Naarwich's Debt Free Journey

Naarwich

I discovered MSE in late 2008 after seeing Martin's show on Channel 5. Since then, my wife and I have seriously taken a look at our finances in an aim to curtail our spending habits and we've made some serious inroads into starting our journey to Debt Free Heaven!

In order to maintain our focus over the next few months I felt that starting a diary was such a great way of staying on track. Reading other forum members diaries has been inspirational and the support and advice given will truly aid our journey and ensure we maintain focus and keep on track.

So...a bit of history...I'm now 29 (30 shortly arrrgh!) and my wife is already 30. We also have a 3 year old son and live in a lovely 3 bed terrace in Norwich. I work full time and my wife part time in order to help pay the bills and to help look after our son when he’s not in nursery.

Our debts started as soon as I started work. I started on a very low wage in IT (£5500p/a) with the promise of additional money as I gained qualifications. Although low paid, the job offered the route into the career I wanted to follow however it meant moving across to the other side of the country away from my wife (girlfriend at the time). This in turn meant massive petrol bills and my outgoings were far outstripping my incomings. I took on credit cards and loans over the next few years to supplement this gap and we also got married. This all helped to add to the debts.

Although I’ve had these debts for the past 10 years I’ve never defaulted on a payment or really worried too much about paying them off however when adding things up I owe just shy of £30K! I’ve been very good at shifting balances between 0% credit cards, low rate loans however the time has come where I really want to make a dent in my balances rather than just servicing them with minimum payments. The Light Bulb moment for me came in October when I was refused a Virgin 0% Interest card despite in my opinion being a very good creditor for a company to have!

Over the past few months we’ve taken steps to cut down spending and to identify where we can make savings. This has included things like changing supermarkets and what we buy, stopping the spend on unnecessary items etc. We’re now at a reasonably happy point that we’re left with a surplus amount at the end of the month to add towards paying off those debts!

I’ve also been matched betting since November 2008 and that will help massively towards paying off some of my debts. Currently at around £1k of profit and for those not doing it, I can understand your fears, however once you get your head around it and understand the risks involved, it’s a great way of making a significant difference to your debt. I’ve also started the £2 challenge and after a quick hunt round the house have already found £12 so not a bad start!

I still want to live my life though and don’t want to be miserable over the next few years whilst this debt is cleared so I am sure I’ll still be allowing myself a few luxuries however I think the difference will be that we’ll always ask ourselves beforehand whether they are really necessary.

Looking forward to chatting with you all as time progresses!

LittleEmms

Good luck Naarwich - my diary is a god send, I feel giving myself 'To Do's on there makes me do them as I have to report back in - and I like to hope that my fellow readers will tell me off if I become lax....

Warning though - you will get addicted

Welcome to Diary land!!!

Naarwich

LittleEmms wrote: »

Warning though - you will get addicted

- I think I'm there already! I've been lurking for some time now and taking all your good advice and putting it into practice!

catherine_h_2

Hi

Just wanted to say, from one longtime lurker to another, good luck on your journey:D
Also if you wanted to try and cut down your outgoings a little more post your SOA and I'm sure the more experienced MSErs will happily help you cut down your outgoings.

Again good luck and all the best

WorkingHardDFW

I just wanted to say good luck on your DF journey.

Your story sounds very like our own particularly the bits about your LBM moment coming from when you were refused a CC!

My words of wisdom for what they are worth is to budget and keep a spending diary - the two go hand in hand. Unless you know what you are spending your money on you can't be realistic in setting your budgets.

Good luck and keep posting :T

Toni_Broke

Nothing to add except to say welcome and the best of luck with your journey. You sound very focussed and determined.

Tonixx

ragstoricheswannabe

Hiya, welcome to your dfw journey!!!!!! Have you set yourself a date to be debt free??

Good luck with it all,
love rags
xxxxxxxx

Naarwich

ragstoricheswannabe wrote: »

Hiya, welcome to your dfw journey!!!!!! Have you set yourself a date to be debt free??

Good luck with it all,
love rags
xxxxxxxx

Not yet...Need to go through my snowball to get figures for where I'd be if I pay minimums as I am now. Would like to think I'd be in a position to be Debt free by end of 2010 however that's extremely ambitious! Over the next few days/weeks I really hope to get some sort of strategy worked out that both my wife and I am comfortable sticking with. Don't want to put some unacheivable figures so need to put some serious thought into it!

Naarwich

Well this morning I've had a crack at posting up my SOA.

