Stress over debt please help

Kendowned · 15 June 2017 at 2:17PM

Hello everyone, years of reckless spending on finance and credit cards has caught up with me I'm 25 and prior to 2017 I have either lived in a house share where I haven't had to pay many bills or living with my mum rent free. March 2017 I moved into a rental with my partner and my finances are on a tipping point. I have included a SOV but it didn't really work for my circumstances so I have filled it in a little differently hopefully it still shows my situation.

Me and my partner half all the bills and put money into a joint account to pay them, my partner has a little debt but not on the same scale so it's my finances that need fixing I wouldn't expect her to have to pay towards my debt. What I've done is halved any bills we share to show what I contribute.

With things going as they are I will be in debt for a long time, and I have very little space in the budget for living and being able to go out and enjoy ourselves while the SOA shows a surplus I never seem to have any money spare, its really bringing me down. my partner knows I have debt but not the full extent.

Any advice on becoming debt free would be greatly appreciated.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1256
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1256

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 265
Management charge (leasehold property).. 0
Council tax............................. 49
Electricity............................. 11.5
Gas..................................... 11.5
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 9
Mobile phone............................ 37
TV Licence.............................. 15 (will go down in 3 months have to pay more in the first 6 months of Direct Debit)
Satellite/Cable TV...................... 11
Internet Services....................... 5
Groceries etc. ......................... 125
Clothing................................ 10
Petrol/diesel........................... 120 ( i live 26 miles from where I work, had to move further to live in town partners family lives)
Road tax................................ 0
Car Insurance........................... 27
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 2.5
Life assurance ......................... 5
Other insurance......................... 0
Presents (birthday, Christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 763.5

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Phone on Finance...............773.......34........14.9 ( another stupid purchase my phone i got on contract with ee broke so I went ahead and got the latest phone on finance)
Fiat Car Finance(PCP)..........16298.....241.......6.7 (the 16298 probably makes things looks worse than they are, I don't have to keep the car and pay the final balloon payment. but I do have to keep paying 241 for 4 years (starting Oct 2016) this car was my biggest mistake it costs me too much money. I bought it at a time when I had no plans on moving into a proper renting arrangement.
MBNA Credit card...............2295......25........19 (1400 of this is at 0% for 2 years I had moved a previous card balance to this card but have since spent money on it which is charged at the 19% rate)
Overdraft......................1240......26........19.89 (one of my main issues I'm paying nearly 30 pounds in fees & interest) monthly I pay it off with my wage and by the end I have maxed it out)
TV Finance.....................650.......32........10
Total unsecured debts..........21256.....358.......-

Monthly Budget Summary
Total monthly income.................... 1,256
Expenses (including HP & secured debts). 763.5
Available for debt repayments........... 492.5
Monthly Unsecured debt repayments....... 358
Amount left after debt repayments....... 134.5

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -21,256
Net Assets.............................. -21,256

anna_1977 · 15 June 2017 at 2:43PM

Hi
Welcome to the board.
My only comments are below:
Car - you can hand it back to the garage on a voluntary termination when you are half way through the payments - not half way through the plan but when half of the finance is paid - from what you've said it might be worth it.

Mobile phone - why not sell the handset, I'm assuming it was an Apple iphone direct from Apple (that's their standard APR?) well it, use a cheap old thing and pay some deby off with the proceeds of the sale.

Is TV licence not halved? I'm guessing you're in a contract with sky/virgin tv as only just moved in, if not cancel, your GF might be able to afford it but you can't.

Food is really high is that's halved - £250 for 2 people is a lot!

Lastly, do you really have £134.50 left each month? i'm guessing not, if you do, put it on the debts

You need to talk to your GF really and explain the extent of the debt.

Apple5054 · 15 June 2017 at 3:06PM

Hi kendowned
Firstly I think you should try living frugly by which I mean cutting out things like landline, cable and TV and try reducing the food bill for sure. Stick to simple meals and try to make things last last.
If you decide not to use the TV anymore you could sell it and that will help bring in extra cash. Also maybe sell things you don't use regularly enough or at all.
Maybe ask your landlord to cut a fiver out of your rent for a couple months?
The next 2 tips may sound disgusting but if u need to save then they will help- use water instead of tissue paper in the bathroom and use the 'if it's yellow, let it mellow, if it's brown, flush it down' mantra to help your water bill.
Clearly of you live with your gf you'll have to explain the extent of debt, hopefully she will be able to help.
Hope my advice helps

EssexHebridean · 15 June 2017 at 3:34PM

Welcome to the boards - and rest assured, all is definitely not lost!
It's pretty much unheard of round here for us to see a situation that isn't fixable,
and you sound like you're determined, which is always a great starting point!

