Another awakening

Reformed_Money_Waster

I've had debt problems for much of my adult life, some it due to low income and family pressures/necessities, some down to my being irresponsible with money. I am married with three children, both my wife and I work. We have quite large credit card and loan debts of around £40,000 with an annual income of only around £21,000.

While we haven’t defaulted on any bills as of late we seem to be constantly living in our overdraft and increasing credit card balances and need to sort out our finances ASAP. Of course, our previous ostrich “head-in-the-sand” view of the money situation was always doomed to failure.

I’ve read much of this site, and received a copy of Martin’s The Money Diet yesterday morning and we are prepared to make some major changes. Here are some of the immediate issues we are tackling, mostly as a result of Martin's articles and forums posts:

Sky+ £34 per month
Cancelled a couple of weeks ago and switched to Freeview.

Currently paying £15 per month for the privilege of having a Lloyds TSB current account.
Opened an Alliance and Leicester current account online last night (discovered Quidco and it's £50 referral for opening the account minutes after, doh!). Will ask Lloyds TSB to downgrade my account to remove account fee, continue to have our wages paid into it but move direct debits to the A&L account with a weekly standing from Lloyds TSB to cover them. The money left in Lloyds TSB will then be for shopping/general spending without eating into bill money.

Lloyds TSB loan payment protection.
We had a massive consolidation loan (never again!) of £25,000 from Lloyds TSB last year. We were perhaps falsely told that we would have to take payment protection to get the loan. I will contact them tomorrow and ask if it can be cancelled and if possible switch to a far cheaper protection from https://www.goodinsurance.co.uk.

£2,600 Barclaycard balance at 11.9%
I'm going to transfer this between my Egg cards, then put £5,000 of highest interest credit/store card debt back on it to get the 5.9% for life offer.

£8000 joint Egg credit card balances
Some of this will end up on Barclaycard, the rest will be moved to the new Lloyds TSB card my wife has just received which is 0% until September. The Egg cards will be cancelled and I will apply for another 0% card in August ready for when Lloyds TSB start charging interest.

Washing machine insurance @ £89.80 per year
Yes, you read that correctly, we pay just under £90 a year to Domestic and General for washing machine cover. Absolute madness, will cancel tomorrow (what's the betting it breaks down the day after or course?)

Contents and buildings insurance.
A quick look at https://www.confused.com shows I could possibly save £8.00 per month. Will examine my policy later and get an exact like for like quite.

Mortgage life/sickness cover
Will shop around for better quotes.

Change telephone providers/packages
Currently on TalkTalk for calls. We were on Plan 2 free for twelve months but that ran out and they automatically switched us to Plan 1. Plan 2 suits us better but costs £4.99 per month so we are going to switch to Primus for free, line rental will stay with BT.
We've used Call18866 for mobiles but will set-up an account with Call18185 and have Call1899 and Call18866 as back-ups if 18185 is ever down.

Spending diary.
We are starting a new spending diary today so we can accurately see where our money goes.

MS Money.
I have a copy of Money 2003 that hasn't ever been used for more than about two weeks after we bought it. As soon as the bank and credit card accounts have been switched around we are going to reinstall it and use it properly.

£2.00 savers club.
We started yesterday with £4.00!

I'm hoping that by documenting my efforts here that we will adhere to this and it won't just be a passing fad as it has been several times before in the past when we have looked into sorting our finances. Seeing so many other people here in similiar circumstances is a great help and I am confident that this time we are going to change things for the better.

RVK2

What a great start! You certainly seem to have a good grasp of the problem and what needs doing. Good Luck

Chortle_2

Just wanted to say good luck and welcome to MSE :beer:

Clearing debt of £40+k is incredibly daunting, but it can be done! I'm sure if you post your SOA on here, lots of advice will follow (although it sounds like you've already got a firm grasp on what needs doing!)

Re the A&L account - you can still get £50+ for free with the referrers scheme. Basically, anyone with an existing account 'refers' a new account holder (once the new account is opened) and both get £50 - but there are loads of people on the referrers board offering to give up £40/45 of their side, so you'd get £90/95 I am just waiting for my account number to turn up, so I can claim mine

Edited to add... Link to refer a friend thread http://forums.moneysavingexpert.com/showthread.html?t=62624&highlight=alliance+leicester

scottishspendaholic

Hi ReformedMoneyWaster,

Welcome to MSE! You seem to be doing all the right things and have your head firmly out of the sand - well done! You are doing really brilliantly.

