Struggling debt free wanna be's

Nikkei

Hi Guys

Last year we posted in this forum as we had nine thousand pounds worth of debt and we wanted to clear it, but we find ourselves just under a year on with debts of £15,000 and struggling to see the light.

We desparately want to pay this off as soon as possible but we're struggling as we make a plan at the start of every month and we think we're on track until we re-do the spreadsheet at the end of the month and our debt has increased. We're both so stressed and we know we can do it we just need a huge shove in the right direction.

Here's what our monthly budget looks like:

Mortgage £830
Secured Loan £320
Life Insurance £19
Council Tax £100
Tv Licence £12
Gas £40
Electric £40
Orange £25 - Free broadband with this contract
O2 £20
Sky £21 - Free line rental and phone with this contract
Water £20
Computer repayment £30
Lottery £10
Redcross £7
Dogs Trust £10
Pet Insurance £13
College fee's £50
Petrol £100
Food £120 (for three people and 2 dogs and 2 guinea pigs)
Train £12 (for getting to college)
Pocket Money £12 (for son aged 4 - he buys his own toys now)
Catering £12 (hubby work for breakfast/tea/coffee)
Spends £200 (we want to cut this down as much as possible but we're struggling)
Birthdays and Christmas £50
Home Insurance £20
Car Insurance £30

Total budget per month is £2071
Total Income per month is £2770
Total to pay on debt is £699

Jut to explain a few things:

Food - we think we should be able to get this down but need to plan our meals better

Pocket Money - We started to give our son pocket money for two reasons - 1 to try and teach him the value of money he understands if he doesn't have the pennies in his wallet he can't buy the toy he wants. 2 we ended up buying toys every time we went out as a reward for good behaviour and it turned into a routine of buying toys for the sake of buying them and in all honesty his bedroom is full to overflowing with toys and half of them don't get played with!

Catering - Hubby is a fireman and works really long shifts on some nights and he needs his tea and toast to keep going so we cannot reduce this any further

Dogs trust/Red cross - These are our charity donations and we want to continue these as the dogs trust is a donation on behalf of our son and was set up when he was born, we also lost our dog of 16 yrs last week and all animals deserve to get the care and attention needed as she did. Redcross - again it's just nice to give something back to the world it's good for the soul!

Our debts are all on credit cards and look like this

Virgin :£6117
Asda :£3900
Tesco :£269
M&S :£3600
Mint :£2556
Debenhams :£1451
Also one current account with a minus of £680.

One main issue is that when we both get stressed or missable or depressed then we spend on food or things we don't need, we want to start doing things more as a family at a weekend such as walks etc to both cut costs and increase our exercise.

any advice on any or all of these issues would be great,

thanks

nikkei

Shoe_Gal

Hi

Am sure loads of people will be along soon with loads of advice

Just wanted to say that we joined the forum around the same time and I have managed not to increase my overall debt in that time - which has been hard enough I find that keeping a diary on here and a spending diary makes me really conscious of when l am about to 'waste' money

Good luck

GeorgeUK

Have you tried using the SOA calculator? Can you post up your budget in this format (for MSE).
We also need to see the APR's for the cards to work out the best repayment strategy.

Tixy

Hi

Your unsecured debts below add up to £18,573 so you are underestimating to think of it as £15ks worth of debt. (Plus you obviously have secured debt on top).

It would help if you included details of the minimum repayments and also how much interest you pay each month.

If you repaid £669 each month and if you interest averaged say £309 (thats taking a rough guess of an average interest rate of 20%) then you should be reducing your debt by around £360 per month.

If your debt was only £9k a year ago then your have increased your debt by £9000 in a year. So it would appear on average you are spending £1110 on top of your budget.

Do you know where this money has gone? Have you been keeping a spending diary? Unless you know where the additional money is going its hard to advise on where you can make changes.

Tixy

Also I now see that your budget doesn't add up, your costs are actually higher than the £2071. As George says it would help if you could use the SoA calculator which will add all the debt up and your expenses up, and will show info like the interest charged.
Also I see you have included a computer repayment in your expenses, this should also be included in your debt figures.

What does your secured loan relate to? Is this a loan secured on the house from previously consolidating debts or does it relate to a car or other asset?

yorkshire-lad

Hi,I can't really offer any advice,only my support.

