The Harrys debt-free diary

the_harrys

Having done our finances properly for the first in months, I have realised that our "cheap" holiday in Spain last month actually cost over £3000 taking us to a total of over £25,000 unsecured debt.

I've lurked on and off meaning to start doing something about this for ages, but that's it now: my debt-free journey officially starts here!

I think it will take 2 years, a very long time to stay motivated. I've been really inspired reading other people's DF diaries, so thought I'd start my own.

Have spent most of today doing Martin's money makeover, quite successful so far, but realised I missed out on £62 that Quidco would have paid me to switch to Scottish Power as I did it direct with ScP a couple of weeks ago aargh!

Will post more details later, DD and OH just returned from walking dog.

Keeping_Positive

Welcome to the board. I find loads of help and support on here Im sure you will to do.

GeorgeUK

Welcome aboard.

If you post up a statement of affairs (SOA) we may be able tosee some areas in which to make savings from your current expenditure. Also, have you looked into possibly getting a 0% creditcard such as the virgin money card so that you are paying less interest?

http://www.makesenseofcards.com/soacalc.html

the_harrys

Thanks for the welcomes. I've already got an MBNA card so I don't think I can get Virgin (same "family" I think). The MBNA debt reverts to ??% from 0% next month so have applied for an HSBC card, I'm a bit worried whather I'll get one, with the credit crunch (and my level of debt) but have never missed a payment.

I'll get together all my numbers and post an SOA shortly: I know all our fixed outgoings but haven't added up stuff like food, petrol etc yet: August was probably a bad month because of the school holidays. After my money makeover today, I hope we are in good shape for gas/elec/ phone.

My next big decision is the car. It is 5 years old, done 85K and I've already spent £600 on repairs this year and now it's started making a slightly rattly engine noise and the power steering also makes a noise when on full lock: it feels like it is going to get expensive!

I get a car allowance as part of my salary, so it is very tempting to sell the car, use the (probably) £5500 I get towards the debts and get a shiny new company car, but this would reduce my income by £360 a month. Mmmm, what would Martin do...?

the_harrys

Two surprising things I noticed when examining my MBNA cc statements properly for the first time in ages:

The minimum payment MBNA ask for on my balance of £12000+ is £10: is this legal? I thought they had to collect 2% or something like that. On that basis my great-grandchildren would still be paying it off!

MBNA charged me £0.11 interest per month on my 0% card (can't remember why, I think I had to use it once or something) for the first few months but it went up to £1.00 in May : a ten-fold increase! Seems very dodgy, I wonder how many 90p's they have pocketed without anyone noticing/ agreeing to this change.

George: just read your posts and wanted to add my support: it must be hard to have this extra challenge, but there seem to be a lot of supportive people on these boards and you and I have around the same debt to clear so I'll be keeping an eye on your progress!

Keeping positive: how long term is "long term" in your club?

GeorgeUK

Thanks TH

You will see in some peoples signatures a debt free date listed (DFD). This can vary between a year for new members and over 30 years. It all depends on the level of debt and what options you have available to deal with it.
Alot of people use the snowball calculator to work this out.

You may have been getting a reduced interest rate during the promotion period of the card. With virgin i know you pay the lesser amount of interest + £5 or £25, so the minimum payment for you would be £25 during the promotion. After this, your payments would increase substantially.

Some people have both a virgin and mbna card, but if you are unsure, it may be best to look at the options available from this site. I don't know of any other that restrict the minimum in this way so you may want to work out what you can afford.

Keeping_Positive

Hi

The longhaulers doesnt have a set time from what I know but I would say 2 years+ because having to keep on the straight and narrow for that length of time is a different challenge to a shortish burst. We tend to have ups and downs but the idea is to keep going even when we mess up (hopefuly not too much).

Have a gander at some of the posts and feel free to ask for a number from In Search Of Me.

