORTED THIS TIME!!!!! And so this is where we are at now. Only just starting out but hoping beyond hope to get this CC debt cleared within 3 years and then we will put that money towards clearing our loans which currently are due to end in July 2012.

Sorry for the long ramble, hope you are still awake. I will keep you updated with our progress

If you can bare to listen to me again!!!

smudgemanc26 · 4 July 2007 at 10:49AM

Hello & Welcome :hello:

Well your in the right place if you ever need help, advice or just a little bit of motivation from time to time to help clear your debt and get you debt free.

Have you posted your SOA (statement of affairs) before if you want to do this i have posted the link below you never know we might be able to help you save some money and put this towards your debt.

http://forums.moneysavingexpert.com/showthread.html?t=107280

Theres also a snowball calculator you can use that will show you what cards to pay off and give you your debt free date, this might be worth looking at too. Sorry but i dont know the link but im sure someone will be along shortly who can help.

Congratulations on having your LBM this is the start of doing something about your debt.

Jen x

machsmum · 4 July 2007 at 10:53AM

Here is a copy of our SOA. If anybody has any suggestions please feel free to to say!! Thanks

Monthly Incomings:

My salary - £224.46 (Although this is temp job & could end in next few weeks)
Partners salary - £1811.00
Child Benefit/CTC- £184.00

Total - £2219.46

Monthly Outgoings:

Mortgage/Rent - £515
Council Tax - £117
Gas - £29.50
Electric - £36.00
TV License - £11.37
Sky £15.00
Phone - £16.00
Food - £230 (Includes nappies, household products etc)
Car Insurance - £59.75 (Paid annually – This is for two cars)
Petrol - £30
Life Insurance £11.36 (Paid Annually)
Water - £24.00
Broadband - £9.99
Mobile - £20.00 (This is a cashback offer where every 3 months I claim this back)
Home Insurance - £15.18
Magazine Subs - £3.00 (Last payment due in July then will be canx)
Daughter Dancing - £15.16
Swimming Lessons - £12.18
OH Allowance - £50.00
Egg Loan 1 - £149.60
Egg Loan 2 - £132.10
Debt Repayments - £650.00 (This is split between all o/s CC - with highest APR pd most, all others min. payment.) (Our min. payments on CC total around £190)

Total: £2152.19

Difference £67.27 (This is to cover misc. items such as kids haircuts every couple of months, presents, going out (I wish!!) etc – things that don’t crop up every month!)

Debts::eek:

Abbey CC - £5027 APR 17.48%
Barclaycard 1 - £1079 APR 15.8 %
Barclaycard 2 - £2478 APR 6.9% (life of bal)
MBNA CC - £963 APR 0% (ends Nov 07)
Tesco CC - £812 APR 17.47% (This card was used to pay for OH work expenses which he claimed back each month and was normally paid in full – has crept up due to starting new job and needing our 2nd car to be back OTR.)
Egg Loan 1 - £7726 APR 6.73%
Egg Loan 2 - £6565 APR 7.66%
Adams SC - £8 APR 30.9%
Next Directory - £139 APR 26.49%
DP SC - £89 APR 29.9%
TopShop SC - £20 APR 19.8%
New Look SC - £157 APR 25.9%
Egg Card - £557 APR 17.9%

I think that is just about it!!

machsmum · 4 July 2007 at 11:04AM

I have been snowballing as though my life depended on it over the last few days, and we are hoping that we can pay off our credit cards in 19 months. :j

This is due to OH starting a new job which should allow us to increase our monthly debt repayments on the CC from £375 a month, which is what we were paying up until June to an incredible £650!!!

We have also been ebaying like crazy and so far have made an incredible £428 - and that is after fees and p&p!!

Can't wait for that to clear so that we can pay off a chunk of our debt.

Over the weekend we also somehow managed to pull enough money together to pay off all our (sorry MY) store cards, which came to £414.00. Its amazing to think that before my LBM we would probably just carried on paying little bits here and there and never making any progress. So over the course of a week we have eradicated all the horrendous APR's, which frankly were obscene.

OH and I have been discussing our money situation quite a bit over the last few days, which is something we never did before, and I really feel as though it is bringing us closer, which is an unexpected bonus of all this. We are hoping to clear all the CC by Xmas 2008. Which may be a bit optimistic but I think its the push we need. And I am possibly the most competitve person in the world so I would really hate to fail in that!!!:rotfl:

Any way had better be going for now,got to collect DD from nursery.

smudgemanc26 · 4 July 2007 at 11:10AM

Well a couple of things stand out to me which are:

Electric - Can u see if this can be provided any cheaper have you checked u switch?

Sky - £15
Phone - £16.00
Broadband - £9.99 - Can you see if you can get the deal of Sky for all 3 for £26 or how about virgin media they do a deal with all 3 too, might be worth just checking.

Life Insurance - £11.36 - Is this a month? If not i have just changed mine and got it for about £6 did this through quidco so i could earn money back.