The only thing I will say is for the time being I would stop donating,I know it's a nice gesture,but you say you want to do more things as a family,this is where that donation money could go instead of giving it to a charity where a very low % will actually go to the needing. You are in debt,so you have to cut back as much ad you can.

Don't take it as I'm being nasty,cos I'm not,I just want to try and help people who are in a similar boat to me:)

good luck

edit:what is included in the 'spends' bit?

WASHER

I agree with Yorkshire lad, you should think about giving up the monetary charity donations and the lottery, that would save you £27 per month. You could of course give some of the over flow of toys to a charity shop and you will still be doing your bit.

With your debt levels, charity begins at home, and it is highly unlikely you are going to hit the big one on the lottery, use that money towards your debts.

wannabedebtfree_2

Ditto the above to be honest with you, the charity donations are nice but not an essential at the moment and should be stopped until you are in the position to make them.

Your sums don't add up, your outgoings are £2123, and your debts are £18573 so I think you need to double check all of this, the SOA that has been recommended is the best way really, it covers everything and its quite likely that some things have been forgotten!!!

I think its a brilliant idea that you are teaching your son the value of money, but to a 4 year old any money is great, could you not cut this back to £1 a week for a while, my kids are 14 & 12 and have NEVER had pocket money yet the fully understand the value of money, they share a dog walking job on the weekends for an elderly lady and my DS is looking for a paper round or something similar. Honestly, a 4 year old won't notice the difference and if he's mature enough to notice you will have to explain that you have bills that need paying, he will have to accept it!

EDIT: Just a thought, can he sort out some old toys to boot sale and any money he makes is his to spend.....teaching him the value of money in 'real' terms......you need to earn it to spend it, not just get it handed to you!

What is £200 spends spent on?? You need to decide what your priorities are, every penny you pay off your debts are going to mean less interest and a DFD in the near future rather than the far off future, so please do a FULL SOA and we can have a proper look at it!

Nikkei

Hey Guys

Ok here is the SOA - I've put spends in the household emergencies as I couldn't quote figure where it belonged spends is anything we spend in addition to the budget in the SOA ie Clothes, emergency items, haircuts, taking son out for a treat etc.

Anyway here goes!!!!

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 970
Partners monthly income after tax....... 1800
Benefits................................ 100
Other income............................ 0
Total monthly income.................... 2870

Monthly Expense Details
Mortgage................................ 850
Secured/HP loan repayments.............. 360
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 45
TV Licence.............................. 12
Satellite/Cable TV...................... 21
Internet Services....................... 0
Groceries etc. ......................... 120
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 15
Car Insurance........................... 35
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 12
Childcare/nursery....................... 0
Other child related expenses............ 12
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 13
Buildings insurance..................... 10
Contents insurance...................... 10
Life assurance ......................... 20
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 200
Total monthly expenses.................. 2095


Assets
Cash.................................... 2125
House value (Gross)..................... 130000
Shares and bonds........................ 500
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 134125


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 140000...(850)......5.9
Secured Debt.................. 25000....(330)......8.9
Hire Purchase (HP) debt ...... 1200.....(30).......0
Total secured & HP debts...... 166200....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin Money...................6117.19...90........14.9
M & S Money....................3672......25........0
Mint...........................2556......60........14.9
Tesco..........................268.49....50........0
Debenhams......................1451......130.......14.9
Asda...........................3900......0.........0
Total unsecured debts..........17964.68..355.......-


Monthly Budget Summary
Total monthly income.................... 2,870
Expenses (including HP & secured debts). 2,095
Available for debt repayments........... 775
Monthly UNsecured debt repayments....... 355
Amount left after debt repayments....... 420

Personal Balance Sheet Summary
Total assets (things you own)........... 134,125
Total HP & Secured debt................. -166,200
Total Unsecured debt.................... -17,964.68
Net Assets.............................. -48,839.68

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using other browser.[/font]

Thanks for all of your advice so far guys we really appreciate it!

Many Thanks
Nikkei and Ian

Flower08

Nikkei wrote: »

Hey Guys

Ok here is the SOA - I've put spends in the household emergencies as I couldn't quote figure where it belonged spends is anything we spend in addition to the budget in the SOA ie Clothes, emergency items, haircuts, taking son out for a treat etc.