First thing I'm going to say is start a spending diary - you'[re a prime candidate for this as you show a surplus but don't actually have it. Any old notebook and pen - and write down everything you spend. that will show you where you're spending on stuff that's not budgeted.

Comments on your SOA in red as usual

Kendowned wrote: »

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1256
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1256

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 265
Management charge (leasehold property).. 0
Council tax............................. 49
Electricity............................. 11.5
Gas..................................... 11.5
Oil..................................... 0
Water rates............................. 20might be worth looking at seeing if you can get the property changed to a meter? suspect it would be cheaper for you.
Telephone (land line)................... 9
Mobile phone............................ 37 Contract, yes? Might be worth trying to haggle down a bit, and as soon as the contract is up, switch to SIM only
TV Licence.............................. 15 (will go down in 3 months have to pay more in the first 6 months of Direct Debit) Have you checked this amount is right? It's usually £24.50 per month or thereabouts, so £12.25 ish for your share?
Satellite/Cable TV...................... 11 Ideally we'd say ditch this but it's not just you, your partner is for consideration too, and you've already said you don't want to impact on her, which I understand)
Internet Services....................... 5
Groceries etc. ......................... 125 This is half? There's a good saving to me made there, and probably an improvement in your diet as a knock-on effect too!
Clothing................................ 10Not at the moment - butcher this back to absolute essentials only - pants and socks!
Petrol/diesel........................... 120 ( i live 26 miles from where I work, had to move further to live in town partners family lives) Read Martin's guide to frugal driving.
Road tax................................ 0 Covered in the finance agreement? Or nothing payable on your particular car?
Car Insurance........................... 27 Do you actually pay this monthly? Have you checked you're getting the best deal you can?
Car maintenance (including MOT)......... 0 Is maintenance included on your finance deal? If not, and with a car on essentially "HP" you MUST factor in maintaining it.

Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 2.5
Life assurance ......................... 5 OK - do you actually need this? You're not a homeowner, and from what you've said have no dependants?
Other insurance......................... 0
Presents (birthday, Christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0 Ought to start stashing something for this ASAP - even getting yourselves to a £300 fund will cover basic unexpected stuff.
Total monthly expenses.................. 763.5

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Phone on Finance...............773.......34........14.9 ( another stupid purchase my phone i got on contract with ee broke so I went ahead and got the latest phone on finance) Yep - silly. But you know that now. You could definitely think about selling it - take it you've already flogged the old broken one for whatever you could get for it?
Fiat Car Finance(PCP)..........16298.....241.......6.7 (the 16298 probably makes things looks worse than they are, I don't have to keep the car and pay the final balloon payment. but I do have to keep paying 241 for 4 years (starting Oct 2016) this car was my biggest mistake it costs me too much money. I bought it at a time when I had no plans on moving into a proper renting arrangement.
MBNA Credit card...............2295......25........19 (1400 of this is at 0% for 2 years I had moved a previous card balance to this card but have since spent money on it which is charged at the 19% rate)
Overdraft......................1240......26........19.89 (one of my main issues I'm paying nearly 30 pounds in fees & interest) monthly I pay it off with my wage and by the end I have maxed it out) To me your priority is to get this sorted urgently.
TV Finance.....................650.......32........10 I'm rolling my eyes here, can you tell?
Total unsecured debts..........21256.....358.......-

Monthly Budget Summary
Total monthly income.................... 1,256
Expenses (including HP & secured debts). 763.5
Available for debt repayments........... 492.5
Monthly Unsecured debt repayments....... 358
Amount left after debt repayments....... 134.5 Right - so the next thing to do is to find out where this is going.

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -21,256
Net Assets.............................. -21,256

what is your actual overdraft limit? Are you exceeding it so getting hit with higher charges?

Groceries look like a big thing for you if that figure is just half - so think about how you can save there. we budget £150 a month for groceries and cleaning materials - the odd toiletry items come from that too - and rarely spend it all. That's lots of fresh fruit and veg, definitely a healthy diet. Most of our meat comes from farmers markets or at the very least is British Higher welfare. Eggs are ONLY free range. Something I've found stops me spending over is that I shop once a week, and meal plan to make sure stuff is used up before it passes its best. write a list and shop to that list. Meal plan first, then check what you actually need to buy. For a few weeks plan your meals around stuff you already have in the fridge, freezer and cupboards. Look to shop in Aldi or Lidl, and scrutinise their Super 6 or Pick of the Week offers ahead of your shopping trip - plan your meals around those items. So if Aldi have Mushrooms on S6, mushroom risotto. If Lidl's PotW products are all salady, grab a couple of tions of tuna as well and do tuna salad. Reduce your amount of meat eaten if you currently eat it every day. Have a look at the "Eat Well for Less" series for inspiration on this.

You need to increase your surplus and also track down where the surplus you SHOULD have is going. You can certainly trim £40 from that food budget - probably a bit more, and if you can also lose the life assurance and trim £5 from that clothes spend at least,that's another £50 to your surplus.

Start doing surveys - there are threads running on the "boost your income" boards about the good ones - you can probably pin down another £20 a month there with determination. This about anything else you can sell.

Sort out the overdraft - check you do have an agreed level in place - if you're over that then ask your bank for a temporary (3 months, maybe) increase in the limit to help out. that might reduce the fees. Either way initially throw all your surplus as it to get it down ASAP - the lower it is, the less fees you'll pay and the more impact that £180 odd a month has.

Kendowned · 15 June 2017 at 4:29PM

Thanks for the quick replies!

anna_1977

Car - It would take about 3 years to be half way though the payments on the car, by then I would only have 12 months left on the contract and I wouldn't want it to hurt my credit rating which I assume it would do.

Phone - selling the phone is something I may have to consider I have the Samsung S8 I did the finance that's on their main website though close brothers. I have a broken S7 that EE wants 250 quid to repair without thinking I just brought the new s8 to replace it.

TV - we pay 22 pounds for sky original bundle, we are on an 18-month contract started in March. To be honest, the sky was a good deal as we got a 100 gift card and I got 125-pound cash back from buying it though a work cashback portal, but that money has been spent now. as for the TV licence, they wanted 25 a month for the first 6 months then it goes down to 12.50, checking it again I put a little more than I'm paying on the SOA.

Food- the 125 includes lunches at work and other products like toiletries and washing powder etc, we want probably bring that down but we are both "bigger" people and probably spend more than we should on food.

GF- she makes less money than me and pairs her fair share of things I don't think it's fair for her to have to pay any more for my mistakes, she is struggling too as she is used to having a fair amount of expendable income, but not in the same sense as she has lots of debts to pay off.

Apple5054

I agree I need to make cuts, I wouldn't cut the landline though as we need it for the internet I don't think I could live without it. plus we are on a 12-month contract with BT. food is one of the places I think we can make real savings but I have issues with food and it's hard to cut down.

- TV is used a lot I don't think I would want to sell it especially since I would likely get a lot less then I am paying for the thing. it was 1000 new and have had it a year and a bit now.

EssexHebridean

I will definitely have to figure out where all my money is going I have tried to work out my expenditures but things are not matching up.

- Water, we are on a meter but the costs are still quite high. the figure included water and sewage.
- Mobile is on the contract until may 2018 I will drop it for a sim only as soon as I can. I'm paying for 2 phones atm with the finance I have on a new phone which adds up to £70!! which is a way too much I don't know what I was thinking.

-TV license, yes you are correct took another look at it that £3ish freed up

-Sky I mentioned earlier I never needed it but we got such a good deal on it. but we have blown the money already

- Petrol, I think I am spending more than 120, to be honest, but it, not sure how to calculate it. I've just used the figures from a journey calculating site. I Did confidence my hours at work so I do a 4 day week which has helped things but that's included in my calculations. I will definitely check out the tips to save fuel

- Road tax, Free for the first year will have to start paying soon (October)

- Car insurance, by far the best I can have. I work for an insurer so I get discounted price may seem higher than average due to having 6 points on my licence: A

- Car maintenance, a car is within its first-year so I haven't really had to do much but I'm sure it will factor in later years, it will need a service in Oct: mad:

- Life insurance, I have a critical illness plan in place through work. it has really good terms and employees are rated on age only. so with my weight, i wouldn't be able to get a plan like this for under £100. I hope I never need it but there are things in my family that have me worried about heart problems.

- Emergency fund, I know I have used my credit card for emergencies but its maxed out now

- Overdraft, this is one of my main issues getting charged so much I never go over my overdraft limit.

What I am going to do when I next get paid so I have a reference point is working out where everything is going. I also will start picking up more overtime when it becomes available to start making big dents into my debt, all your suggestions are great and I start taking them all into account.

Profligate · 15 June 2017 at 5:30PM

Hi Kendowned

Your water charges are high if that is metered water costs- and esp if you are out at work all day..

