Burying my head in the sand

bazwod

That includes handbags shoes and clothes... so probably, yep. i know its sh1te. That's how I bl00dy got here by spending like a demon.

Tixy

You need to keep a spending diary to work out where else you money is going - or trawl back through your bank statements to see if you can see where it has gone.

If you have been spending that amount on clothes for years then you certainly have more than enough to wear and need to cut right back to essentials (real essentials like new knickers, not new handbags ) and how about selling some of the things you no longer use on ebay to raise some cash.

You may feel that you are not yet in crisis but at the rate you are repaying your parents its going to take nearly 10years before you have repaid that money. You need to seriously cut back on luxury spending if you want to move forward with your debt repayments.

Sorry if its harsh but its true - how long has it taken you to get to debts of £26k?, if you carry on as you are how much debt will you be in in another 10years?

I hope you have your lightbulb moment and realise that you are not living sustainably and that being jealous of your parents spending will get you nowhere.

Ames

bazwod wrote: »

This seems to make everything look okay. I don't understand how though! I don't set any money aside for petrol/hair/entertainment/food etc etc (anything that's not a DD or SO) and I only have £132.19 left to spend until payday (15/12/09). I must have done something wrong.....

Statement of Affairs and Personal Balance Sheet
Household Information[/b]
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1871.43
Partners monthly income after tax....... 650 Any chance this could be raised? Without kids extra hours should be easy to do
Benefits................................ 0
Other income............................ 550What's this?
Total monthly income.................... 3071.43

Monthly Expense Details
Mortgage................................ 1262
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 107.5 See if they'll let you pay over 12 months instead of 10
Electricity............................. 22
Gas..................................... 40 These seem high, make sure you turn off at the plug etc, put on a jumper before the heating, don't have the boiler heating water all day long etc
Oil..................................... 0
Water rates............................. 23.65 Look on your supplier's website and see if a meter would be cheaper, if it works out more expensive after you have one put in you can have it taken out again for free within a year.
Telephone (land line)................... 19
Mobile phone............................ 35 Try and lower your tariff and go payg asap
TV Licence.............................. 9.5 should be 12
Satellite/Cable TV...................... 44 A luxury you can't afford
Internet Services....................... 0 is this included in a package?
Groceries etc. ......................... 200 For two this can be cut by dropping a brand, cooking from scratch, batch cooking.
Clothing................................ 200 :eek: stop buying now! Ebay your old stuff and you'll have a fund with which you can constantly recycle through ebay for new stuff. Also charity shops, freegle and car boots are great for new clothes.
Petrol/diesel........................... 100
Road tax................................ 10
Car Insurance........................... 19.98
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................. 8.46
Buildings insurance..................... 26.27
Contents insurance...................... 0
Life assurance ......................... 11.42
Other insurance......................... 13.14 What's this, do you really need it?
Presents (birthday, christmas etc)...... 40 Cut this down to a tenner, do children only and make as much as you can. For next year start collecting freebies and cheap stuff as advertised on the boards here.
Haircuts................................ 40 ouch, try your local college, mine do cuts for £4, and try going longer between each cut.
Entertainment........................... 100 you can't really afford this
Holiday................................. 50 or this
Emergency fund.......................... 40 do you have this saved? Debt is your emergency, so you need to be throwing this at your credit cards, if there's a real emergency then you can use the cards, but you wont be paying interest in the meantime. Unless you go on a DMP, in which case you'll need to make sure it's put aside and not touched.
Emergency call out (for both house)..... 54
Total monthly expenses.................. 2490.92


Assets
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 400
Other assets............................ 0
Total Assets............................ 210400


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 200000...(1262).....0
Total secured & HP debts...... 200000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Zopa...........................6865.56...185.5.....9
Virgin Credit Card.............2123.22...25........1.57
Sainsbury's Loan...............5000......99.42.....0
Bank of Mum & Dad..............11000.....100.......0
A&L OD.........................968.......0.........0
Total unsecured debts..........25956.78..409.92....-


Monthly Budget Summary
Total monthly income.................... 3,071.43
Expenses (including HP & secured debts). 2,490.92
Available for debt repayments........... 580.51
Monthly UNsecured debt repayments....... 409.92
Amount left after debt repayments....... 170.59

Personal Balance Sheet Summary
Total assets (things you own)........... 210,400
Total HP & Secured debt................. -200,000
Total Unsecured debt.................... -25,956.78
Net Assets.............................. -15,556.78

I've put a few comments in red. Does your OH know about your debts? You're going to have to tackle this together.

bazwod

Tixy wrote: »