It might be worth posting a statement of affairs here - detailed income (both incomes and any benefits or tax credits you get) and expenditure (including everything such as birthday, christmas, car costs, tv license as well as bigger things like mortgage, council tax etc) and also a list of your debts (once you've jigged them all about) with a list of current balances and APRs etc so that some eagle-eyed folk on here may be able to make you some further savings.

It might also be worth thinking about popping over the Money Saving Old Style board - http://forums.moneysavingexpert.com/forumdisplay.html?f=33 - for hints and tips on how to eat and clean and live for less - very encouraging.

You could also think about keeping this thread open and posting on it daily or weekly as some kind of motivational thing?

Good luck - we're all with you!

scottishspendaholic x

queenofthedump

wow you don't mess about do you !!! well done and welcome

good luck

Reformed_Money_Waster

Chortle wrote:

Just wanted to say good luck and welcome to MSE :beer:

Cheers. Thanks to everyone else for the warm welcome too.

Chortle wrote:

I'm sure if you post your SOA on here, lots of advice will follow

I would have done so but I don't feel able to do it just yet as I don't actually know where much of my cash goes yet (hence the new diary), and because of all the account juggling I am currently undertaking. I hope to be able to post one by the end of the month though.

Chortle wrote:

Re the A&L account - you can still get £50+ for free with the referrers scheme. Basically, anyone with an existing account 'refers' a new account holder (once the new account is opened) and both get £50 - but there are loads of people on the referrers board offering to give up £40/45 of their side, so you'd get £90/95 I am just waiting for my account number to turn up, so I can claim mine

Brilliant news, thank you. :T

beverleyhills

:hello: Reformed Money Waster

Welcome to MSE. Congratulations on your clear thinking and actions to date. scottighspendacholic mentioned Christmas. Do include it in your plans although it may seem a long way off. One couple I know limit their spending on each other's presents to £5.00. The pleasure comes from the challenge of finding something the other person would really like within that budget. Money that I would have spent on friends presents I give to Charities with their blessing. DH and I agree to have or do something that we would both enjoy together.
Some peole give Promise Notes of times and skills for a later date.

Keep posting there is always someone around to give to boost flagging morale.

Good luck bh

Reformed_Money_Waster

beverleyhills wrote:

:hello: Reformed Money Waster

Welcome to MSE. Congratulations on your clear thinking and actions to date.

Hello to you too.

beverleyhills wrote:

scottighspendacholic mentioned Christmas. Do include it in your plans although it may seem a long way off.

Already ahead of you, I've started another thread asking about it!

beverleyhills wrote:

Keep posting there is always someone around to give to boost flagging morale.

Good luck bh

Cheers. What a wonderfully supportive group of people.

Reformed_Money_Waster

Right, I have a problem with my Lloyds TSB loan. I feel *really* stupid here (and please, I don’t need any replies reminding me of this), but I am paying a shocking £91.45 per month for payment protection. I have phoned to cancel it but have been told me that protection can only be cancelled within the first 30 days of taking out a loan.

I'm so embarrassed to admit I'm paying this. We were told the loan was the best idea for us when we went into our local branch for a review of our finances. We are not normally stupid people but it was incredibly foolish and naive of us to agree to this, and I am shocked now that I have realised just how much the payment protection is. Not to shift blame, we should have been more aware, but we were told that we *had* to take it out to get the loan which was apparently the best thing for our financial situation. There was no mention of the 30 day cooling off period either, although again I should have looked over the paperwork properly myself at the time.

What do I do now? Do I simply accept that I’ve made a very costly mistake, or would it be better to break the rule and take out another loan to pay this one? The current amount owing is £28055.44 at 8.9% with 74 months left! The settlement amount for the next 30 days is £24057.55. It is unsecured.

Thanks in advance.

MrsTinks

Having dealt a lot with lloyds recently then I'd sya leave them in any case But that is stricktly my personal oppinion

In your case I would look around at loan quotes and losts of repayment protection cover (like for like) and then if you can get another loan at the same or lower rate then contact Lloyds and tell them. They can either keep your custom and the amount you pay for the priviledge of having a loan there or they can loose this income too when you take the loan instead of JUST the payment protection cover away.
I was lucky that I just moved my Loan to Egg from Lloyds and it was within the 30 days of starting my loan with Egg I found out about the payment protection cover saving I could make! I have just taken out a policy for £8 a month and this will mean saving about £40 a month even after adding the £8 to my outgoings Over a year that makes for nearly £500 towards paying off debts

jobbingmusician

There is a thread somewhere on this board which stresses that you CAN cancel PPI after the 30 days. Sorry I have never needed to read it thoroughly (sorry for you, I mean. Of course I am delighted that I'm lucky enough never to have been sold this ) but it would be well worth you having a look!!!