Would appreciate your feedback on it. There are definitely areas where it can be improved such as closing gym membership (as I don't use it!) however I'm tied in until April 2009. The same with my Broadband which I pay way too much for but again we're tied in until July 2009. Your comments would be much appreciated!

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1880
Partners monthly income after tax....... 550
Benefits................................ 165
Other income............................ 0
Total monthly income.................... 2595
Monthly Expense Details
Mortgage................................ 842
Secured loan repayments................. 0
Hire Purchase (HP) repayments........... 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 99
Electricity............................. 47
Gas..................................... 41
Oil..................................... 0
Water rates............................. 41
Telephone (land line)................... 11
Mobile phone............................ 55
TV Licence.............................. 11
Satellite/Cable TV...................... 0
Internet Services....................... 25
Groceries etc. ......................... 240
Clothing................................ 30
Petrol/diesel........................... 90
Road tax................................ 25
Car Insurance........................... 40
Car maintenance (including MOT)......... 35
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 31
Buildings insurance..................... 21
Contents insurance...................... 20
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 20
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Gym Membership.......................... 48.5
Total monthly expenses.................. 2022.5

Assets
Cash.................................... 1000
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 15000
Total Assets............................ 148000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 120000...(842)......6.9
Total secured & HP debts...... 120000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Loan 1.........................21179.....272.......0
Credit Card 1..................7100......110.......15.9
Total unsecured debts..........28279.....382.......-

Monthly Budget Summary
Total monthly income.................... 2,595
Expenses (including HP & secured debts). 2,022.5
Available for debt repayments........... 572.5
Monthly UNsecured debt repayments....... 382
Amount left after debt repayments....... 190.5
Personal Balance Sheet Summary
Total assets (things you own)........... 148,000
Total HP & Secured debt................. -120,000
Total Unsecured debt.................... -28,279
Net Assets.............................. -279
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

Caroline73_2

Naarwich wrote: »

Well this morning I've had a crack at posting up my SOA.

Would appreciate your feedback on it. There are definitely areas where it can be improved such as closing gym membership (as I don't use it!) however I'm tied in until April 2009. The same with my Broadband which I pay way too much for but again we're tied in until July 2009. Your comments would be much appreciated!

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1880
Partners monthly income after tax....... 550
Benefits................................ 165 Check that you can't get a bit more with child benefit/WTC/CTC
Other income............................ 0
Total monthly income.................... 2595
Monthly Expense Details
Mortgage................................ 842
Secured loan repayments................. 0
Hire Purchase (HP) repayments........... 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 99
Electricity............................. 47
Gas..................................... 41
Oil..................................... 0
Water rates............................. 41 are you on a meter - this is quite high
Telephone (land line)................... 11
Mobile phone............................ 55 assume this is for2 phones? Cutdown packages or go PAYG
TV Licence.............................. 11
Satellite/Cable TV...................... 0
Internet Services....................... 25
Groceries etc. ......................... 240 You could cut this down with meal planning
Clothing................................ 30 not easy to cut down with a little one but have a go!
Petrol/diesel........................... 90
Road tax................................ 25
Car Insurance........................... 40
Car maintenance (including MOT)......... 35
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0 Are you paying anything?
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 31
Buildings insurance..................... 21 £41 for B&C is quite high shop around
Contents insurance...................... 20
Life assurance ......................... 30 shop around
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 Cut down a bit
Haircuts................................ 20
Entertainment........................... 200 this is a lot
Holiday................................. 0
Emergency fund.......................... 0
Gym Membership.......................... 48.5 hand in your notice now ready for April.
Total monthly expenses.................. 2022.5

Assets
Cash.................................... 1000
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 15000
Total Assets............................ 148000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 120000...(842)......6.9
Total secured & HP debts...... 120000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Loan 1.........................21179.....272.......0
Credit Card 1..................7100......110.......15.9 work on this.
Total unsecured debts..........28279.....382.......-

Monthly Budget Summary
Total monthly income.................... 2,595
Expenses (including HP & secured debts). 2,022.5
Available for debt repayments........... 572.5
Monthly UNsecured debt repayments....... 382
Amount left after debt repayments....... 190.5
Personal Balance Sheet Summary
Total assets (things you own)........... 148,000
Total HP & Secured debt................. -120,000
Total Unsecured debt.................... -28,279
Net Assets.............................. -279
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

Hope this helps a bit, I'm no expert but good luck!!!

lunar

How long ago did you try applying for a 0% card? if it was a few months it might be worth trying again. Dont reapply for a virgin card though as the stipulate you need to wait 6 months before you try again with them. It took me 18 months to get mine.

Is your loan fixed or can you make overpayments on it? Do you know the interest rate on it?