You need to keep a spending diary to work out where else you money is going - or trawl back through your bank statements to see if you can see where it has gone. I've got a great tool on my phone called pocket money that means you can log every single penny. I've not been using it....but am going to, even for the cash i withdraw....:o

If you have been spending that amount on clothes for years then you certainly have more than enough to wear and need to cut right back to essentials (real essentials like new knickers, not new handbags ) and how about selling some of the things you no longer use on ebay to raise some cash. [COLOR="rgb(255, 0, 255)"]You are completely right Tixy. My size is forever increasing which is a genuine excuse! Half the problem is the constant worrying of knowing that it is all spiralling....that makes me want to eat, i get fatter and then i need new clothes.....Admittedly, I don't need new handbags when I'm fat. But they always fit no matter how much weight i put on! I am going to have a wardrobe sort out and put at least 3 things on eBay tonight. It's heartbreaking how much you lose on the items though compared to the original price!!

You may feel that you are not yet in crisis but at the rate you are repaying your parents its going to take nearly 10years before you have repaid that money. You need to seriously cut back on luxury spending if you want to move forward with your debt repayments. Again, you're right. I don't want to be paying them back when I'm 38 years old. That's embarrassing.

Sorry if its harsh but its true - how long has it taken you to get to debts of £26k?, if you carry on as you are how much debt will you be in in another 10years? Recently it has been getting a lot worse a lot more quickly. Boredom has a lot to do with spending for me. Hopefully having the nail course to do in the new year and then earning through that will help. I've also signed up for volunteering position recently. They're just doing all the CRB checks but that should help to fill some time.....It is harsh what you're saying, but completely true and I appreciate your honesty

I hope you have your lightbulb moment and realise that you are not living sustainably and that being jealous of your parents spending will get you nowhere.

Jealousy of my parents spending is unacceptable, but blimmin difficult to swallow! I don't think they fully know what position I'm putting myself into again and don't mean to be flash. They only have the best of intentions.... I know my current standard of living is not sustainable. Well, it is but I'd end up losing my job, my home and my family I imagine.

One of the reasons that I've come on here to ask for your help is because of a partial light bulb moment.... I heard of someone last week who had turned to serious criminality to get rid of his every increasing debts. He's now not going to see any of his children for a long time... It really brought home that things can escalate and get that bad. I'm sure when he started spending a bit here and there on a credit card and then getting the first consolidation loan he never thought that he would end up in prison because he needed money fast. That's really really sad. Sorry for the depressing tone

bazwod

Ames -

thanks for taking the time to reply, very kind of you....

My OH does earn more than 650 but that is what he puts into our joint account to pay for our bills etc. The rest he uses for his car/season ticket. He is sooooo tight it's untrue!! His season ticket is his only luxury in the whole world (along with the Sky tv) and I don't begrudge him it. He never goes out, never has new clothes (unless I pay for them) and he can't afford to give a penny more to our joint ac....
C.tax - that is the monthly rate - it's £129 a month for 10 months...
Water - we're on a meter
Mobile - am changing to PAYG in Jan when contract runs out...
Sky TV - as above, it's all he does! It does include the internet.
Clothes.....ahem...... It's shocking, yes. As i said in the last entry, part of it is from getting fatter and fatter. That said I will ebay stuff and look into that freegl you said (sounds good!)
Insurance 13.14 - that's for a house that I rent out and covers the buildings insurance.
emergency - it's not saved...
My OH does know about my debts and is constantly having a go at me about it all. He is so good with money. I'm wondering whether I should let him have total control of it all! And just let him give me money when I ask for it. I don't know whether it would put too much strain on our relationship and i'd end up hating him for it! I also feel like it's my problem so I should sort it out....

I didn't explain in my first thread that although the OH and I own this house, I also own a flat that I rent out - that's the other £550 - rental income. The mortgage for that is about £65,000 with the house being worth about £130,000. I only own 38% of the house though, the rest being owned by my parents as an investment (and originally for letting me have somewhere to live!). The mortgage repayments are only £385 p.m so financially it makes more sense for me to carry on renting it than it does selling it (doesn't it?!). I get to pay off the mortgage with the the rental income and so in the long run it should be an investment.....?! I know I'd love to sell it just to have one less thing to worry about but I'm sure it'll be in negative equity....

Ames

I'm not surprised he's good with money, it's yours he's spending! I he wants sky, let him pay for it! What he's giving you only just pays half the mortgage, what about the other bills? If he's sponging off you he's got no right to criticise you for being in debt. Is the 550 other income after the costs of the house (mortgage, insurances etc) have been paid? Otherwise you need to seperate those costs out.

