DFW Diary - IsoChick Sorts It Out!

IsoChick

Ho hum, this is the kind of post I agonise over!

First, a little background...

I'm a married 29 year old, no children, living in rural Lancashire. I work in a job I don't completely hate, with a decent salary and pension.

We've been together 10 years and haven't been particularly sensible with money. Oh, we have our moments, but generally we're Fritterers! To say that we have so much debt, we don't have a huge plasma screen tv, designer clothes, brand new kitchen, swanky holidays etc.

We are the people who never have any money, but can't quite work out where it has gone.

Up until a year ago, we had debt, but were generally jogging along, paying off what we could. Then we got hit with a shock. OH's company had messed his car tax up for the last 3 years. We now owed the tax office about £4500. We have had to pay this back at a rate of £400 a month since April 08. It has been taken from OH's wages directly by the tax office. At the time, we hadn't got a letter or anything, but several of our DD's bounced, as the Tax office had just taken the money.

Despite numerous phone calls and letters, we couldn't change the payment amount per month or term that the debt was repaid over. The tax office wanted it all back in the same tax year.

If we hadn't had lots of debt in the first place, we could have just tightened our belts and sucked it up for 12 months. However, we became ostriches and just ignored the problem. Spending more on our CC's, until it got to the point we were putting weekly shopping and fuel on the CC as we had no cash to buy food in the current account.

Then I had my LBM :T

I realised that if we carried on, we would start defaulting payments, running out of credit, getting CCJ's etc. Even when OH's salary gets back to normal, we'll still be in the deep brown, cos we've accumulated so much debt over the last 12 months.

If we carried on, there is no way we can ever afford to have children, as I will never be able to afford to even go on maternity leave, never mind go part time, when a baby arrives.

So, new year, new start.

It is going to be horrible, I suspect, for the first few months. I am probably going to wish I had never had a LBM. But I have to remember that it is all our own fault for not being grown up and responsible, so we have to deal with it.

Phew! Can't decide whether that felt good, or sickening....

Lemon_Tree

well done for making the step of posting on here, have you posted a SOA yet? if not then follow the links at the top of the board and people will be able to assist you. Sometimes the hardest thing is to sit and write the details down, but once you've done that it donesn't have been done again with the same shock factor.

IsoChick

I thought I would also post about what I have done over the last week, since my LBM to get things moving....

• Cancelled Sky completely (we had the full £47 a month package)
• Phoned CCCS and have an appointment with a counsellor booked for next week
• Used a supermarket comparison site to do my weekly shop online (and saved money!)
• Set up a net monitoring service with a view to reducing my broadband and phone package
• Had a week at work where I have only spent £3 (as opposed to about £15)
• Made lunches for me and OH everyday this week
• Caved in and told my mum about our debt (I am 29 and haven't lived at home for 11 years!!)
• Identified where we can save money on insurances when they are due in the next few months

I am going to do an updated SOA tomorrow, as I did do one, but managed to do it wrong! :rolleyes:

SkintMonkey

Hello there

You sound a bit like me - you spend all your money but don't feel you have any actually to show for it. I'm trying to shift the last bit of my debt so like you hoping that this will be the year to do it as we want to start a family etc

Do post your SOA as soon as possible as the feedback you'll get is really constructive and helpful.

I did a scary thing earlier this week and downloaded from my internet banking my whole statement from last year and looked over all the debit - I was so shocked about how much I'd wasted on shop lunches and general rubbish...it was scary to read, but a final kick up the backside for me!!

It's hard and scary, but worth it when you clear the debt and can get on with your lives togeher....

beanielou

Great start & happy shiney new diary.
Look forward to seeing your SOA.

