Desire to be Debt Free

smsfrancis

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1625
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1625
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 272
Rent.................................... 450
Management charge (leasehold property).. 0
Council tax............................. 35
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 8
Telephone (land line)................... 2
Mobile phone............................ 40
TV Licence.............................. 5
Satellite/Cable TV...................... 0
Internet Services....................... 5
Groceries etc. ......................... 40
Clothing................................ 10
Petrol/diesel........................... 30
Road tax................................ 1
Car Insurance........................... 33
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 5
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Cash ISA................................ 100
Total monthly expenses.................. 1151

Assets
Cash.................................... 1400
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 3900

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 10800....(272)......13.5
Total secured & HP debts...... 10800.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2000......50........0
Total unsecured debts..........2000......50........-

Monthly Budget Summary
Total monthly income.................... 1,625
Expenses (including HP & secured debts). 1,151
Available for debt repayments........... 474
Monthly UNsecured debt repayments....... 50
Amount left after debt repayments....... 424
Personal Balance Sheet Summary
Total assets (things you own)........... 3,900
Total HP & Secured debt................. -10,800
Total Unsecured debt.................... -2,000
Net Assets.............................. -8,900
Created using the SOA calculator at makesenseofcards.
Reproduced on Moneysavingexpert with permission, using IE browser.

smsfrancis

Hello!

Joined this site after making a number of visits over this year (usually via Google searches) in the hope that I can one day join the list of Debt Free people!

I have two basic debt problems, about £10k in personal loan at 13.5% APR and £2k in credit card debt at 0% APR until Sept 2010.

My income seems to just about cover my regular costs. I have recently taken the step of withdrawing £400 of the remaining funds on a weekly basis (£100 each Sunday) to use as 'pocket money' for the week. All ad-hoc and daily costs such as lunch, socialising, petrol visits, etc, are paid for in this way. Has really helped me not spending into my overdraft as I can actually see what I have to play with!

I contribute £100 per month to a 3.45% AER Cash ISA account in which I now have just over £1400. Feels me with great joy to see this growing steadily but I feel like I'm in a place where I need to use this money against the loan and that my loan's rate is too high compared to current market rates.

On the flip side, I'm worried about applying for new loans after two recent rejections, despite my credit rating actually being quite good, and I am not 100% sure about the exact terms of my Natwest personal loan.

Many thanks in advance for your help
Scott

Shelley84

Hi and welcome!

I'm not an expert at any of this but I would say rather than withdrawing the £400 surplus each month for weekly spends, include those spends on the SOA. That way you will see exactly what you have left - and could possibly make extra payments on the CC.

Maybe start a spending diary if you buy a lot of 'bits and bobs' here and there and you soon see what you spend too much on and could try reducing this.

Someone more knowledgeable will be along soon.

Shelley

smsfrancis

Thank you for your reply.

I use the "cash in hand" method to substitute many of the cash costs in the above, such as groceries, petrol, entertainment, and so on. This method has quickly put me in the happy state of leaving some money in my current account just before pay day - which I then put in to my ISA or against the credit card.

Credit card wise, I never like it to be more than £2k, so I bring this down to here if it's not already and then the rest to the ISA.

I recently moved my CC debt to this Natwest account to get 0% interest again, and I don't even know the pin of it so that has stopped me spending on it! Only use this for large purchases, such as my motorcycle insurance last week which is why it's tipped back over £2k

WASHER

Do you houseshare? I ask because your landline is £2 per month, my line rental is more per month! Your buildings insurance is also very low, do you not have contents insurance?

Withdrawing a £100 per week for spends is alot considering the amount of debt you have, can you not reduce this somewhat. What interest are you getting on your ISA, I bet you are paying more interest on your debts, it would be a wise move to pay off these debts rather than having savings (you could save say a £100 for emergencies).

smsfrancis

Yes I have been trying, and some what succeeding at, not spending the whole £100 pocket money per week. The main hits are the week end it seems.

Also correct, I do houseshare so all those main bills are half of the normal amount.

Interest on the ISA is 3.45% AER, loan is 13.5% APR. Need to investigate repayment terms tonight!

Ames

smsfrancis wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1625
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1625
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 272
Rent.................................... 450
Management charge (leasehold property).. 0
Council tax............................. 35
Electricity............................. 30 If these are half then they're high, make sure you use energy saving bulbs, turn everything off at the plug, put a jumper on before the heating etc.
Gas..................................... 30
Oil..................................... 0
Water rates............................. 8
Telephone (land line)................... 2
Mobile phone............................ 40 Surely if you've got a landline you don't need this, when you can go PAYG and use it only when necessary.
TV Licence.............................. 5 should be 6
Satellite/Cable TV...................... 0
Internet Services....................... 5
Groceries etc. ......................... 40 You really only spend £10 a week? That's incredibly low.
Clothing................................ 10
Petrol/diesel........................... 30
Road tax................................ 1
Car Insurance........................... 33 if it's a bike then that seems high, my sister's is £15 a month for a learner, although it's a small one and she's got 7 years no claims. Make sure you shop around for the best deal.
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 Really nothing? Never a bottle of cough medicine or packet of paracetamol?
Pet insurance/vet bills................. 0
Buildings insurance..................... 5
Contents insurance...................... 0 if you rent why are you paying buildings insurance but not contents?
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 is this really 0?
Haircuts................................ 0
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Cash ISA................................ 100 it's not a good idea to save when you have debts, it's one of Martins main points of advice.
Total monthly expenses.................. 1151

