Recovery from reckless spending

horseygirl2014 · 13 July 2017 at 11:58AM

Well done for reaching your light bulb moment, and for realising that things have got to change. This is a huge step, and one that i'm sure will make you feel better even if the task ahead looks daunting.
Alcohol will not help your anxiety or depression - speaking from experience. Once it is gone, you dont miss it - or i dont, and it will help stableise your moods (as well as your wallet).

As far as your SOA is concerned, have a look at reducing your mobile bill if you can, its high. (Just seen reply - even a cheaper contract would be better) Also, is your council tax reduced for being single occupancy? May be worth considering (assuming your kids live with your ex-wife)
The other thing i would do, as you rely on sales, rather than a fixed income, is that if you have a good month, put some money into your emergency fund, just to give you a bit of a safety net. normally id say use it to pay off your debts, but if you have a slow month, you dont want to be borrowing money or delaying existing payments.

Good Luck, and keep coming back for support and asking questions. Its much easier with support

EssexHebridean · 13 July 2017 at 12:33PM

You might find the SOA works better for you if you go directly to the link in the "Sticky" post at the top of this board - you've copied and pasted I think?

The stuff others have mentioned stands out to me - yes, Mobile can definitely come down at end of contract, and MIGHT be worth you calling the supplier now to see if they'll shift you onto something a little cheaper. Don;t sign up for another 12 or 24 months to save £10 though - wait it out and go SIM only when the contract's up. That car insurance is horrific - definitely shop around but remember if you pay monthly you may not be able to cancel your existing policy mid year. You say you're sticking aside £60 a month for car maintenance which sounds good and might also let you start saving a lump towards next year's insurance - but where are you saving this as you're showing no cash assets?

I'm going to shout about one thing - Contents insurance - GET IT SORTED OUT NOW if this is not just an oversight!

Presents can come down a bit, and do you really spend £10 a month on getting your hair cut? Similarly clothing - maybe cut back to pants-and-socks-essentials-only for a while.

Your figures actually look OK to me for the most part to allow you to make an impact on those debts. Having said that I'm wary that you've based your income on an average figure - you should really base it on the lowest you're likely to get, budget to live within that, and then throw any extra at the debts in a better month.

If you can money transfer that overdraft onto 0% then so much the better - the revised SOA from the link will mean you can easily fill in interest rates and monthly payments but I bet that level of OD is costing you a bit, no?

SeekingRedemption · 13 July 2017 at 2:04PM

Yeah, I'll follow the sticky at the top and try that, cheers.

To confirm, the £60 for car maintenance is something I'm going to start doing. It's not something I've done prior to this point.

I literally have nothing in my rented flat to insure. A borrowed telly, some books & CDs and that's it!

Take your point about budgeting based on my basic income, but if I did that I'd have to stop paying the mortgage or give up the flat and move in with my parents in order to make the budget work. That'd be drastic, given that my real income is much higher than my basic. Of course, if the worst happens and I suffer a significant drop in income, I'd have to revise my plans.

EssexHebridean · 13 July 2017 at 4:24PM

You have clothes - probably clothes you use for going to work in. You have (potentially) your car keys and all manner of paperwork which would cost to replace. You have utensils for cooking and eating from, probably bedding, towels, maybe a mobile phone, perhaps oddments of stuff the kids might sometimes leave behind. Now imagine finding yourself in the middle of the night, standing outside shivering in nothing but your boxers having had to leave in an instant due to fire.... contents insurance will cost you well under £10 per month - at the instant anything goes wrong, it becomes the worlds worst false economy to NOT have it. Your situation is most certainly not bad enough that this should be any kind of question.

You're going to have to proceed quite cautiously on paying off debt allowing for the way you've worked your income. If it were me I'd find an interest paying savings account and accrue a "lump" of money in there - maybe £500 - £1000 - this can also double as your emergency fund. Continue to pay the minimums to the debts but when you hit your desired target amount saved pay 50% of it to the most appropriate debt - then start building again. otherwise your risk is paying money to a card and then finding yourself short the following month because of that variable income.

SeekingRedemption · 13 July 2017 at 5:58PM

I think you've won me over on the contents insurance. Never really thought about it like that! Will start shopping around.

Yeah, you're right about the income. I'll tread carefully. Should be getting more like £2550 this month, so I'll put £150 into a savings account and keep doing that every month in case I have a dip. I also reckon I could raise £3-400 from selling stuff, so I could keep 1 month's rent set aside in case of a bad month.

In around October there's a possibility that I' be able to move into a friend's vacant properly at a fraction of my current rate, which would suit me down to the ground until my debts are cleared.

I just have to accept that I'm going to be living frugally for however long it takes me to shift the debt. Then I can gently raise my living standards again, but from a new perspective.

It sounds mad, but I know the absolute worst thing that could happen for me right now is for 20 grand to fall into my lap, because that way I'll never learn.

Cheers for taking the time to comment again.

Debtslayer · 13 July 2017 at 9:42PM

SeekingRedemption wrote: »

I think you've won me over on the contents insurance. Never really thought about it like that! Will start shopping around.