IsoChick

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1279.71
Partners monthly income after tax....... 1513.81

Total monthly income.................... 2793.52

Monthly Expense Details
Mortgage................................ 986.02
Secured loan repayments................. 487.2

Council tax............................. 129
Electricity............................. 30
Gas..................................... 40
Water rates............................. 30.46
Phone/BB/TV Package................... 30
Mobile phone............................ 70
TV Licence.............................. 11.71
Groceries etc. ......................... 200
Clothing................................ 30
Petrol/diesel........................... 30
Road tax................................ 15
Car Insurance........................... 40 due to change March 09
Car maintenance (including MOT)......... 8.15
Medical (prescriptions, dentist etc).... 15
Pet insurance & related costs ................. 50 1 x insurance due to change March 09
Building/Contents insurance..................... 40
Life assurance ......................... 50
Critical illness cover......................... 29
Presents (birthday, christmas etc)...... 10
Haircuts................................ 15
Entertainment........................... 10
Holiday................................. 0 I wish!
Emergency fund.......................... 25
Total monthly expenses.................. 2381.54

Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 235000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 205000...(986.02)...0
Secured Debt.................. 17000....(487.2)....4
Total secured & HP debts...... 222000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
MINT...........................2052......39........0 can't remember APR atm
EGG Card.......................6000......101.5.....0
Lloyds TSB.....................11146.....260.......29
Tesco..........................2600......50........7.9
Virgin.........................5211......190.......34
Barclaycard....................2115......144.......0 can't remember APR atm
Total unsecured debts..........29124.....784.5.....-

Monthly Budget Summary
Total monthly income.................... 2,793.52
Expenses (including HP & secured debts). 2,381.54
Available for debt repayments........... 411.98
Monthly UNsecured debt repayments....... 784.5
Amount short for making debt repayments. -372.52
Personal Balance Sheet Summary
Total assets (things you own)........... 235,000
Total HP & Secured debt................. -222,000
Total Unsecured debt.................... -29,124
Net Assets.............................. -16,124
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

I'm currently doing some shuffling around of the credit cards, to get rid of as much on the Virgin and LLoyds TSB cards as possible, as they have the highest rates. I've also got my car insurance and one of the pet insurances due to change in March this year. We've got rid of Sky and taken up one of the BT Vision packages, which is cheaper than our Broadband was with them!

OH's salary should increase by about £300 from April onwards (due to tax office mistake a few years ago), so we will be in a much better position.

I'm spending much more time on the OS boards, and doing the Grocery and NSD challenges as well

I'm feeling a lot more in control of stuff now than I was a month ago...

RedDino308

Hi ISO

Didn't want to read and run so here are a few things that jump out at me.

Mobile Phone - £70 a month is high. Can your batter them down or switch tariffs?

Car Insurance - Really £480 a year? That is extortionate - try some of the comparison sites and get this down?

Buildings & Contents - Again £480 a year. I'm guessing this is with your mortgage provider. Have a look at getting a better deal on this.

Also, good luck with the shifting cards around. It might be worth checking your credit rating and applying for a 0% deal somewhere.

Good luck

RD308

Damita

Just about to say about the mobile phone bill, maybe cut down on food..

Agree with RedDino about the car insurance and building and content, I pay £10 a month for a two bed house.

IsoChick

Thanks Damita and Red Dino...

The phone cost is for 2 contract mobile phones... that includes calls, texts and WAP services every month, so I suppose that's £35 a month

I've been doing car insurance quotes etc and think that I can renew for about £30 a month

Same with the home insurance - I think I can get it for about £25

The silly thing is that previously I would have just gone with the same company to stop the hassle of changing policies etc, regardless of the cost.

The food thing - £200 is a budgeted amount, as that includes lunches for work for both of us. We're struggling to stay under that at the moment (hence me joining the OS Grocery Challenge and getting some good tips!)

IsoChick

Got paid yesterday, and was amazed to note that before all the DD's started coming out, we were much further out of our overdraft that we have been in about 4 years!!

We have a £2500 overdraft, and usually when we get paid, we end up with about £500 credit actually in the account. This month, we were almost £1000 in credit!!! :eek:

Of course, the the mortgage, loan payments, npower etc started coming out, but that's ok, as it we've got the funds to pay for them!

Also got notice that a balance transfer has gone through - taking £2000 of my MBNA card at a stupid rate, it's gone to another card on a 7% LOB rate - still not ideal, but much better!