Ref the budget I find its the variable things like food, haircuts, car costs that can be hard to work out. I am lucky to have a company car (no choice in the job) and I love that fact that I dont have any expenses creep up on me for it like when I burst the tyre on hols. Free roadside cover and replacment tyre.

the_harrys

I have now done my SOA , as far as I can identify things.
At least I know that I can cut back on meals out and clothes for a start:

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 2308 (will go down to 1950 if I get the company car)
Partners monthly income after tax....... 3720
Benefits................................ 175 (child ben)
Other income............................ 0
Total monthly income.................... 6203

Monthly Expense Details
Mortgage................................ 1177
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 234
Electricity............................. 72
Gas..................................... 175
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 33
Mobile phone............................ 20
TV Licence.............................. 11
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 578
Clothing................................ 312
Petrol/diesel........................... 250
Road tax................................ 30
Car Insurance........................... 55
Car maintenance (including MOT)......... 105
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 200
Other child related expenses............ 193
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 25
Buildings insurance..................... 62
Contents insurance...................... 0
Life assurance ......................... 15
Other insurance......................... 28
Presents (birthday, christmas etc)...... 210
Haircuts................................ 56
Entertainment........................... 209
Holiday................................. 250
Emergency fund.......................... 50
Total monthly expenses.................. 4410

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

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(1177).....0
Total secured debts........... 0.........-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Amex...........................1800......0.........4.9
Egg............................8045......167.......0
MBNA...........................12345.....10........0
Overdraft......................1800......0.........17.9
Carloan........................1138......379.......5.8
Total unsecured debts..........25128.....556.......-

Monthly Budget Summary
Total monthly income.................... 6,203
Expenses (including secured debts)....... 4,410
Available for debt repayments........... 1,793
Monthly UNsecured debt repayments....... 556
Surplus(deficit if negative)............ 1,237

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -25,128
Net Assets.............................. -25,128

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========

e.g. the number of adults & children in the household, the number

of cars included in the SOA or anything else that may be useful.

GeorgeUK

Council tax............................. 234
If paying over 10 months, can you ask to pay it over 12?

Electricity............................. 72
Gas..................................... 175
This is huge!! Did you change both electricity and gas providers?

Mobile phone............................ 20
PAYG?

Telephone (land line)................... 33
Satellite/Cable TV...................... 0
Internet Services....................... 0
Are these combined or do you not have internet at home?

Groceries etc. ......................... 578
How many is this for? You should be able to cut this down with meal plans and sticking to your shopping list. Have you tried moving down a brand (shops own)? Have a look at the oldstyle board for ideas.

Clothing................................ 312
Every month? You should be able to half this without too much difficulty until you are out of debt.

From the surplus you have, you should definately be able to do this in 2 years. Hopefully you will be able to get other 0% cards to transfer the debt to, but if not, try using your existing cards if you can get one with a nil balance. You may be offerred an incentive to keep the card open and then be able to transfer some of the higher APR debt.

I suggest you keep a spending diary so that you can see exactly where your money is going and possibly stop some extra unnecessary spending.

the_harrys

GeorgeUK wrote: »

Council tax............................. 234
If paying over 10 months, can you ask to pay it over 12? Will try

Electricity............................. 72
Gas..................................... 175
This is huge!! Did you change both electricity and gas providers? Massively underpaid last Winter as first winter in our new (well actually old and draughty) house. Nearly cleared now and have applied to switch to Scottish Power fixed until Oct 2009

Mobile phone............................ 20
PAYG? Yes

Telephone (land line)................... 33
Satellite/Cable TV...................... 0
Internet Services....................... 0
Are these combined or do you not have internet at home? I work from home so work pays for broadband

Groceries etc. ......................... 578
How many is this for? You should be able to cut this down with meal plans and sticking to your shopping list. Have you tried moving down a brand (shops own)? Have a look at the oldstyle board for ideas.
This is 5 of us, 2 adults, 3 kids, one dog and various furry animals. Have just made apple crumble with apples from our tree for first time ever: feeling very virtuous!

Clothing................................ 312
Every month? You should be able to half this without too much difficulty until you are out of debt. New target is £100 per month, but spent over £100 on 3 school shoes


I suggest you keep a spending diary so that you can see exactly where your money is going and possibly stop some extra unnecessary spending.

Have put up sheet of paper on kitchen noticeboard to record all spending by me and OH. He just came in with a loaf for £2 :eek: followed by some quick re-training from me!

One day down, 729 to go :rotfl:

GeorgeUK

spent over £100 on 3 school shoes

Sorry but that made me laugh - there is such a thing as taking money saving too far you know. 1 shoe each? :rotfl: