Midnight's Debt Mountain

Midnight_Sky_2

Hi everyone, some of you may remember that I started my own debt diary some months ago and, to be honest, I was doing really well at facing up to the debt and controlling my spending, and I was beginning to feel that things were starting to go right. Sadly however, I had a few nasty set backs along the way and, to cut a long story short, I fell off the DFW wagon! Within a few weeks our spending habits had started to spiral out of control again and the debts were beginning to take second place again.

To be honest I thought I had had my LBM back in April, but as it turned out it was just a tiny flicker – the real LBM came when we came very close to losing not only the house but basically everything we’ve worked so hard for. It gave us the shake we needed and now my OH is totally on board, which I don’t think he truly was before.

We sat down and looked at all the figures and it makes pretty dire reading to be honest. Our total debt including mortgage (which I’ve decided to include), and a £45k secured loan, amounts to £171K which means between us we have an unsecured debt of £61k. I did a snowball calculator and the shocking news is it will take us until August 2016 to clear off absolutely everything we owe. Seeing it in black and white made me feel physically sick! Still reeling from the shock of the amount we owe and the length of time it’s going to take to pay back we even toyed with the idea of bankruptcy, but for us that’s not an option at this time – we got ourselves into this mess and I think it’s only fair that we have a good bash at trying to get out of it before we go down the BR route.

So, the plan is simple - increase our income (I’ve managed to get a second job which will help greatly). Although it’s tough because of the amount of hours I have to put in, it has to be done. OH is finding it difficult to take on an another job because of the amount of hours he already works, but we plan to look into that at a later stage. Then we need to cut our spending to the bone, grow as much of our own vegetables and fruit as we can (next year), slash our food costs with the help of some serious menu planning, ebay absolutely everything that’s not nailed down, car boot sales, mystery shops, cash-back sites, etc, etc…basically anything and everything that will bring in a few extra pounds.

We’ve already decided that, because OH is in a really stressful job - added to which his working pattern can be unpredictable, I will be the one taking the responsibility for making sure the bills are paid and at the same time making sure we’re chipping away at the debt.

However, for me to stay focussed and on track I really need to keep a diary again – the last time I got so much help, advice and support from all you lovely DFW’s, that I don’t honestly think I can do this without you all…so I hope you don’t mind me joining in again –this time I’m in for the long haul, so I’ll be about quite a bit for the next few years……..

I’ve posted my SOA. I think it’s quite tight, but no doubt you eagle eyed folks will spot something.




SOA

OH income £1500.00
My income £900.00
My 2nd income £600.00 (Max – varies depending on hours worked)
Total £3000.00

Mortgage £596.00
Gas and Elec £110.00
C. Tax £194.00 (Live in Scotland)
Car (MOT/Ins/Tax) £80.00
TV Licence £11.29
Phone/Broadband/TV £25.00
OH Mobile £15.00
My mobile £15.00
Life Assurances £39.80
Dog Food etc £35.00 (Two puppies so still quite costly, but will come down!)
Pet Insurance £ (Don’t have ins yet but will have to be taken into account)
Dog Training Classes £24.00 (Won’t last forever, but essential in the meantime)
Debt £1521.00
Total £2666.09


Which leaves £333.91 to cover everything else – food (for three adults and Sunday visit from DS and his family), petrol, entertainment, holidays (what’s a holiday by the way?), birthdays, Christmas, dental treatment, emergencies etc, etc, etc,……

Although it looks not too bad now, up until very recently - before I started my 2nd job - we were running at a constant loss, with the result we’ve fallen behind on a lot (in fact all) of our debts, so our first priority is to get that back on track – especially the secured debt. Luckily we’ve been granted extra time to do this, but I really have to make a supreme effort with this within the next six months or I can see them reneging on the deal.

Basically, just looking at my SOA, I can already see that we still need to bring in more money, which is where the ebaying, mystery shopping, etc is going to come in.

So, over to you…any suggestions and constructive criticism is more than welcome.
Sorry, this has been such a long, rambling post (this is the short version, honest!). Really looking forward to joining everyone on the journey to financial freedom and, more than anything, I’m looking forward to conquering our own personal debt mountain!!

Midnight x

poorandindenial

Hi Midnight

Well done for coming back and sorry that things got so crazy for you, all that aside it sounds like you are making fantastic headway, what does your second job do to your debt free date?

My constructive criticism is to not break yourself, you DO need to work hard at this but not at the expense of your sanity, make sure you don't over do it and burn yourself out and don't be too hard on yourself if things go a bit wrong from time to time, just get back on it as soon as possible.

Here are a few thoughts on your SOA:

Mortgage £596.00
Gas and Elec £110.00 - is this per month or per quarter?
C. Tax £194.00 (Live in Scotland) - is this per month too?? it is more than twice mine (one bed flat with single person discount in London)
Car (MOT/Ins/Tax) £80.00
TV Licence £11.29
Phone/Broadband/TV £25.00
OH Mobile £15.00
My mobile £15.00
Life Assurances £39.80 - have you checked on moneysupermarket and if you can get a better deal switch through quidco for the cashback
Dog Food etc £35.00 (Two puppies so still quite costly, but will come down!) - yup, this has GOT to come down
Pet Insurance £ (Don’t have ins yet but will have to be taken into account)
Dog Training Classes £24.00 (Won’t last forever, but essential in the meantime) - how long is this going to go on for?
Debt £1521.00
Total £2666.09

You might want to check out the calculator on www.makesenseofcards.com to see if you have missed anything, you say you have £333.91 to spend on quite a few things (groceries, petrol etc) but you should really try to quantify what they each are so that you can work out a sensible budget for each and then track how well you are doing against each one, otherwise you may either find yourself with no money when you need it or you might end up continuing to run at a deficit

Midnight_Sky_2

Hi Poorandindenial, thanks for your reply and helpful suggestions...

Unfortunately second job doesn't really do anything for the debt free date - it just means that we can now meet the payments that we've been missing due to not having enough money. But hopefully once we start clearing a few of the debts we should have a clearer idea of a more realistic debt free date.

Gas and Elec - Yes, this is per month, but looking at others SOA's - I'm certainly going to look at trying to reduce this.

C. Tax - also per month - but living in Scotland our water charges are included - still horrendous though!

Life Assurance - will check this out and get through Quidco

Dog Food - Yes indeed!!!! I'll have this reduced quite a bit by next month. Had to start them off on fancy food provided by the vet, but they are much stronger now and they'll be getting put on a cheaper alternative as soon as possible.

Dog Training Classes - Goes on until November so should be £24 a month better off by then.

Midnight_Sky_2

Just been having a look through the DFW forum and someone mentioned keeping a spending diary, so I've been on http://spendingdiary.com and I've made a resolution to fill it in every night.

Get paid from 2nd job on Friday - Some of it will go towards the debts but £200 of it will have to go to the solicitor's bill which came to £606.00, although I have already paid £200 up front. (I panicked when we got a court summons from our secured debt lender, and hired a solicitor to help us sort it out - which he did, so I don't mind paying him - just can't believe the amount for such a tiny bit of work!!)

I'm hoping for at least 8 NSD next month. I'll sort out my signature soon.

*zippy*

Midnight :hello: Don't know if you remember me, but I used to post on your old diary, think we were the only late birds on here then

I'm in a similar situation hun, fell off the wagon, had a huge wake up call a few weeks ago and have had to go and get a second job and even considering a third just to get the debt down to a manageble level again. The good news is though we have done it before so we know we can do it, its just keeping motivated really to see it until the end. I'm like you in that once everything was looking better I relaxed and started spending again.

Good luck with your diary hun, looking forward to reading it.

Midnight_Sky_2

Hi Zippy!! Great to chat with you again! Although now I have a second job I'm not such a late bird these days!! I know exactly what you mean about relaxing and starting to spend again, although with me it was more of a denial thing (backside in the air and head in the sand again). Be careful you don't overdo it hun, three jobs sounds like a nightmare!

Well, it was quiet at work today, so I started to think of simple ways I could throw some extra money at one of the small, niggling bills (you know the ones that seem to have been around forever - probably due to the horrendous interest rate I'm paying!). Anyway, I just emptied my purse and bag of all the small change lurking in there, and I got £6.90 - tomorrow I'm going to go into the bank and just pay it towards a debt. If I can do this a couple of times a month then I could be paying an extra £10 a month off a debt. Not much, I know, but every little helps, right?

Anyway, I'm off for an early night - I'm working tomorrow and at my second job at night so I have to try to catch an extra couple of zzzzz's when I can.

Night Night!

sparky0107

Hi midnight sky,
Does the secured debt have PPI added, if so can you cancel this and start a reclaim against the loan company, see the loans dicussion thread on the loans forum. Don't beat yourself up for falling off the DFW wagon, I think a lot of people have done it, just the fact that you know what you need to do is great.

Welcome back

Lula-Hula

Hello & welcome back to the jungle :rolleyes:

Well done for admitting you fell of the DFW wagon & you're certainly not alone ( see sig below ) & brilliant that you realised it before it was too late & that you're determined to tackle it.

I wish you the best of luck on your journey & how lucky are we all that this site exists

lula x

esbo

Did I read thar correctly, you have a monthly debt 2.5 times your mortgage? How much do you owe?
[edit] - Sorry I didn't read the first bit of your post where you explained the figures. I guess I was just surprised it was so much, I don't want to sound critical though, afterall it is only money, there are things a lot more important than that. Eight years is not that long really, I mean a typical mortage is 25 years.

I was reading about how unsecured loans can be converted into secured loans in some circumstance so they are not as 'unsucured' as they seem, but I guess you have no equity onto which to secure them anyway.

