Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • wordswords
    • By wordswords 21st Nov 16, 1:40 PM
    • 21Posts
    • 29Thanks
    wordswords
    Getting Debt-Free despite Struggling with MH problems
    • #1
    • 21st Nov 16, 1:40 PM
    Getting Debt-Free despite Struggling with MH problems 21st Nov 16 at 1:40 PM
    I have quite a lot of debt:

    £7000 ''normal' debt' - paying this off at £335 / month
    £6000 'debt to a family member' (no interest on this one, and can perhaps vary the payments a bit' - paying this off at £50 / month
    £127000 'mortgage debt' - paying this off at £600 / month - not really significant to me at the moment, my mortgage is coming up for renewal though so I have to work on my credit rating.

    The good thing is my income is quite high at the moment - I work as a software engineer and I have a lodger. However I struggle with mental health problems so I am prone to overspending sometimes. The debt I am currently paying off was accumulated over a year when I just bought loads of stuff I didn't need because I was depressed. I also have a partner who I support, although she is very money conscious and actually saves me money in the long run by cooking and preparing packed lunches for work.

    Income:

    ~£3000 / month

    Loans:

    £85 / month - ends in March - a loan I took out for the bathroom refurb we urgently needed when I bought the house
    £145 / month - ends in 3 years - my main loan that I'm paying off
    £100 / month - ends in 12 months - a loan I took out to pay off my overdraft, it is a high interest loan so I want to be paying this off soon. I had £1000 in overdraft money and this loan will actually save me money in the long run so long as I don't go back into my overdraft, because I will avoid paying ridiculous Santander overdraft fees.
    £50 / month - sending money back to my mum because she helped me with my house deposit.
    Last edited by wordswords; 19-02-2017 at 8:39 PM.
Page 1
    • wordswords
    • By wordswords 21st Nov 16, 11:22 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    • #2
    • 21st Nov 16, 11:22 PM
    • #2
    • 21st Nov 16, 11:22 PM
    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 3
    Number of children in household......... 0
    Number of cars owned.................... 0

    Monthly Income Details

    Monthly income after tax................ 2900
    Partners monthly income after tax....... 200
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 3100


    Monthly Expense Details

    Mortgage................................ 600
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 80
    Electricity............................. 40
    Gas..................................... 40
    Oil..................................... 0
    Water rates............................. 40
    Telephone (land line)................... 0
    Mobile phone............................ 30
    TV Licence.............................. 12
    Satellite/Cable TV...................... 0
    Internet Services....................... 43
    Groceries etc. ......................... 700
    Clothing................................ 50
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 150
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 12
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 50
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 150
    Haircuts................................ 15
    Entertainment........................... 50
    Holiday................................. 0
    Emergency fund.......................... 30
    Total monthly expenses.................. 2092



    Assets

    Cash.................................... 0
    House value (Gross)..................... 150000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 150000



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 127000...(600)......3
    Total secured & HP debts...... 127000....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Main loan......................5000......145.......6 I think
    Bathroom loan..................500.......100.......10
    Overdraft loan.................1000......100.......30
    Total unsecured debts..........6500......345.......-



    Monthly Budget Summary

    Total monthly income.................... 3,100
    Expenses (including HP & secured debts). 2,092
    Available for debt repayments........... 1,008
    Monthly UNsecured debt repayments....... 345
    Amount left after debt repayments....... 663


    Personal Balance Sheet Summary
    Total assets (things you own)........... 150,000
    Total HP & Secured debt................. -127,000
    Total Unsecured debt.................... -6,500
    Net Assets.............................. 16,500
    Last edited by wordswords; 21-11-2016 at 11:32 PM.
    • wordswords
    • By wordswords 21st Nov 16, 11:32 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    • #3
    • 21st Nov 16, 11:32 PM
    • #3
    • 21st Nov 16, 11:32 PM
    So in theory.. we should have quite a bit of surplus cash to address our debt problems.

    I tend to spend quite a bit a month on things for myself, I tell myself it is to stop me becoming too depressed and to reward myself for working a job I hate. I guess this is a familiar story to some. I spend from 150-250 on myself each month (!). I am really into music, and this goes into building up my studio with music equipment. Sometimes this feels too much but other times it doesn't feel enough.. basically it boils down to how much of a bad month I'm having and what I feel like I need to do to compensate.