There is info on the main site re cutting water meter costs - tips include things such as getting a hippo to put in your toilet cistern to reduce amount of water used when you flush the loo, taking quick (non power) showers, not deep baths... definitely worth checking out (and discussing with your partner too in case she enjoys lots of relaxing baths)...

As you have a few high cost items on finance (car, phone, TV) I think you would benefit from getting advice from a debt adviser as to what your options are regarding those items - especially if you are struggling to make the repayments. You can contact Stepchange or National Debtline or Citizens Advice for free, reputable debt advice.

It seems remarkable to me that your take home pay is quite modest but you were able to take out these finance agreements. I'm sorry if this sounds mean or critical - I don't wish to be either but I hope in future you think about affordability over time (given that circumstances do change) , and levels of debt versus levels of income. As even when you were living at home/flat shares and your outgoings were small, your income was still pretty small too. I think what I'm trying to get at, is that you seem to have top-end items but do not have the salary to match. But maybe I'm just an old luddite skinflint who can't believe a TV could cost £1000!

I think you could definitely ring your phone provider and see about getting put on a cheaper tarrif as mentioned by a previous poster - they should be sympathetic if you explain your financial difficulties

Good luck with it all

Profligate · 15 June 2017 at 5:48PM

Perhaps also put your & your partner's income figures into a benefits calculator to see if you may be eligible for any Housing Benefit to help with rent costs, or Working Tax Credit. You could look at Entitled to.com or Turn to Us.

jimbo747 · 15 June 2017 at 6:56PM

A VT won't harm your credit history.

Essentially you're paying £360 a month for your car, Nissan were doing a deal on their top range electric leaf for £199 a month with £199 deposit over 2 years, cheap to service. Would probably suit your commute.

zippygeorgeandben · 15 June 2017 at 7:16PM

Me and my partner pay £200 a month for food and that includes all the toiletries and £50 of cat food. This is from Ocado too. We then only buy milk/bread throughout the month to stop any 'nipping to the shops and spending £20plus on stuff we don't need'
Are you spending money on takeaways as well? just asking. I think you need to sit down with your partner as it's so much easier if you get it off your chest.
Good luck

tori.k · 15 June 2017 at 7:43PM

If you don't have the surplus each month, then really it a SOA in process, so first thing is to find where the £134 is going to, keep a spending diary and all receipts for the next month, you can only control your finances when you know where each penny is hiding, this will take a while until you get the budget that fits your lifestyle. Your then know exactly how much you have spare each month to overpay your debts, that will give you your starting point.

Fosterdog · 15 June 2017 at 7:49PM

You really do need to find out where the extra money is going, keep a spending diary for a month. A little notebook kept with you at all times and write down everything. That coffee from the canteen vending machine at lunch, write it down. The bar of chocolate and pack of chewing gum bought at the garage while getting fuel, write it down. Every penny needs to be accounted for if you want to stand a chance of putting it right. Try to get and keep receipts for everything and once a week go through them to make sure you haven't missed anything. Also a good way to see the reality of what you spend needlessly (we all do or have done it at some time).

Phone EE and see if they will lower your tariff without tying in to a longer contract, get less data that is the one that costs the most and just stick to the bare minimum and use wifi where possible. There are very few places these days that you can't get free wifi.

The water really is very high, I'm in one of the most expensive parts of the country for water. Our standing charges comes to more than most of the country spend even with usage and even with daily showers (2 adults), washing up, washing clothes, cooking, watering the garden, washing car and occasionally four visiting teenagers to add to the load we still never spent more than £32 a month, usually around £27.

Food as already said do a meal plan, only buy what you need and stick to it. Will certainly improve your health too. Also try the brand drop challenge so instead of buying the big names drop down to shops own or somewhere in between. Use places like home Bargains for cleaning supplies, loo roll and kitchen roll. Much cheaper than supermarkets. Take a lunch to work instead of buying out.

Once you can get on top of the missing money and cut back in a few other places it won't take you long to clear your overdraft. Then you can chip away at the credit card. Once that is done things won't seem so bad and will be more manageable.

I get that you don't want your girlfriend to have to suffer but it won't do her any favours if you continue to overstretch yourself and end up with debt collectors at the door. Much better to be open and honest about it now, see if she is happy to cut back for a little while for you both to sort your debt out and then have a fresh start.

For all you know she has more debt than you realise and is getting herself in the same state worrying what you will think and only signing up for things to keep you happy.

Stress over debt please help

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