One step at a time...my debt diary and journey to being debt free !!

BrightFuture_3

Hello everyone

I have been lurking on here for the last week or so and have been inspired by your amazing stories to finally face up to our (Mine and DP) debt once and for all.

If I am honest, it has been bad for a long time, even when DP and I first got together over 10 years ago, he had a huge amount of financial baggage from his divorce, but instead of dealing with it, we have muddled through, got a mortgage, remortgaged when we shouldn't etc and here we are pretty much boxed in by debt. In addition, I stupidly left my well paid job to run my own business, which although started well, has since fallen flat, so for 6 months I have had no work, but finally I have found a job which I start on Monday :j it was about the same time that I had my lightbulb moment, sick of being bullied by creditors and buoyed by the prospect of a new job and income, I found this site and to be honest haven't looked back, know it's early days but am determined to see this one through, stick with me ....have a feeling it'll be a bumpy ride !!!

PS:Will be posting my SOA later today (still trying to get my head round it all) but all in all am trying so hard at the moment, working on a budget and using tips have seen on here ebaying, surveying etc.

BrightFuture_3

Well here it is our SOA, feeling very stressed right now as even with going back to full time employment the numbers won't add up

Household Information
Number of adults in household........... 2
Number of children in household......... 2 (13 and 9)
Number of cars owned.................... 1
Number of pets ..............................2 small dog and DD1's pony
Monthly Income Details
Monthly income after tax................ £1300 not had first wage yet but this is my estimated figure
Partners monthly income after tax....... £2000 ish varies each month with overtime
Benefits................................ 142 child benefit
Total monthly income.................... £3442.00

Monthly Outgoings
Mortgage................................ 1346.71
Secured Loan repayments.............453.00
Council tax............................. 355.00
Electricity............................. 58.00
Gas..................................... 60.00
Water rates............................. 39.00
Telephone (land line)................... 20.00
Mobile phone............................ 40.00 (mine and DD1)
TV Licence.............................. 10.99
Satellite/Cable TV...................... 71.00
Internet Services....................... Part of above cost
Groceries etc. ......................... 300.00
Dog Food ............................... 25.00
Clothing................................ 0 try to recycle DD1's clothes to DD2 etc
Petrol/Parking..................100.00
Road tax................................ 15.90
Car Insurance........................... Paid Annually
Other child related expenses............ 200.00 (these are riding lessons for both children)
Pet insurance/vet bills................. 51.00
Buildings & Contents insurance.......39.00
Life/Term Mortgage assurance .......61.00
Presents (birthday, christmas etc)...0.00 tend to panic and buy on the day of birthday or party !
Haircuts................................ 0 no budget
Entertainment........................... 0
DP Smoking ........................... 168.00
Personal Loans x 2....................... 80.00 (agreed reduced rate with LTSB for 6 months)
Credit Cards x 4 .........................217.63
Secured Loan arrears ..................50.00 ( agreed for 6 months)
Total monthly expenses..................£4743.76

Feel very sick, at the mo, I know we only have ourselves to blame though. it's all such a mess, OH business has hit a bad patch over the last year, am hoping they will come through it during the winter (he co-owns a lighting maintenance company specialising in high level work - so car parks, stadiums, retail perks etc therefore winter is best time for them as it gets dark early !!!)

Was feeling so positive in my last post, but now I am thinking how on earth can we, a. increase income by over a grand a month ? b. and/or reduce monthly payments, feels like a mountain, so sad

Any advice much appreciated peeps x

BrightFuture_3

Think I have managed to update signature...here goes

edinburgher

What are your total debts? It would make sense to run them through a snowball calculator (you'll need the APRs) to see what order you should be paying them off in.

Welcome to the boards - will be back with some SOA tips shortly

BrightFuture_3

thanks Edinburgher, do you know where I can find the snowball calculator ???
Some of the CC debt has gone to DCAs so interest frozen etc also CCA'd a couple of the not very nice ones, not to get out of paying, but just to make sure all is in place and to buy a little time. Have also written to Barclaycard for statement of charges with the intent of claiming those back as this is the card I have had for the longest-every little helps !

edinburgher

Snowball calc: http://www.makesenseofcards.com/snowcalc.html

Mortgage - Can you go onto an interest only mortgage for a year or so? if so this would make a considerable difference.

Council Tax - Are you in arrears? This is almost four times what my GF and I pay for our London flat! Alternatively, have you enquired about having it paid over 12 months? I believe that all councils can do this, but you may need to pester them gently.

Satellite/cable - £71 is a lot for a family with -£1k a month. Realistically you should cancel this, or at least drop down to the bare minimum package. Bundles aren't always cheaper - could you get cheap/free internet through your mobile 'phone provider? O2 and Orange both do this.

Riding lessons - This is a massive luxury and is responsible for 20% of your budget shortfall. I'm not saying get rid of the horse (as it's not your kids' fault), but you can't afford this. Surely they have the basics already?

Smoking - No brainer here. It's an addiction that will shorten his life and costs you ~17% of your budget shortfall every month. What's more important - your home or OHs habit?

You also don't mention costs for keeping the pony. Not much of an equestrian, but pretty sure they cost more than the £51 a month you've got listed for vet bills?

The tips listed above will save £500+ if implemented. You might also like to look into some of the tips on the 'Up Your Income' board - thorough eBay clearouts etc. are usually a good start, as are recycling/trading in old mobiles, electrical items and unwanted CDs etc.

I'd double check what you're paying for insurance and make sure that you use a price comparison site to ensure that you're getting the best possible deal.

You should really be thinking about running a fairly tight budget (and having you and OH keep a full spending diary). I suspect that you're possibly underestimating the shortfall. One suggestion would be to base your budget on guaranteed wages, with overtime used solely for paying debts and building up a security cushion for future. After all, you can't budget with money you don't have.

I'd also search both here and the internet for 'envelope budgeting' or 'piggybank budgeting'.

Even with all these ideas, you're still running a fairly hefty shortfall. If you can't make up the difference you may need to contact CCCS or Payplan (free debt management organisations/charities (Payplan isn't a charity)), as you might need to stop paying anything bar token amounts towards your creditors. This will likely have a detrimental effect on your credit history, but as you already own a vehicle and a house this might not be the biggest disaster ever? I'll wait for someone with a better experience of these things to offer some good advice

BrightFuture_3

Hi Edinburgher

Yes Council Tax is in arrears, we missed the beginning part of the year, although the yearly tax on our property works out at £225 per month before arrears.

Sky - yes couldn't agree more, it is mainly for OH benefit as I never seem to watch TV, generally working on debt on laptop or surfing MSE lol ! I should have mentioned that my parents live in the annex of our house so part of that is their multiroom and broadband too, but could definitely get that down - will do that today

Smoking - OH has to stop for his health reasons too (GP has said this to him) at the moment he is cutting down and smoking roll ups but keeps blaming (sorry OH) stress !! Will talk to him again tonight when he gets home.

Horse riding lessons - this is a problem, yes we own the horse, but he is kept at a riding school where he works for his keep (well partly anyway) DD's can ride him, but this generally has to be in lessons which although at a reduced rate are chargeable we have recently looked at moving him to DIY livery, but as I will be working full time this isn't possible as I would need to find someone to look after him twice a day, there are yards out there which are more flexible than where we are, but it is just a case of finding one, we are on the case though !!

Thanks for everything, your comments are much appreciated !

edinburgher

You're very welcome - I will subscribe to the thread and try to offer whatever advice I can