Anyway here goes!!!!

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 970
Partners monthly income after tax....... 1800
Benefits................................ 100 Are you getting everything you are entitled to?
Other income............................ 0
Total monthly income.................... 2870

Monthly Expense Details
Mortgage................................ 850
Secured/HP loan repayments.............. 360
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100 Is this over 12 months? If its only over 10 ask them to change it
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 45 Swap to a PAYG phone or lower your contract where possible
TV Licence.............................. 12
Satellite/Cable TV...................... 21
Internet Services....................... 0
Groceries etc. ......................... 120 Is this really all you spend in a month? If it is thats good. Do you do any mid-week top up shops?
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 15
Car Insurance........................... 35
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 12 Whats this for?
Childcare/nursery....................... 0
Other child related expenses............ 12
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 13
Buildings insurance..................... 10
Contents insurance...................... 10
Life assurance ......................... 20
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50 Could this be lowered? You can really afford presents, maybe token presents?
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 200
Total monthly expenses.................. 2095


Assets
Cash.................................... 2125
House value (Gross)..................... 130000
Shares and bonds........................ 500
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 134125


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 140000...(850)......5.9
Secured Debt.................. 25000....(330)......8.9
Hire Purchase (HP) debt ...... 1200.....(30).......0
Total secured & HP debts...... 166200....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin Money...................6117.19...90........14.9
M & S Money....................3672......25........0
Mint...........................2556......60........14.9
Tesco..........................268.49....50........0
Debenhams......................1451......130.......14.9
Asda...........................3900......0.........0
Total unsecured debts..........17964.68..355.......-


Monthly Budget Summary
Total monthly income.................... 2,870
Expenses (including HP & secured debts). 2,095
Available for debt repayments........... 775
Monthly UNsecured debt repayments....... 355
Amount left after debt repayments....... 420

Personal Balance Sheet Summary
Total assets (things you own)........... 134,125
Total HP & Secured debt................. -166,200
Total Unsecured debt.................... -17,964.68
Net Assets.............................. -48,839.68

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using other browser.[/font]

Thanks for all of your advice so far guys we really appreciate it!

Many Thanks
Nikkei and Ian

Have put a few ideas but im sure some more knowledgable people will be along soon.
Have you tried keeping a spending diary as all the little spends you dont think of soon add up.

According to this you have 420pounds after you have made your minimum payments - this shoud be thrown at the highest rate card - thats if you do have this money left? If you dont you need to find out where its going.

KittyKate

My thoughts in blue..good luck

Nikkei wrote: »

Hey Guys

Monthly Income Details
Monthly income after tax................ 970
Partners monthly income after tax....... 1800
Benefits................................ 100 Have you checked entitledto website to make sure you're getting all you can?
Other income............................ 0Could you do extra jobs, online reviews, even entering competitions (lots of us make a good 'second wage' this way! Or could you ebay off old toys etc?
Total monthly income.................... 2870[/b]

Monthly Expense Details
Mortgage................................ 850
Secured/HP loan repayments.............. 360
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 45 Switch to PAYG
TV Licence.............................. 12
Satellite/Cable TV...................... 21 Switch to Freeview
Internet Services....................... 0 You don't have internet at home?
Groceries etc. ......................... 120 This seems quite low, does your 'spends' include top up shops and fast food?
Clothing................................ 0 Again this is part of your 'spends', how much are you spending a month on haircuts? Can you do these at home?
Petrol/diesel........................... 100
Road tax................................ 15
Car Insurance........................... 35
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 12 ?
Childcare/nursery....................... 0
Other child related expenses............ 12 What are these?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 13 Is this the lowest you can get - can you cancel and rebuy with cashback?
Buildings insurance..................... 10
Contents insurance...................... 10
Life assurance ......................... 20 Is this the cheapest?
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50 This seems VERY high. £600 a year on presents?
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 200This is a lot of 'unspecified' money! Can you break this down?
Total monthly expenses.................. 2095

As for the charity donations, it's a lovely gesture but how about your son puts a few cans of dog food in the collections supermarkets have? It's far cheaper, directly helps dogs and is far more interactive than donating money (which your son doesn't see). With the red cross...I suggest you save your cash for now and work on getting out of debt. Stick a fiver in the sally army collection at christmas - believe me, this money is well used.