Help needed - confused myself

moneymakestheworldgoround

Hello

I am seriously getting confused and I feel I am complicating a simple process.

I am in debt and for years I have been struggling to get on top of the bills and debts. I had my lightbulb moment on 1st May this year and felt at last I might get somewhere.

HOWEVER I am so committed to paying off the debts - set up spreadsheet, worked out APRs, devised a plan to divide debts over 12 months, worked out what payments and overpayments were needed etc... - that I seem to have got carried away in May. I nearly met my monthly target of £1300 debt payments, and was so excited, but then this month I had that stupid realization that I am not covering the monthly normal bill payments. So although the old debts were going down nicely, the current bills coming in were not being met, therefore my debt was technically increasing.

So I decided in June, I would work out all the monthly normal bills ( TV license, water, sewage etc..) and pay those first then whatever I have left over would go to the debts.

But I am so impatient that I am still throwing money at the debts rather than the monthly outgoings.

I seem to be able to work it all out on paper, but reality is a difference world completely.

I need help and some stern talking to make me break this down into a simple, logical process rather than the 100% full steam ahead, sell my granny type haphazard affair I have embarked on.

I've done the SOA and had advice and know what to cut back on, and that I need to increase income etc... I am more confused with how to go about tackling things.

Hope this makes sense.

dancingfairy

Hi. I think your plan for June sounds good. It sounds like you got a little carried away in May! Lol. I think you need to start at the begining to be honest. I would post an SOA and note down what you have done to tackle things and be realistic with the amounts - you may be making things worse by paying off debts and not paying the regular bills as things like mortgage/rent, electric, food etc are the most important.
Like I said, deep breath and start at the begining.
df

TotallyBroke

Use https://www.makesenseofcards.com/soacalc.html and post it up. We can then look at what debt you have compared to normal outgoings. If you don't have too much bad credit we can advise on shuffling the debt onto 0% deals to stop it costing you more. Concentrating on paying overpayments to one debt at a time will cost you less and pay off quicker.
Also there maybe household bills that could be cut back on.

Debtoxing

Hi and congratulations on starting the debt-free journey. You sound hugely enthusiastic, which is great! :j

If I were you, I would set up direct debits for all the regular bills. Ours all go out on the day after payday - I don't even have to think about paying them off. I just check into the account on the second day of the month and I know that everything left there is either available for housekeeping or debt-bashing. I have a set budget for the housekeeping, and I keep a spending diary so I know how much I have left to spend. Works for me!

Good luck!

L.
x

moneymakestheworldgoround

Hi Dancingfairy,

Thanks for the reply.

This is going to sound silly, but I am pregnant, hormones have destroyed my brain cells, and I do lack basic common sense normally anyway, but where is the beginning?

My thought in May was tackle the smallest debts first
Then it changed to tackle the biggest APRs
Then it changed to tackle the ones with the highest repayments to free up cash when paid
Then it was tackle the ones who ring the most or send the most letters !
Then it was tackle the ones threatening baliffs ( been there, done that - horrid experience)
Then it was tackle rent arrears because I dont want to get evicted

And so on ...

In June, I changed to tackle the normal bills
But then it changed to the dreaded council tax arrears which panic me
Then it changed to the credit card due to APR
Then it changed to ........

Can you see my flaky side become clearer ??

I dont seem to have enough money to do it all, and I really want to !!

When I posted the SOA, the main advice was change gas and electric, get free transport to school for my eldest,change car insurance, increase income.

I still cant find out if I can change gas and electric when I am in arrears.
I cant get free transport for school as I live on the cusp of two borders, and I am in one county, and the school is in another, so not eligible.
I used confused.com for the car insurance, but it worked out £16 more a month.

Increasing income- I am slowly getting through slicethepie. Love it but needs some time invested in building up the pennies.
I have started competitions again as I used to win a lot and I have loads of blank postcards and stamps.
I have investigated match betting. I am struggling with how to take the theory into practise, but I am determined to get going with it by the end of the month.
I am trying to list 10 things on ebay a day. I managed 17 yesterday.

