New Diary - Hope to be DF eventually....

Emma285

Like many of the other diaries i've read, i've been reading forums for ages but finally think it's time to start mine! Just don't really know where to start

I recently did the budget planner thingy to find out that we are spending more than we earn so have decided to start paying very close attention. It also explained why we have accumulated so much debt.

I'm self employed and my earnings are variable and also quite low at present as have a 15 month old son at home and juggle working around free childcare options. We're also expecting baby no. 2 at the end of Nov - only 5 1/2 weeks away, so i will be back on the governments 'generous' maternity allowance for 3 months. My DH is in full time employment but doesn't earn enough to support us completely.

Between us we have about £20k on credit cards - some are good ones like Barclaycard life of the balance, but two are not and the interest is at 19.9% so the task this week is to swap to a loan as neither of us can get any other cards with enough to transfer the £10k balance. Thinking about Tesco's / Sainsbury's/ Alliance & Leicester for 7.9% over 5 yrs?? If anyone has any pearls of wisdom about which to go for or avoid i'd be very grateful.

Our mortgage debt stands at £137k but we have just over 31yrs remaining so definitely want to reduce this. We're currently 2 1/2 yrs into a fixed rate for 5yrs at 5.6% which i don't think is bad - not great either. I did manage to overpay by £25 a month for around 18 months, which i know isn't a lot but this just balanced out our 3 month payment holiday i took whilst on maternity leave. I've stopped overpaying at the moment in order to send any spare cash towards the CC debts as they are more expensive, but am keen to see this reduce.

This time Halifax won't give us the break as they say our LTV is negative. I don't believe this but in order for them to change their minds we'd have to pay £130 to have a valuer round to review it's value with no guarantees. I believe, based on other similar properties our house is worth £165k minimum - they reckoned £134k?? We paid £147k back in 2004 so god knows how they worked this out. We've also spent a lot of time refurbishing it ourselves properly as it needed updating. Just don't really know whether to risk a valuation given the market today or try and manage without a break :undecided. The advisor at halifax said they would only accept a payment holiday if the value came out at £158k or higher!

We also have our joint and personal accounts with Halifax, and while the joint usually stays in credit most of the month, both our personal accounts regularly sit in the overdraft. Whilst not ideal, the new charges mean i'd be spending double! I've already started switching to A & L and DH is going to do the same, so once we're both there i'm moving the joint - hopefully this means we both get £100 each and as i recommeded him we should also get £25 each as well!

I've done a lot of the usual stuff reducing most bills or at least getting the best deals - just have home insurance left to do. I've also started keeping track of what we spend on groceries as this can be all over the place. This month we've spent £150 so far - but there's definitely room for improvement!

I'm also selling little bits on ebay, but once next baby's here i'll be able to start selling some bigger / more valuable things to generate some extra cash. The trick then will be to not spend it on treats (we rarely treat ourselves as there's often no money left!).

My main aims are to maximise our income and to start clearing the CC's faster then to overpay on the mortgage. Any advice along the way will be great, and i'll keep things updated as an incentive to stay motivated! Sorry this is such a long post but thought i'd get it all in !

Catzpaws

Hi Emma

First of all, congrats on your soon-to-be new little one!

And, second, good for you for starting your diary (I have one too and it has made me become so much more focused, it's fantastic).

I can't really advise on the credit card or house situation, sorry, but one thing that I have done since my LBM is to merge my and OH's finances. We always had a joint account for bills, and 2 separate ones. Upshot was, I found it very unmanageable as I was paying O/D charges, so was the joint one, but OH's account was in the black. Silly really. Anyway, now that we have merged it's made budgeting so much simpler. Works for us.

If you post a SOA, that will help others to help. Hard to suggest recommendations without having the figures at hand... A good thing for you to continue to refer to as well.

And, using a snowball calculator will help you to determine your debt free date. Very motivating.

Getting buy-in and support from your OH is v important... hope he's on board.

Oh, and I've found the grocery challenge fab too.

Good luck with everything - you will find tons of support and advice here.

CP x

toolittletime

Well done on starting your diary!! I've just come back to mine after a break. Will have to keep this short as I'm supposed to be cooking the kids tea!! But just wanted to say that we've just done a couple of balance transfers and found BT and post office had good deals. BT was 12 months interest free and Post office was 6 months interest free. Good luck with your debt free journey!