Think thats about it really but have you tried looking on the old style board to get recipes for meals you can freeze and keep it might help reduce your food bill and also going to cheaper shops for household essentials and toiletries rather than the supermarket?

machsmum · 4 July 2007 at 9:18PM

Hi smudgemanc26, thanks for your usefull comment.

I have recently switched back to BG for my elec & gas from EDF as they were cheaper, but I will definitely look again. My elec has in fact just come down from £45.50 a month. If I switch through greasypalm I would get cashback too! :T

We can't get cable in our area unfortunately, although virgin do provide our broadband and calls. Just pay BT for the line rental. We did try switching to Sky for their all-inclusive package about 10months ago, but frankly they were useless, :mad: they stalled for three months to connect our broadband and in
the end we went with someone else, as OH works from home alot and we couldn't be without it any longer. So a bit wary about attempting to go with them again. We have talked about canx our Sky tv tho, as we think we may be able to rec freeview through our sky box. Does anyone know how you go about doing this?? We haven't got the right aeriel to rec it through that alone.

The life insurance is paid annually, and is £136.30 for the year. I haven't looked into getting it cheaper as its fixed at the price for the next 25 years - guarenteed not to increase. Again bit wary that if we change it it may shoot up one year. Is this likely to happen????

We currently buy most of our tolietries and household bits and bobs from Wilko's (although I have included the cost in our food budget.) Is there anywhere else that sells this sort of stuff cheaper? We rarely buy big-brands, tend to stick to shop brands as I am doubtful that expensive brands actually do a better job! Maybe I am just tight tho!!

machsmum · 5 July 2007 at 10:10AM

Well we have decided that we are going to attempt to reclaim our back/CC charges after all. I originally requested all the bank statements from Abbey a few months ago (we have three acc with them) but as only two of the ac had any charges and they only came to about £240 all together we decided not to pursue it. Mainly out of being wimps if I’m honest!! We had read that getting money out of abbey is like blood out of a stone and didn’t want to rock the boat as we also owe them about £5k on a CC and our mortgage is with them. But decided at the weekend, if they start being funny we will just bank elsewhere. If we switch to A&L through greasy palm will get £50 into the bargain as well.

There is also about another £130 which we are reclaiming from 5 different CC: some old and some current. With these we just thought what have we got to lose? If they say no then at least we tried. We are hoping though that as they are such small amounts, between £25-£40, they will just offer to settle, minus the interest we requested. So fingers crossed. I think this just shows the complete attitude change we have had in the last coup, of weeks. Before we just thought, oh it’s not worth it, but now we just want to get as much money together as we can to try and reduce our debts.

Got a load more stuff to list on eBay tonight, to end week Sunday, so hopefully that will bring a bit more money in. Also waiting for my cheque from Greasy palm which is due this week, £26.35, and my first cash back cheque from my Mobile contract, that’s another £60. Also got another £77 ish due from Greasy palm next month and I have been doing as much overtime this week as I can possibly fit in. Normally only do 7 hours a week, but will have done around 23 hours this week by Saturday. So that will be another extra £120 in next weeks pay. YAH!!! :money: Total extra to pay off CC's this week £634!!

machsmum · 5 July 2007 at 4:11PM

Have just spent last two hours listing another 20 + items on ebay!! Have got SQUARE EYES!!! Lets hope they make a bit of money, hey!! OH also got load of stuff to list tonight. Its all we seem to do lately!! Oh well, thats the DFW life I suppose.
Will update on how we got on when they end week Sunday.....

machsmum · 5 July 2007 at 10:11PM

One of my items has been bid on already!! WOOOOHOOOOO!!!! At least I knwo one thing will sell. Fingers crossed for all the rest!!!!

bobbie78 · 6 July 2007 at 2:04AM

hi machsmum, welcome to the throng.

About your freeview question I know there is a way where sky leave the dish and you use that as the reciever, it is called freesat, you'll have to search the forums for more info - or ask sky as I don't have it but I know others have mentioned it before. Keep up the good work, and head on over to the old style board for ways to reduce the food budget.

momisa · 6 July 2007 at 3:19AM

machsmum wrote: »

The life insurance is paid annually, and is £136.30 for the year. I haven't looked into getting it cheaper as its fixed at the price for the next 25 years - guarenteed not to increase. Again bit wary that if we change it it may shoot up one year. Is this likely to happen????

Hi and welcome machsmum
You're doing a great job!! :j

I just wanted to mention something about life insurance. I tend to review mine everytime I change my mortgage. Mine covers me for life and critical illness in the one policy. I learned a few years ago that the criteria tends to change regularly for the illness side of things. For example, if I'm diagnosed with cancer my policy pays out in full even if I survive.

With all the loans and CCs you have I'm wondering if you have taken the payment protenction from each of them. If so, see if you can cancel it. It's more cost effective to have a separate policy to cover yourselves for redundancy or long term ill health.

HTH

machsmum Debt-Free Diary

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