Regarding the budget, do you really need 2 mobile phones? I mean I have never had one so it seems a bit of a luxery to me. I mean I guess most of the time when you are out side the house you will either be at work (where you can usually use a phone) or maybe driving there and back, where you shouldn't be using it anyway!!). Also they are not even pay as you go (you must make a lot of calls!).

Another thing is, do you need a landline if you have 2 'contract' mobiles? If I had such a mobile I think I would cancel my landline and use the 'mobile' from home. Mine you I don't use my phone much, most of the calls I get are from market researches and the like :rotfl:, well at least they were untill I went on the TPS which bans them (supposedly!). So there is £30 you could save if you dropped the mobiles
or maybe about £7 if you dropped the land line (I pay about £18 for my BB with NTL and I have Freeview for TV which has more channels than I could ever watch).

Finally, I am not sure how bankruptcy works but if it would get rid of all your debts it does not sound like a bad idea to me. I suppose you would then lose the house but then you would have £2,200 to spend on rent?!!
(I probably do not understand what bankruptcy means though).
Also it seems like your dogs have a better diet than me
Not sure what the life assurance is for, there are no shops in heaven :rotfl:
And what are the dogs training to be? Solicitors? :rotfl:
Hope that doesn't sound mean, only joking, surely you can read how to train a dog on the net? We never trainied our dog and he never complained, apart from eating the odd shoe occasionally :rotfl::rotfl::rotfl:

Personally I have never gone into debt (apart from the mortgage) since I had to beg my bank manager for the fare home from Uni, I learnt my lesson then, if you want it, save for it, you will be able to buy more in the long run.

Anyway best of luck, the best things in life cost nowt.

Midnight_Sky_2

Hi everyone, just finished my second job and I'm chilling with a cup of tea and a choccy bicky (this is the last of the choccy bicky's - next week it will be value Rich Tea :rolleyes: )


Sparky0107 :hello:- nice to meet you. Thanks for your comments. Actually now I come to think of it, the secured debt does have PPI added - it was a condition of getting the loan that we took the PPI (which, even at the time, I thought was pretty steep). I'll dig out the paperwork whenever I get a chance and go over it with a fine toothcomb! Thanks for pointing that out! I'll let you know how I get on. Look forward to chatting with you!


Lula Hula :hello: - welcome to my diary! and thanks for your lovely comments! I'm really glad to be back here, the help and support I've had on this site is just unbelievable. I know this will be a long and difficult journey and, knowing me, I'll need the support of all you fab people just to keep me on the straight and narrow (and that's a full time job, I can tell you!!!0. This time, I'm determined to get these blasted debts sorted out once and for all! So looking forward to sharing my trials and tribulations with you!


Esbo :hello: - Hello and welcome. Thanks for your very honest and staight talking comments - (that's what I need, believe me). To answer your questions:

do you really need 2 mobile phones? - OH needs his phone for work and £15 is really good for the contract he's on. On the other hand, I really don't use my mobile much - so I'm going to cancel it and go on Pay as You Go (by doing this I could get it down to £5 a month - and let people phone me instead of wasting my money )


do you need a landline if you have 2 'contract' mobiles? Mmm, I'll have a word with OH about this and see what can be done.


it seems like your dogs have a better diet than me - I know exactly what you mean, they're better looked after than I am , I've just changed their food today for a much, much cheaper brand (but it's the one that most vet's recommend anyway, so I'm not at all worried about it). This will reduce the monthly cost to about £20. So, already a saving of £15 a month :T


And what are the dogs training to be? Solicitors? :rotfl: :rotfl: :rotfl: Aw, thanks for that Esbo - this made me laugh out loud when I read it! To be honest it would probably be easier to train them to become solicitors than to become obedience dogs!! I could train them at home, but they need to be socialised with other dogs so I'm going to keep this up just now, but it is something that I intend to look at in a couple of months.



Well, quite a productive couple of days. I got paid from my second job yesterday and paid a couple of bills so I'm still on track. I'm just about to go into my budget planner to see what I need to pay and where I can get extra money from if need be. I've had a NSD so far, but I'll have to do some shopping later on, but I'm only taking £20 in my purse and a SHOPPING LIST!!!, so I won't be tempted to buy things I don't need.

I'll update my signature when I remember how to do it. I'm working again tonight, so I'm going to catch forty winks before I hit Asda's.

Hope everyone has a great day!

MrsPorridge

Midnight - just popped in to say "hi". I'm relatively new on here, but like you had a big shock when I finally did face up to my debt. I had been reading these boards on and off for over a year before I finally faced up to my debt problems and overspending.

Like you, I think I'm here for years. I haven't done a snowball calculation as I'm too scared. However, I am now planning meals (and indeed today which was my big monthly shop I have spent £33 less than last month), so something is working.

I am doing the payment a day challenge which is great to chip away at those debts. It doesn't sound very much just paying off around £1 per day but it certainly does add up. That old saying "take care of the pennies and the pounds will take care of themselves" has certainly rung true with me these few weeks.