Assets
Cash.................................... 1400
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 3900

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 10800....(272)......13.5
Total secured & HP debts...... 10800.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2000......50........0
Total unsecured debts..........2000......50........-

Monthly Budget Summary
Total monthly income.................... 1,625
Expenses (including HP & secured debts). 1,151
Available for debt repayments........... 474
Monthly UNsecured debt repayments....... 50
Amount left after debt repayments....... 424
Personal Balance Sheet Summary
Total assets (things you own)........... 3,900
Total HP & Secured debt................. -10,800
Total Unsecured debt.................... -2,000
Net Assets.............................. -8,900
Created using the SOA calculator at makesenseofcards.
Reproduced on Moneysavingexpert with permission, using IE browser.

I've put a few comments above. I'm a bit confused about the secured debt, the only thing it can be secured on is the bike, but how do you have a 10k debt for a bike that's only worth 2.5k?

With your ISA and your surplus you can pay your cc off in a couple of months, and then start saving to pay off the loan early, or overpay on it if they'll let you.

smsfrancis

Blimey, Ames, you are totally right! Some glaring mistakes in that SOA... I blame doing it during a semi-working lunch.

Right here it is again and some explanations:

- Loan is unsecured, have moved this.
- Home insurance is infact contents insurance as I do rent.
- Motorcycle insurance is £20 pcm, just renewed but had put old cost!
- Groceries are shared so £80 together each month goes a long way
- Utilities lowered, had over egged these.
- Lowered the cash element that I draw out, because some items are paid by the cash (some of the petrol, etc) and it's my plan to lower this allowance anyway to force myself into spending less!

Hopefully this is a lot more accurate, thank you for your feedback.

I have looked at the loan and it states that 57 days interest will be charged. I think I need some of you Bank Loan experts to help me work this into real terms, i.e: on a 13.5% APR loan, if I over pay by £100 a month, what actually gets taken off the loan?

I also can't help but feel like I'm missing something... as I put £880 of my earnings each month into a second account which all my bills and rent come out of, this usually gets used up with excess going on the CC. Less the cash element leaves about £200-£300 rather than the £500 stated below!

Thanks

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1625
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1625

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 450
Management charge (leasehold property).. 0
Council tax............................. 35
Electricity............................. 20
Gas..................................... 20
Oil..................................... 0
Water rates............................. 8
Telephone (land line)................... 2
Mobile phone............................ 40
TV Licence.............................. 6
Satellite/Cable TV...................... 0
Internet Services....................... 5
Groceries etc. ......................... 40
Clothing................................ 10
Petrol/diesel........................... 15
Road tax................................ 1
Car Insurance........................... 20
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 2
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 7
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Pocket Money............................ 80
Total monthly expenses.................. 801


Assets
Cash.................................... 1400
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 3900

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2162......45........0
Personal Loan..................10799.....227.......13.5
Total unsecured debts..........12961.....272.......-


Monthly Budget Summary
Total monthly income.................... 1,625
Expenses (including HP & secured debts). 801
Available for debt repayments........... 824
Monthly UNsecured debt repayments....... 272
Amount left after debt repayments....... 552

Personal Balance Sheet Summary
Total assets (things you own)........... 3,900
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,961
Net Assets.............................. -9,061

Created using the SOA calculator at makesenseofcards.
Reproduced on Moneysavingexpert with permission, using other browser.

theoretica

If you feel you are missing something you might want to look at your bank statements for the last couple of months and try to fit all the money coming out of your account into another SOA to see where it went.

smsfrancis

Will do, I pump my statements into MS Money so will be able to do this relatively easily.

Could someone please help me with the technicalities of this early repayment charge?

Thank you in advance!

josephine82

If I were you I would pay the ISA amount off your credit card. Then overpay your credit card with the £100 that you would put into your ISA.
Then when you have paid off the credit card put a monthly amount (£100 plus the £45 payment on your credit card) into your ISA and just let it build up and then pay your loan off early if you can. I don't personally think the rate is that bad considering the current climate.

If you can do a spending diary and identify excalty what you have left at the end of the month if it isn't £500, and then work out if you can save any extra.

It depends how committed you are to paying off the loan early- you could cut down on your pocket money but I am a believer that you still have to have a life so maybe just try and identify where you 'waste' money...i.e I cut my spending down by about £50 a month purely by taking a bottle of squash in my bag everywhere I went so I didn't buy bottles of diet coke (!) and limited myself to 1 takeaway coffee a week ( i used to buy one every day).

Its the little things that you feel you can give up where you can add a little extra money towards debt busting, and still have a life.

Good luck!