Emma285

Thanks for that, will get round to doing a SOA hopefully this week. Where do i go to do the snowball calculator? We've set ourselves a target of being free of debt (excluding mortgage) in 5 years and then we'll think about the mortgage.

We've just applied for a loan with Tesco in the end to cover those expensive cards - would struggle to get a large enough balance on any new card, and also have 7 cc's between us! Hopefully we'll hear about that shortly.

OH is on board as debt is really starting to get to him, but i think we still have some way to go! I've got a fairly good understanding of where we are and what we need to do, just need to get into the habit of doing it!

Catzpaws

Snowball calculator is http://www.makesenseofcards.com/snowcalc.html

SOA is http://www.makesenseofcards.com/soacalc.html

My OH also struggled to get a card to move his £9k balance on one of his cards when it came off 0%. Ended up getting one with a £5k limit and paying off the rest. Pains me to see the interest :mad::mad::mad:.

Hope the above links help x

Emma285

No word from Tesco's yet about the loan - was hoping they'd phone, especially given the postal strikes!

Had another LBM just before i got out of bed this morning - i could do a balance transfer to clear my overdraft with Halifax as A & L haven't given me much. Can't see them upping my limit while i'm on MA! Think i've just got enough room on Barclaycard so could do another life of balance.

OH was winging about amount of time i've spent on here reading, so keeping it short - but he's out all day tomorrow so i'll try and get my SOA done and look at snowball effect!

savingholmes

Hi Emma

hello and welcome to the boards. hope that the LOB works out well - that would be a better option - more flexibility to overpay. Happy shiney new diary and good luck

Catzpaws

Emma285 wrote: »

No word from Tesco's yet about the loan - was hoping they'd phone, especially given the postal strikes!

Had another LBM just before i got out of bed this morning - i could do a balance transfer to clear my overdraft with Halifax as A & L haven't given me much. Can't see them upping my limit while i'm on MA! Think i've just got enough room on Barclaycard so could do another life of balance.

OH was winging about amount of time i've spent on here reading, so keeping it short - but he's out all day tomorrow so i'll try and get my SOA done and look at snowball effect!

Yeah, my hubbie thinks I'm 'a lot' obsessed with MSE!! :money::money::money:

Emma285

Just done SOA, so here goes...

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 533
Partners monthly income after tax....... 1430
Benefits................................ 120
Other income............................ 0
Total monthly income.................... 2083
Monthly Expense Details
Mortgage................................ 787.1
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 35
Gas..................................... 30
Oil..................................... 0
Water rates............................. 37
Telephone (land line)................... 15 includes broadband
Mobile phone............................ 45 two contracts
TV Licence.............................. 11
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 90 Hopefully on way down now i've finished work!
Road tax................................ 20
Car Insurance........................... 58
Car maintenance (including MOT)......... 0
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..................... [STRIKE]25[/STRIKE] 26
Contents insurance...................... [STRIKE]25[/STRIKE] FREE!!!:money:
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1448.1

Assets
Cash.................................... 0
House value (Gross)..................... 170000
Shares and bonds........................ 0
Car(s).................................. 10000
Other assets............................ 0
Total Assets............................ 180000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 136952...(787.1)....5.6
Total secured & HP debts...... 136952....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax .......................6800......110.......19.9
Egg............................4737......120.......19.9
Barclaycard 1..................3969......110.......6.9
Barclays CDL...................0.........158.......0
Tesco..........................1572......60........0
Barclaycard 2..................3300......90........6.9
Total unsecured debts..........20378.....648.......-

Monthly Budget Summary
Total monthly income.................... 2,083
Expenses (including HP & secured debts). 1,448.1
Available for debt repayments........... 634.9
Monthly UNsecured debt repayments....... 648
Amount short for making debt repayments. -13.1
Personal Balance Sheet Summary
Total assets (things you own)........... 180,000
Total HP & Secured debt................. -136,952
Total Unsecured debt.................... -20,378
Net Assets.............................. 22,670
Created using the SOA calculator at make sense of cards
Reproduced on Moneysavingexpert with permission, using IE browser.

Emma285

I'm sure i've missed something as when i did this on the MSE budget calc we were negative at the end of each month. Will have to go and have another look. Mind you this is the first month i've monitored our grocery spend and it's lower than i thought - plus we've been quite frugal this month.

Emma285

Just remembered i have a CD loan from barclays - £158 pm!