    The rest of the money seems to go on things that just come up. Rail trips to see my parents or friends, things that need to be bought for the house, we are having some redecorating and painting done at the moment, some of which we are doing ourselves, so that adds up.

    RISKS

    These are the things that worry me:

    1) I get fired from my job, made redundant or it becomes totally untenable and I quit. This could happen. I am in a bit of a precarious position at the moment but my employer is a secure public sector organisation and so far this hasn't been an issue but I'm always worried about it. I am in IT so hopefully the future is fairly secure for finding another role.

    2) My lodger leaves. He is contributing 370 to the income. I would have to get someone to replace him. He has mentioned that he is not really happy living in the area but has no plans to leave anytime soon. This means I have to do up the house a bit as it's in quite a state of disrepair. If he leaves I would have to find another lodger and I want that to happen sooner rather than later so I'm trying to make the place attractive.
    Last edited by wordswords; 21-11-2016 at 11:34 PM.
    • wordswords
    • By wordswords 2nd Dec 16, 2:11 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    • #4
    • 2nd Dec 16, 2:11 PM
    • #4
    • 2nd Dec 16, 2:11 PM
    So some good news..

    1) My mum unexpectedly came into some money, and she gave me £1000 towards clearing my debts.

    I have used the £1000 thusly so far:

    £30 - paying off remaining phone device plan
    £100 - paying off Santander overdraft completely
    £266 - paying off enough of my First Direct overdraft to get me into the £250 'interest free' overdraft, so I won't be charged £5/month and can use that extra overdraft money in an emergency if I have to.

    That leaves me about £600, of which I am planning to put £500 to totally pay off my bathroom refurb loan which will save me £85 a month.

    2) I also was given a job offer this month for something which I would technically rather do than my existing job, but on quite a bit lower pay. I think some kudos is due that I said 'no' to that job offer, even though I don't like my current job and think it would be better, mainly because I want to pay my debts off more quickly. It took quite a bit of resolve and I'm proud of myself for making that decision.

    3) We have also done some painting around the house and it looks much better. We still have to sort out the living room, study and the lodger's room, but overall it looks a much more pleasant place to live, and if my lodger did choose to move out then it is more likely we would find someone to replace him.
    Last edited by wordswords; 02-12-2016 at 2:20 PM.
    • wordswords
    • By wordswords 2nd Dec 16, 2:46 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    • #5
    • 2nd Dec 16, 2:46 PM
    • #5
    • 2nd Dec 16, 2:46 PM
    I have been monitoring my credit rating with Equifax, Experian and Noodle. I now have a 'good' credit rating on Experian, although that service doesn't include peer to peer lending companies such as ratesetter which I currently have two of my loans with. With noodle I have a generally average credit score, and I have an average credit score with Equifax.

    Goal: By the time I renew my mortgage in August next year, get my credit rating to 'good' so I am eligable for the best remortgage deals.
    • Bobarella
    • By Bobarella 2nd Dec 16, 10:32 PM
    • 10,568 Posts
    • 69,015 Thanks
    Bobarella
    • #6
    • 2nd Dec 16, 10:32 PM
    • #6
    • 2nd Dec 16, 10:32 PM
    Loads of good news there Wordsworth.
    " Your vibe attracts your tribe"

    Debt neutral 27/03/17 from £40k in the hole 2012.
    Roadkill 17 £56.58 2016-£62.28 2015- £84.20)
    RYSAW17 £1900 2016 £2,535.16 2015 £1027.20
    • wordswords
    • By wordswords 21st Jan 17, 10:01 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    • #7
    • 21st Jan 17, 10:01 PM
    • #7
    • 21st Jan 17, 10:01 PM
    Thanks Boberella.

    Updates:

    I'm trying to get as much as possible in scheduled payments that go out of my account within a week of being paid.