I have also made a list of everything I have to sell in paper,ebay or car boots, which is huge :

Car
Gazebo
Books ( new)
Candles
Jewellery
Toys
Clothing
Old Printing Press
All my old jewellery findings as I havent used this for months
Security etching equipment
Toddler music and dance equipment and business
Wedding Dress business and stock
Bouncy Castle
Lots of material I bought for cushion making
Lots of Emo ties and tshirts I found in a box in the front room (!)


As I am pregnant, this will help clear out the house and garden sheds before the baby arrives.

I am also trying to expand my business I do from home. I have prepared some leaflets and brochures so I will start getting these sent out and delivered by end of June.

My family think I need to do this one step at a time, but I think I need to get all those plates spinning to try and get the right balance between paying new bills and old debts.

Advice would be gratefully received.

moneymakestheworldgoround

Hi TotallyBroke

I dont have good credit. One of my debts is to Provident. I know a bank loan would be half the price, but the bank adviser said although I have a great rating with them, for some reason the computer says no. He said probably to do with external credit rating. Although I do have a CCJ, this doesnt show on my experian report . I know I miss payments frequently, but the credit report looks fine , as though it belongs to someone else. But being accepted for extra credit is an absolute no no.

Hi debtoxing,

I love this idea. I get WTFC and CTC weekly, and I am self employed so my income is sporadic, so unfortunately DDs are not my greatest friend. I do have some weekly s/o going out, but I am not brave enough to commit all my household bills to s/o because if I dont make enough sales that week, I would be absolutely broke. But perhaps this is what I need to be aiming for - monthly DDs. If I could get all monies paid on the same day in the same place, you are right, I could sort out easily what was needed, and whats left for me to play with. I'll have to think that through.

moneymakestheworldgoround

The other point I forgot to make is my self employment.

I currently earn around £400 per month. I know I could make £3000 profit a month without breaking into a sweat.

However I need the cash to buy the stock first.

This has been my problem for the last few months.

I used to ( USED TO!) use household money meant for bills, to buy stock, to sell quickly, to make a profit with the idea that the profit would go back into the business and the initial outlay would go back into the household bills. However I was finding more and more sales lined up, and therefore all money would go back into the business, and lots more stock and more orders. At some stage horrendous charges would be added to household bills and old debts, and I would have to surrender and use all the money I had made including profit to pay back the bills that were half the amount in the first place !! Therefore ending up in the same position 2 months down the line than if I had just paid the blummng bills in the first place.

I did the opposite last month. I had a large order, had the stock already, but then used 100% of the sale money to put into debts ! Hence I have no stock at all now, and no money to buy any ! Doh !

Generalised basic description, but you get the drift.

So I need to get bills under control, and debts cleared so that I can build the business without fear of using money meant for other things.

And I need a brain transplant I think.

TotallyBroke

Wow, you have a lot going on.
I thought you could help with school travel costs if you live 3miles from the school so do check out again.

You do need to spin the plates but only a maximum of 3 at a time, otherwise they will all come crashing down around you. I suggest those 3 be rent, council tax and posting leaflets for business. Have you considered when getting orders asking for a small payment upfront and balance to be collected when received.

Please do post up the soa, put in the outgoings the normal monthly amount for gas & elec then write next to it 'in arrears' put the arrears amount down into the debt section.
You possibly won't be able to change supplier while in arrears but there are things you can do to reduce the usage.
Careful meal planning etc will help reduce your grocery shopping etc and making the menu plan may help when there is a week with no wage as you will have meals already cooked in the freezer.

moneymakestheworldgoround

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 3
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 400
Partners monthly income after tax....... 0
Benefits................................ 1748
Other income............................ 150
Total monthly income.................... 2148
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 720
Management charge (leasehold property).. 0
Council tax............................. 99
Electricity............................. 60 I dont agree with this but they assure me this is my monthly usage
Gas..................................... 40
Oil..................................... 0
Water rates............................. 19
Telephone (land line)................... 0
Mobile phone............................ 50 This worked out cheaper than landline and mobile seperately
TV Licence.............................. 15
Satellite/Cable TV...................... 0
Internet Services....................... 30 Mobile broadband as no landline
Groceries etc. ......................... 140
Clothing................................ 0
Petrol/diesel........................... 150 Buiness and school runs. 2 Litre car that I cant sell in current market
Road tax................................ 18
Car Insurance........................... 55 Have points, no garage, business usage, bad area. Cant get this down at all.
Car maintenance (including MOT)......... 5 Not needed any repairs for 2 years.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 860 3 kids, at 3 different schools, covers 4 days a week and holidays. Government helps with 75% of this.
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2261

