Passenger in life

Poniesatemymoney wrote: »

What is a statement of affairs please? Complete newbie here

Hi.
http://www.stoozing.com/calculator/soa.php

You need to take time and sit down with all your letters, card statements, bank statements, pay slips, anything you have with your incomings and outgoings detailed on them. A SOA is a detailed report on what money you have coming in, and where it is going to, down to every last penny. A lot of people forget the odd few quid here and there that they spend on the way to work, buying a sandwich and coffee out, popping into a shop for a couple of items. All this needs to be logged.

When you have a clearer picture, post your SOA here and people can look over it and make suggestions about where you might cut down your expenditure so you can throw more at your debt.

This is going to be a big step for you if you have let things slide. The lesson to learn is that you can take control.

Ilona

A statement of affairs (SOA) is a list of all your incomings, outgoings and debts that should help you look at things more clearly. There's a link in the 'Debt Free Wannabe Sticky' post at the top of the channel. Fill it in and upload it here and the lovely people on this forum will be able to give you some advice on what to do next.

On a separate note, I hear ya when you say you feel like a passenger in life. I've felt like this for ages, even since starting my DMP, I've sort of expected things to just happen for me and not really taken as much responsibility of my life as I should have. That all changed when I had a second LBM the other weekend, when I realized I was never going to have the life I wanted or any resemblance of it if I didn't 'do' something more. For me, that something was telling my parents about my debt. I didn't expect them to help, but I needed to know that I'd given them the opportunity to, so that I could know I'd done everything in my power to get out of this awful situation and have the simple things that seemed so out of reach (owning a home, getting married, having children, finding a job I love instead of one that just pays the bills) - all of which is on hold until debts are cleared.

Afterwards, I was amazed at myself for taking the leap and being open with them. They gave me a bit of help, but I think waiting these 4 years and tackling it on my own made them more inclined to do so. They could see I had tried, and cleared more than £10k on my own. Of course, asking parents for help isn't possible for everyone and that's definitely not my advice here, what I'm saying is sometimes taking control and doing SOMETHING, even if it's risky and painful and embarrassing, really helps with the whole passenger feeling.

I hope you're ok today - come back and post an SOA so we can help! xx

Poniesatemymoney wrote: »

Thank you.

I will start with my bank statement I think as everything theoretically is in there (DDs etc) and then I pay for everything else by cc. I hardly ever use cash so hopefully I should have some kind of record of all income/expenditure.

I shall split into fixed and variable costs

I'm a little worried I am going to be judged! I earn a very good salary I just don't know why my expenses are so out of control!

You won't be judged, everyone makes mistakes, but, if your SOA indicates that you are spending on what some people might call frivolous stuff, they will tell you. Such as Sky TV, posh phone on contract, £100 a month on clothes, £100 a week on entertainment.

Budgeting is all about priority, deciding what is important to you. Basically living beyond your means is not sustainable, there have to be cuts made which won't be very nice. But, the sooner you get your priorities in order the better. No use crying and stamping your feet, the reality is that you might need to cut down on some spending to give you cash to pay off your debts.

Cutting down sounds horrendous when you have been enjoying a fun life, but there is no reason why you cannot still have a fun life which doesn't cost so much. Substituting expensive entertainment with free entertainment. Good luck.

Ilona

PS. If you start taking control you won't be a passenger, you will be in the driving seat.

Remember that if you pay interest on a card that also pays you cashback, you negate the point of the cashback - so that might help with your decision.

As said above, the SOA is a vital first step as before you can do anything else you need to get a full picture of where you are financially, and from there, a working budget that you can learn to stick to, and make savings against as time goes on. It will also identify what spare money you should have at the end of each month - and assuming that you don't have that, you can then work to find out where that money is actually going!

You say about using the cards- and that a lot of household expenses are charged against them - beware of setting up recurring payments from cards - ideally stuff should be on Direct Debit/Standing order straight fro your bank account. Once your SOA is in place, and particularly as you say you have a good level of income, you may find it useful to set up a range of different savings accounts that you can budget money into for various things - we have these for holiday costs, car expenses, general household expenses (just £25 a month - which covers the annual cost of contents insurances plus little things like the kettle or the iron going wrong, and expenses that don't quite fit in with groceries like water filter cartridges etc. ) presents, and our entertainment budget as well. This means that when one of the cars needs taxed or insured, the money is already saved and ready - while the insurance might go on a card if there are no extra charges for that, it gets paid off again as soon as the bills arrive.

Personally I'd go through the cards one by one, and first off cut everything bar one up - you don;t need the cards themselves to pay the bills and this will help stop you using them while you're out. Maybe hold onto the one that pays cashback for now as an emergency measure.