Everything is possible if you try!

Tea&Kittens · 7 September 2017 at 2:57PM

Hi all
Newbie to the forum here. I'm ready to hold my hand up and say "yes, I have a debt problem". I'm also ready to do what I can to climb out of this debt-hole! (Hence the positive title!)

So, a little bit about me - I live with my teenage daughter (who I shall refer to from here on as Kitty) and two real-life floofs who constantly demand food and attention.

I've been dithering around in denial for [STRIKE]months[/STRIKE] years, while slowly but surely the debt pile has accumulated. I was doing a really great job of ignoring this, until a few months ago, when I found myself doing the weekly shop on the credit card ("just to tide me over until pay day"), letting things creep up and up, and not repaying those little credit card payments which grew and grew, meaning that month on month just paying off the interest I wasn't getting anywhere.

I took a long look at what I was spending and where. Admittedly I've been lazier than I should have been with regard to my finances, so I hadn't really bothered to shop around for energy, broadband, car insurance etc deals. I've started to rectify this, and have found cheaper car insurance, energy and broadband. I've also started my little black book for recording moneys in and out, and renewal dates for such things (and discovered that uswitch will save reminders on these too

)

I found this forum a couple of days ago, and your stories have inspired me to feel I'm not too old to get ouf of debt before I retire, and my debts, while a large looming cloud at the moment, should be manageable with some serious organisation.
I've been having to take a lot of self-care lately, due to health reasons, but looking after finances so I'm not so anxious will be part of that.

So, this is the beginning of my diary, and journey. Constructive comments and helpful tips are welcomed, but please be gentle with me, as I'm new to this.

I do have a question for you all - I'm not currently on any DMP or anything. I spoke to a debt management company on the phone, and they recommended an IVA. For some reason the thought of this made me lose nearly a nights sleep and wake several times with severe anxiety chest pains! Hence, I'm trying being accountable to myself, and being open here I think will help, it seems an encouraging group.

Current level of debt:
Barclaycard: £15,000
HSBC Credit Card: £3,000
MBNA Credit Card: £2,400
Overdraft (this gets maxed out every month without fail): £350

beanielou · 7 September 2017 at 3:41PM

Welcome to DFW.
We are a lovely bunch on here

Keep posting!

littlemissbudgetqueen · 7 September 2017 at 4:04PM

Good luck with everything. You have made a start in the right direction

Tea&Kittens · 7 September 2017 at 4:19PM

Thanks for the encouragement! I'm working on the best way of tracking spending to make sure I capture where the "disappearing" money goes. I have an idea where, though I think I'm only going to do this by being extra-vigilant and writing everything down. Doing the budget plan says I have around £200 I'm sure I never see!
My mantra shall be "If I spend it I shall log it" until the practice is firmly ingrained in me!

anna_1977 · 7 September 2017 at 4:28PM

Welcome! I would suggest filling in an Statement of Affairs (SOA) that is pinned at the top of the Debt-free-Wannabe board. The very kind people on here will then be able to advise you on where you can cut monthly costs

Good luck

Tea&Kittens · 7 September 2017 at 5:20PM

The SoA is on my todo list for this evening

Hiddenidenity · 7 September 2017 at 5:46PM

Hello and welcome

I agree do the SOA, you've made the hardest step and that's admitting you're in debt and you need to sort it.

The only way is up now

There will be bumps in the road but there is light at the end of the tunnel.

Good luck

x

Tea&Kittens · 7 September 2017 at 10:30PM

OK, so here's SoA:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2155
Partners monthly income after tax....... 0
Benefits................................ 80
Other income............................ 150
Total monthly income.................... 2385

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 650
Management charge (leasehold property).. 0
Council tax............................. 97
Electricity............................. 50
Gas..................................... 90
Oil..................................... 0
Water rates............................. 47.9
Telephone (land line)................... 0
Mobile phone............................ 36
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 29.99
Groceries etc. ......................... 240
Clothing................................ 40
Petrol/diesel........................... 90
Road tax................................ 21
Car Insurance........................... 34.9
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 0
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 11
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 35
Entertainment........................... 93
Holiday................................. 0
Emergency fund.......................... 0
One-offs/luxuries....................... 40
Cats.................................... 35
Netflix/Amazon Prime.................... 12.48
Take outs/eating out.................... 63
Work Snacks/lunches..................... 24
Total monthly expenses.................. 1842.39

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................14382.....323.......17.18 (First 8k of this is 0% interest until June 2018)
HSBC...........................2932......74........17.9
MBNA...........................2400......25........0
Total unsecured debts..........19714.....422.......-

Monthly Budget Summary
Total monthly income.................... 2,385
Expenses (including HP & secured debts). 1,842.39
Available for debt repayments........... 542.61
Monthly UNsecured debt repayments....... 422
Amount left after debt repayments....... 120.61

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,714
Net Assets.............................. -18,714

Created using the SOA calculator at stoozing
Reproduced on Moneysavingexpert with permission, using other browser.