I know how you feel about the clothes thing, I've been putting on weight for the last few years. I've now got 7st to lose now, and my sizes are going down! I've been buying clothes on ebay -monsoon clothes for primark prices, and I should get back roughly what I paid when I come to resell them. Don't think about how much you're getting for the clothes compared to what you paid for them, think about how much you're getting for them in relation to what you can buy with the money.

If you want tips on how to lose weight, let me know. Although there's not much point trying if you're so stressed, you need to get that under control first.

bazwod

Eeek, i've obviously messed up the figures Ames. We both put £650 into our joint account and that covers all household DD's and SO's. I pay for everything in relation to my 'other house'. 'Our mortgage' comes to 876.42, plus the other bills. We pay exactly half of all our joint bills. We each then pay towards our own cars, our own mobile phones etc etc.

I know he's not spending my money really, if anything I spend his! He saves £250 a month into a share scheme at work and has just said that if I carry on paying off my debts and don't get into anymore by Aug 2010 then he'll give me half of the share scheme- hopefully about £5,000, to pay off a debt. And bless him, he really does go without a lot of stuff (whilst i swan around with £300 handbags... ahem again..)

The monsoon clothes for primarni prices sounds ace. I've got tooooo much weight to lose. I've gone up two sizes this year alone. I'll try to think that I'm doing some people favours by selling them bargains!!

And Ames, the weight loss tips would be great, 1st 6lbs is a real acheivement! You must feel great for it. I've lost a load before, several blimmin times and am back in this situation. I think that life is one vicious cycle sometimes. You need to get a grip at exactly the right time of all the right things to stop it spinning so wildly....

going to check on how my boyfriend blazer's doing on ebay!!

Ames

I started with 7st to lose, need to weigh myself again to find out how much it is now! So don't feel bad about that.

I use the healthy eating plate idea. Basically, over a day you eat 1/3 carbs, 1/3 fruit and veg, and the rest split between dairy, protein and fats (obviously the fats aren't necessary). Through summer I did really well because I love berries and was eating a punnet a day, can't carry that on through winter though so I'm trying small portions of dried fruit, as well as bananas and things. Swapping squash for dilute fruit juice was a really big help too. As a guide to how much to eat, protein should be about two packs of playing cards sized a day. I also cut down on the starbucks when I went on the site and saw how many calories were in one - good for the waist and pocket!

Cutting out takeaways helped too, though I had to kick out ex for that to happen...

If I remember anything else I tried I'll let you know.

jamesd

bazwod, yes, keeping the rental place makes sense. Hopefully it's on an interest only loan because you deduct the interest part of the mortgage from the income when working out how much income you need to declare for tax. That usually makes it a good idea to keep the maximum possible amount of capital owed on a rental property, up to the original purchase cost, not more (more isn't allowable against income for tax).

The trouble with the clothes and handbags isn't so much the amount but the amount it's costing you. The interest on those unsecured debts is another 400 a month that you're unable to spend, making the 200 affordable if you can get rid of the unsecured debts and free up that 400 a month.

If your mortgage allows payment holidays or interest only for a while you might want to approach the lender about doing that so that you can put the reduced payment money towards the more costly borrowing. You can catch up with the mortgage payments later, once you're paying less in interest on the unsecured borrowing and have that money available to spend again.

One thing that I do is track my savings and borrowings every day. Then I have a graph that shows how I'm doing so I can see the improving position day by day as I work on it. It can be a useful way to see that you're getting some reward for the reduced spending. You can also track the interest you pay and watch that reducing as you reduce the balances, so you can see the amount you'll have available to spend once the unsecured borrowing is gone going up.

Longer term it's a lot easier to feel secure and good about yourself once you know that you have six months or a year or more of your income in your emergency fund so that you know that you won't be instantly badly affected by a job loss or unexpected big repair bill. Much harder when you're worrying about bills and debts!

Nargleblast

Bazwood - sounds like you have had some good advice so far, and are starting to put some of the suggestions into action. You need to get it into your head that it does not matter how other people live their lives and spend their money (I am referring to your parents here), it is your life and your spending habits that matter. Do not keep up with the Jones's, drag them down to your level, it's cheaper!!!:D

Perhaps a word with your family on the lines of having debts to clear and trying to be very careful with money in order to get back on the straight and narrow would help? And if by chance they gave you some money then use it to clear as much debt as possible, starting with the ones with the highest interest rates. And cut up all plastic cards if you haven't done so already. Once your debts are gone you will get a lot of satisfaction from paying up front for things, knowing you owe nothing to anyone (apart from a mortgage, and that's allowed!) Then you could even consider making overpayments on the mortgage to get it reduced faster?
Once you start this DFW moneysaving stuff it gets as addictive as handbags!