    Current total income: 2939
    Current total scheduled monthly outgoings: 1793

    That includes:

    Dinner and packed lunch money for us both for a month: 208
    Mortgage with 5% overpayment - 600
    Personal Loan payment - 145 (about 3 years left)
    Overdraft Loan payment (10 months left) - 100
    Syth Loan payment (I bought a music instrument off a friend, 4 months left) - 60

    With the 1145 that is left over from my scheduled payments I have three main funds:

    200 - Taxi money fund - that is £10 per working day to get to work
    200 - House money fund - general expenses and new household items that are not covered by the weekly shop
    200 - Personal money - money to spend myself on myself.
    60 - Emergency fund money saving account

    That leaves 485 left for any unexpected suprises.

    Since my last update:

    * I have joined the gym at the end of my road which is 4 minutes walk away. This works out at 19.99 a month for unlimited gym, which I think is quite good. This has helped my stress levels at work and has given me a lot more mental stability. I can go from 9pm-10pm each night, which is great because it's mostly empty then.

    * I have started selling off items that I don't need. For example I have a work phone so I'm selling off my personal phone. With my music stuff also the idea is to sell old equipment that I don't use before buying new equipment. Synthesizers don't deprecate too much so this is a good way of upgrading and trying out new gear without spending too much.

    * I have been walking to the tram stop more in the mornings, which means I don't need to get a taxi to work in the mornings, which saves £10 each time. The number of times I do this will increase as the weather gets better and I get fitter and have more energy from going to the gym.

    * I have been drinking less. Before, I wasn't a heavy drinker anyway - I wasn't drinking more than the NHS's recommended weekly limit at all. But now we just have one drink on Friday and / or Saturday night while at home. We try and keep it to one, although over the festive period this went up by quite a lot. However I'm aiming now for just one per night maximum - this is sociable and relaxing but doesn't make me start worrying / getting anxious and have a hangover next morning.

    Goals

    Overpay on the musical equipment loan to get that out of the way. Then I can direct that £60 a month to paying off the overdraft loan before the end of the year.
    • Bobarella
    • By Bobarella 21st Jan 17, 10:20 PM
    • 10,568 Posts
    • 69,015 Thanks
    Bobarella
    • #8
    • 21st Jan 17, 10:20 PM
    • #8
    • 21st Jan 17, 10:20 PM
    You are doing extremely well. Great update.
    " Your vibe attracts your tribe"

    Debt neutral 27/03/17 from £40k in the hole 2012.
    Roadkill 17 £56.58 2016-£62.28 2015- £84.20)
    RYSAW17 £1900 2016 £2,535.16 2015 £1027.20
    • wordswords
    • By wordswords 19th Feb 17, 8:51 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    • #9
    • 19th Feb 17, 8:51 PM
    • #9
    • 19th Feb 17, 8:51 PM
    Updates:

    * I am part-way through a remortgage process, which should fix my mortgage for 5 years, and save me £80 / month over my current 2-year fixed deal. So this is good. Out of that, I am reducing the rent of my lodger (and freind) by £25 / month, as he has financial problems too. I also am choosing to opt in for some life assurance/critical illness cover, which will probably cost £50/month (I didn't have this before). So I annoyingly I don't actually save much, but at least my mortgage will be fixed for 5 years, considering brexit.

    * I have transferred my web hosting for my blog to a much cheaper provider. It works out as 17.50 cheaper a month, so that's a 'win'.

    * I took out another credit agreement, a small one, but this will go towards a pair of festival tickets and transport for said festival, that we are going to in July. That means I will be paying an additional £60/month until July, which is quite bad but I think it will be worth it.

    Current Credit Agreement Repayment Projections (unless I pay off early)

    So, current credit agreements/arrangements:

    £60 / month - Until July - Festival Tickets
    £60 / month - Until July - Synthesizer loan from a friend
    £145 / month - Until Jan 2020 - Long term loan
    £85 / month - Until March (!) - Bathroom loan
    £100 / month - Until November - Paying off my overdraft loan
    £50 / month - Until.. a long time.. - Repay parents for lending me money for a housing deposit

    = £500 / month going out to debt repayments (!)

    until..

    April 2017 when it will be £415 / month

    until..

    August 2017 when it will be £295 / month

    until..