Forgot to add in the overdraft: £350

In all honesty I feel a little embarrassed posting this, as clearly my issues are to do with living beyond my means and overspending rather than not earning enough to cover necessities.
That said, this is where I am now, and I want to improve. For me this is more than just money. i also want to declutter and tidy my house (for some reason I'm convinced this will help my brain and finances also be tidy ...)
Some items are pretty obvious... entertainments/going out strikes me as something which can be reduced. Also that I need to e.g. curb spending on snacky lunch things, and just get up a little earlier in the morning to make lunch. Cutting out takeouts is also on the agenda. One of the reasons I find both of these difficult is ongoing health concerns which really wipe me out.
Often when I get back from work I can barely stand, and even the thought of making a cup of tea is too much, so making dinner is right out and on those days I end up sending Kitty over the road for a takeout.
I'm open to any other advice!

zippygeorgeandben · 7 September 2017 at 11:17PM

Don't feel embarrassed at all. People don't judge here they provide insight. It's up to you if you take it on board. Or not.
I think you know where you are spending too much money. One adult and one child in the house and you spend £240. Me and my partner spend £180 and that includes £40 on the cat so you can make a saving right there.
The fact that you've realised you need to sort it out is a positive one!

anna_1977 · 8 September 2017 at 8:46AM

Tea&Kittens wrote: »

OK, so here's SoA:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2155
Partners monthly income after tax....... 0
Benefits................................ 80
Other income............................ 150
Total monthly income.................... 2385

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 650
Management charge (leasehold property).. 0
Council tax............................. 97 do you pay this over 10 months or 12?
Electricity............................. 50combined with Gas this seems VERY high, I am in a large(ish) 4 bed with 3 people and only pay £88 a month for both
Gas..................................... 90
Oil..................................... 0
Water rates............................. 47.9
Telephone (land line)................... 0
Mobile phone............................ 36
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 29.99
Groceries etc. ......................... 240again seems high for 2 people, could you maybe reduce to £200?
Clothing................................ 40
Petrol/diesel........................... 90
Road tax................................ 21
Car Insurance........................... 34.9
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 0
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 11
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 there should be something in here, especially as you have a child
Haircuts................................ 35do you really spend over £400 a year?
Entertainment........................... 93
Holiday................................. 0
Emergency fund.......................... 0
One-offs/luxuries....................... 40
Cats.................................... 35
Netflix/Amazon Prime.................... 12.48
Take outs/eating out.................... 63
Work Snacks/lunches..................... 24
Total monthly expenses.................. 1842.39

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................14382.....323.......17.18 (First 8k of this is 0% interest until June 2018)
HSBC...........................2932......74........17.9
MBNA...........................2400......25........0
Total unsecured debts..........19714.....422.......-

Monthly Budget Summary
Total monthly income.................... 2,385
Expenses (including HP & secured debts). 1,842.39
Available for debt repayments........... 542.61
Monthly UNsecured debt repayments....... 422
Amount left after debt repayments....... 120.61

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,714
Net Assets.............................. -18,714

!

Don't feel embarrassed at all (you should see my SOA!)

I have added comments in red. I know you said you've staered to shop about for deals but the Gas/Elec is a glaringly obvious one for me to be reduced.

When switching any utility, or doing any shopping try to use Qudico or TopCashBack to earn some extra money.

Good luck

Anna

Tea&Kittens · 8 September 2017 at 9:46AM

Thanks for taking a look Anna. In response to your items commented in red:
Council tax is over 10 months.

Combined electric and gas is £138, but I'm expecting this to come down as I've not been on top of it and have let estimated bills go through for some time. A real reading this week has shown that my actual usage is way below the estimate, so I've left it at the higher amount until I get a better feel for how much I'm actually using (and I'll be making sure I send in real readings too).

Food I know is high. I know I can get this down doing proper meal plans and going to Aldi instead of Sainsbys. This tends to creep up when I'm not feeling well as I buy things which are easy when I can't manage cooking. I will be making a definite effort to not let this creep happen this time though.

I agree, there definitely should be something in saving for birthdays/christmas. This is where some of the putting things on credit cards has come from, due to spending everything every month instead of being conscientious and saving.

Haircuts - £35 was how much my last one cost, but I don't go every month. Probably 3 - 4 times a year, so that figure is higher than it should be.

Action plan:
Make meal plan before doing the "big shop" at the weekend
Set up separate account for birthday etc fund.
Send in accurate energy readings every month

If I'm going to pay more than the minimum amount on any card, would you suggest
A: More on the Barclaycard (highest amount of debt) to bring down nearer to the 8k interest free
B: More on the 0% interest MBNA as it's the lowest to clear the debt off
C: A better option?

Everything is possible if you try!

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