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 1500

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly.. .APR
Vanquis........................1250......50....... .29
Provident......................4300......396...... .?
Overdraft......................2500......35 int.....?
Rent arrears...................570.......50........0
H/Benefit arrears..............2250......40........0
Water arrears..................PAID
Sewage arrears.................PAID
Electric arrears...............304.......68........0
Gas arrears ...................287.......20........0
Council Tax arrears............650.......45........0
Parents........................2884......20........0
Total unsecured debts..........14995.....724.......

Monthly Budget Summary
Total monthly income.................... 2,298
Expenses (including HP & secured debts). 2,261
Available for debt repayments........... 37
Monthly UNsecured debt repayments....... 724
Amount short for making debt repayments. -687 :mad:
Personal Balance Sheet
Total assets (things you own)........... 1500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -14995


I am sure I dont use the much electric. I have the washing machine on once a day, the dishwasher once a day, gas oven, no tumble dryer, one telly in the house, I always sit in the dark, no one uses kettle using the daytime.... Umm.

Petrol is high due to business usage. I really need to downscale the car, but with 3 kids and one on the way, a Micra isnt going to do it. I cant fit the stock in a small car either. Also nothing seems to be selling round here carwise at the moment.

The childcare is most people's issue. The government pays 75% so if I got rid of this, I would actually have £215 a month more month, but my income would decrease by £675. The childminder does some of the school runs so my petrol would increase. She also feeds 2 of them 4 days a week so my food bill would increase slightly. Also in the holidays, they go to the beach, MacDonalds, park, museum etc.. so I dont have to provide any paid entertainment at all. If I stopped the childcare, I would need to factor in some budget for this. Also I would need to sign up for morning and afternoon school clubs to stagger pick up times, which apparently are £9 a session x 2 kids x twice a day so this would be £144 a week. So my saving of £215 a month would need 25% school clubs (£144) plus petrol plus entertainment plus food which I think would be about the same.

Debtoxing

You can buy something called an OWL monitor that tells you how much electricity you're using. Apparently you can go round switching things on and off and working out which devices are causing your high electricity bills. Opinion seems to be split on MSE about whether they're any good or not.

Perhaps you have an inefficient fridge or freezer or something? Television left on standby maybe? Plug-in alarm clock? There are so many things that get left on all the time without you ever noticing. I cannot get my electricity usage below 15kwh a day, however hard I try. Even though we nearly kill ourselves stumbling around in the dark at bedtime!

L.
x

moneymakestheworldgoround

Totallybroke :

I agree with the 3 plates spinning. That sounds like a good compromise.

Rent
Council tax
Leaflets

That is my aim for June then.

I really really need to increase my income I think. I do normally get 100% upfront on ebay sales, and normally on web sales unless it is a large company order. I have tried selling stock before I get it, but infavourably this always asks for trouble. Order stock, advertise stock, get orders for stock, wait 5 days to transfer from paypal to account, then 3 days to forward on to company, then 3 days - 3 weeks for stock to be delivered, then 2 days for stock to be delivered to customer...... Normally customers are fed up by then ! And if the item has been left off the pallet, I am stuffed. Or if it arrives at mine broke, the customer has been waiting weeks and I have to cancel order.. Complaints galore. But I do understand the concept of what you are saying. I will need to see if I can refine it a bit more.

If I can sell something large, I can clear the rent arrears, or the electric and free up some more cash.

I have had some interest in the wedding dresses on ebay, but no one committing to buying them ! Fingers crossed. This would clear rent arrears, and most of the electric arrears.


PS Most people I know tell me I am stupid not to go on benefits. I cant afford to make debt repayments, I am single mum, 3 kids, one more on the way, entitled to help with CT and housing, etc..... BUT I am stubborn and I am not quite at this stage yet. I have about 8 weeks fight left in me and I am going to do everything I can to get this working for me. If I fail, then I may have to hold my hands up and say I give up, BUT I am not there yet so please dont suggest it !