    December 2017 when it will be £195 / month

    --

    Must try to not take on any more credit agreements!!
    • Bobarella
    • By Bobarella 19th Feb 17, 10:26 PM
    • 10,568 Posts
    • 69,015 Thanks
    Bobarella
    Again some good things there. Kind of you to reduce your friend's rent too.
    " Your vibe attracts your tribe"

    Debt neutral 27/03/17 from £40k in the hole 2012.
    Roadkill 17 £56.58 2016-£62.28 2015- £84.20)
    RYSAW17 £1900 2016 £2,535.16 2015 £1027.20
    • wordswords
    • By wordswords 26th Mar 17, 4:47 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    Thanks Bobarella.

    So.. some good news and bad news.

    The bad news (at least financially) is that after 2 years, the girlfriend and I have decided we don't want a lodger anymore, and want the place to ourselves. So we've give him 6 months notice. That means there is £370 a month from my income that needs to be replaced.

    The good news is that my mum has said that we don't have to pay off any more money to her - my debt to her will be taken out of my future inheritence. Which is very good as it frees up a bit of income now, £50 to be exact.

    The other good news is that I've finally paid off the bathroom monies, so as for next month I will have £85 / month not going out.

    So in total I will have £135 more a month and £370 less if the lodger leaves this month (which he won't). As shown above, if he leaves after July, then I will have £120 more a month, so that makes £255 more a month. So that is just a £125 shortfall. When I get the new mortgage in June my outgoings will reduce from £600 / month to £508 / month.. so in total it will only be £32 less a month difference!

    I think we can make that work The girlfriend has said she wants to find some part-time work by July when she's fully moved over to England, so when that happens income will go up a bit too.

    So yeah, good news mostly. If we really need to financially, we can always get a new lodger too, so we will still have that option if we need it.
    Last edited by wordswords; 26-03-2017 at 5:18 PM.
    • wordswords
    • By wordswords 26th Mar 17, 5:35 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    To expand on the mortgage situation.. it is good news there as we are about to sign up for a 5 year fixed mortgage at about 2%, meaning repayments are £508 / month which is significently down from the £585 / month from our initial 2 year fix! Also it's fixed for a whole 5 years so we will hopefully avoid any housing market / inflation problems surrounding brexit.

    Some really good news is that the mortgage valuation on our house was £170k! So the value of our house has gone from £146,600, which we paid for it in August 2015 to £170,000 in Feb 2017! This is a huge jump and, even though we have done quite a lot of refurbishment, we only paid £5k max in refurb costs, so this is shockingly good, really.

    Our house is about 30 min. bus ride from the center of Manchester, so it's quite a central location. The area is pretty nice (apart from a few problems with youfs) and a new gym has just opened up down the end of the road so I think we got a bargain really.
    • wordswords
    • By wordswords 26th Mar 17, 6:04 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    Summary of my current loan amounts etc:

    £4,376 - personal loan (145 / month) (ends November 2019)
    £683 - overdraft loan (100 / month) (ends November 2017)
    £195 - festival tickets payment plan (65 / month) (ends June 2017)
    £160 - music instrument loan from a friend (58 / month) (ends June 2017)

    = £5,414 total

    --

    Paid off loans

    £1,000 (£85 / month) - Bathroom loan, paid off finally
    £6,500 (£50 / month) - Mum mortgage deposit loan, written off
    • wordswords
    • By wordswords 3rd Apr 17, 5:36 AM
    • 21 Posts
    • 29 Thanks
    wordswords
    Last week I switched my mobile phone contract from £30 / month with O2 to £10 / month with Virgin Mobile, thanks to a deal I found on MSE. Looking to make more savings on regular outgoings this month too.
    • wordswords
    • By wordswords 10th Apr 17, 11:10 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    Another good news / bad news post:

    Good news:

    I will be moving jobs to a new company, assuming my references go through. The new company is going to pay quite a bit more money, which is good, and will have a lot more benefits financially.

    * Base salary - going up from £43,400 to £50,000 a year
    * Bonuses - going up from no bonuses to 3 bonus schemes, expected to pay on average around £7k a year on top of base salary.
    * Healthcare benefits including sickness insurance and private health cover.