Yeah, you're right about the income. I'll tread carefully. Should be getting more like £2550 this month, so I'll put £150 into a savings account and keep doing that every month in case I have a dip. I also reckon I could raise £3-400 from selling stuff, so I could keep 1 month's rent set aside in case of a bad month.

In around October there's a possibility that I' be able to move into a friend's vacant properly at a fraction of my current rate, which would suit me down to the ground until my debts are cleared.

I just have to accept that I'm going to be living frugally for however long it takes me to shift the debt. Then I can gently raise my living standards again, but from a new perspective.

It sounds mad, but I know the absolute worst thing that could happen for me right now is for 20 grand to fall into my lap, because that way I'll never learn.

Cheers for taking the time to comment again.

When shopping around for insurance etc use a cash back site such as Quidco to earn money back :money:

Debtslayer · 13 July 2017 at 9:57PM

SeekingRedemption wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2400
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2400

Monthly Expense Details
Mortgage................................ 435
Secured/HP loan repayments.............. 0
Rent.................................... 550
Management charge (leasehold property).. 0
Council tax............................. 88
Electricity............................. 29
Gas..................................... 29
Oil..................................... 0
Water rates............................. 21
Telephone (land line)................... 0
Mobile phone............................ 59 - wow this is huge, change to sim only as soon as you can
TV Licence.............................. 12
Satellite/Cable TV...................... 45 - does this include internet & phone?
Internet Services....................... 0
Groceries etc. ......................... 120
Clothing................................ 20
Petrol/diesel........................... 100
Road tax................................ 14
Car Insurance........................... 113 - wow I think you'll be able to drastically reduce this when current insurance ends. Look at using a cash back site to earn money back
Car maintenance (including MOT).........60 - have you checked previous bills to achieve this figure?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 8.60
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 - this can be purchased very cheaply, again look at using cash back site
Life assurance ......................... 23.44 - this seems really high, what does it include?
Other insurance......................... 0
Presents (birthday, christmas etc)......40 - this seems high, would you be able to cut in half?
Haircuts................................ 10 - is it really £10 per month? How often do you get it cut?
Entertainment........................... 0 - try to cut back in other areas to input a figure here for the kids
Holiday................................. 0
Emergency fund.......................... 0
Charity................................. 0
Adobe................................... 0
Total monthly expenses.................. 1777.04

Assets
Cash.................................... 0
House value (Gross)..................... 135000 (shared with ex-wife so really £70k)
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ £74000

Mortgage - £84000 (again, shared with wife so 42k)

Unsecured Debts
Description....................Debt
TSB Loan .....................14225
Overdraft......................2060 (although likely to be nearer to £3k by end of month) what's the interest?
Barclays CC...................515 - what is the interest rate?
TSB CC..........................1595 - what is the interest rate?

Total unsecured debts..........£18395

Monthly Budget Summary
Total monthly income....................2400
Expenses (including HP & secured debts). 1778
Available for debt repayments........... 622
Monthly UNsecured debt repayments....... 330
Amount left after debt repayments....... 292 - do you really have this left each month? Start to try and build up a small emergency fund if you can with some of this

Personal Balance Sheet Summary
Total assets (things you own)........... 74k
Total HP & Secured debt................. - 42k
Total Unsecured debt.................... - 18.3k
Net Assets.............................. £13.7k

I hope that's not to difficult to understand for a first attempt! For groceries and entertainment I've put what I'm planning to pay going forward, rather than what I have been paying.

Being recently separated, some items are a bit tricky. To summarise:

- I'm still paying the mortgage and insurance on the house my ex-wife and kids live in, which counts as my 'child support' for the time being
- My ex-wife can't afford to buy me out of the mortgage because she's part-time
- I'm not sure I'll get 50% of the equity anyway (she may get more due to the kids living with her)

Another thing to mention is that I'm a salesman, so my income fluctuates, so I've put down what I get more-or-less on average.

The Barclays card has a limit of £8800, and I can transfer the balance interest free until Oct 2018 (2% fee), so switching the TSB CC and the overdraft onto that might by wise?

Thanks for reading. I'd really welcome any advice.

Hi
Well done facing up to things and wanting a better future. First step is always the hardest, but you can sort this. Keep posting on here and don't be afraid to ask any questions

macman · 14 July 2017 at 9:52PM

Your motor insurance still seems incredibly high. Try putting your wife back on the policy again, it may well reduce the premium unless she has recent claims. Or one of your parents?
I'd echo the comments on contents insurance: at present it's a far higher priority for you than life assurance, surely?
£59 pm on a mobile means a very high end handset. So you can probably sell that for around £400. Buy a basic Android phone for £60, and that's worth 5 month's subs. See out the contract and then switch to SIM only for as little as £7.50pm.
And drop the subscription TV channels-instant saving of £540 p.a.

SeekingRedemption · 14 July 2017 at 10:16PM

Great advice on the phone, cheers. Is it not illegal to put my wife or parents on the insurance to save money? Just would be worried about it invalidating my insurance in the event of a claim.

zippygeorgeandben · 15 July 2017 at 12:14AM

I'd consider starting your own debt free diary too. Not necessarily for others to read but putting down your own thoughts for the day down on screen.
It's also a reminder of your journey and you'll keep looking back at the first post you made in it and thinking how far you've come!

Recovery from reckless spending

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