    The extra monthly income means that we should be fine not having a lodger, and the bonuses should allow me to make large dents in my debt / accumalate savings.

    Bad news:

    I have just taken 3 weeks holiday at the old job, and because holiday is earned prorata, and the fact that the old job pays half a month in advance, half a month in lieu, combined with the fact that I have no savings, means that I'm going to have to take out an additional loan for £2,500! This is to cover the time between the reduced monthly pay packet of last job, and the new pay packet of new job.

    Still, the increased income means I should be able to pay this off sooner, assuming I don't get fired from my job or anything like that.

    So overall pretty good news! I was pretty sick of my last job anyway and the new company offers much more hope for progression.
    • Warren1989
    • By Warren1989 11th Apr 17, 12:00 AM
    • 11 Posts
    • 2 Thanks
    Warren1989
    Sounds like a positive change! Well done, keep working hard and everything will be grand!
    • Jo Blogs
    • By Jo Blogs 11th Apr 17, 3:46 AM
    • 750 Posts
    • 2,562 Thanks
    Jo Blogs
    You're doing really great wordswords. Keep up the super effort as it will be worth it in the end
    Saved Nitty Gritty £7440.75 [149%] / £5000-[Aug] £58.44 for the 'Save 12k in 2017' #157
    2017 Womble #35 £3463.27 July NSDs 19/15CCCChl 7/12 months
    July PPChl#002 Pts 71
    • wordswords
    • By wordswords 12th Apr 17, 9:38 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    Thanks Warren and Jo. Things do seem to be looking up, which I'm thankful for.
    • wordswords
    • By wordswords 12th Apr 17, 9:53 PM
    • 21 Posts
    • 29 Thanks
    wordswords
    Assuming my references are confirmed with the new job and I start work there, I should be able to cut down on the amount I spent on taxis per month. There is a bus 4 minutes walk away which should take me to work in 37 minutes. At the moment my commute is about 35 minutes, but I have to change between two trams - it's a pain and on both legs of the journey I never really get a chance to get into a book because I have to get up 5 minutes later. Also the tram stop is 10/15 minutes walk away from my house, and I really don't feel like making that walk first thing in the morning in the winter. So the more convenient commute should result in less money wasted on Ubers. At the moment I get an Uber to work every day which is like 8-10 pounds each day (!), so it's a fairly big deal.
    • wordswords
    • By wordswords 9th Jul 17, 12:12 AM
    • 21 Posts
    • 29 Thanks
    wordswords
    So.. I've been having some problems again. I ended up spending more than I should have, and some things came up such as my girlfriend moving over from Germany to the UK (which is really good of course, but costly!), so basically I now owe:

    £3000 extra as part of my loan.
    £2400 extra to my parents

    I feel really bad about this. My repayments are now:

    £200 / month to them to repay parents debt until 12 months
    £160 / month to pay off main loan until years away
    £100 / month until December to pay off

    So that is £460 total in debt repayments per month.

    On the plus side, my remortgage has gone through, so my monthly mortgage outgoings are now £508 / month instead of £600 / month. So that is good. I've just started a new job, and that will give me an extra £130 per month, after adjusting for the income that I have lost because the lodger is no longer living with us.

    +£92 / month
    +£130 / month

    So that is £230 extra per month in additional money.

    My girlfriend is on the verge of getting paid work now she has moved over from Germany, so hopefully she will be able to provide some money to help with living expenses. Once she is working this may reach £370 / month extra, which I will use to pay off debt quicker.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

864Posts Today

7,271Users online

Martin's Twitter
  • Byebye! I'm about to stop work & twitter, to instead spend glorious time with Mrs & mini MSE. Wishing u a lovely summer. See u in 10 days.

  • WARNING Did you start Uni in or after 2012? The interest's rising to 6.1%; yet it doesnt work like you think. See https://t.co/IQ8f0Vyetu RT

  • RT @JanaBeee: @MartinSLewis Boris is the anomaly (coffee), the others are versions of normal (beer). Lots of same candidates = vote share d?

  • Follow Martin