My start to getting out of debt

lynseydee

Ok, here goes. Thanks to reading purpleprincess' diary I have decided to list my own finances down and see what you think about how I'm doing and if I'm doing anything wrong. I'll do both my finances and joint finances with my husband so you can tell me if there is any better way of doing things. Ok, I'll start with the joint account.

Incoming to joint account

£950.00 paid by husband
£650.00 paid by me
£1,600.00 total

Shopping £300.00 (although we have said we will try and cut this down - this does also include the occassional items of clothing and dvds)

Phone/Broadband £31.99 (we are in the process of switching over to Talk Talk from BT)

TV £10.99

Insurances £64.84

Council Tax £121.83

Gas/Electric £80.00 (have recently switched companies but paying £10.00 more a month than before as they want to see what we are using - advantages: getting clubcard points which we will use towards deals rather than money off shopping)

Water £40.50 (paying off overpayment)

Mortgage £716.35 (can look to getting a better deal October 2007)

Bank loan £223.05 (this will finish in October 2008)

My account

Last month I received £914.34 which was about £1.00 more than the previous month but think it will be about this much every month.

Joint Account £650.00

Petrol £100.00

Mobile £10.00

Car Insurance £15.00 (which is actually paying hubby back so I didn't have to pay the interest for paying monthly)

Halifax credit card £29.00 (roughly but coming down on minimum payment. Currently 0% which finishes in October - not sure whether to keep getting 0% until balance paid off - currently £1,454.46)

Monthly spend £10.00

Egg Loan £93.00 (over 7 years but is flexible so idea is that any spare money will get thrown at this - first payment starts July - amount borrowed £6,000.00)

Payment protection £4.00 (I took this out through British Insurance as obviously it works out cheaper than through Egg

Out of everything I have to pay out it comes to £911.00 which leaves me with £3.34 left over at the end of the month.

Any ideas on how I might increase this amount to give me some more money to pay off my debts?

Toto

Well first of all I am not sure I am qualified to comment looking at the mess my finances are in. But, if it were me I would have all of the loans and credit card dds coming from the joint account. I did this and cut up the cash card they sent me, so there was no way to spend from it. That way the payments are safe avoiding any bounced dds and charges.

Do you need to make all of those journeys for 100 per month? could you car share or public transport/walk at all?

Other than that I can't see much room, apart from mybe groceries.

good luck x

jessicamb

Hi

I think the main focus would be on grocery spend but you could also look at the following:

What is involved in insurance? Would they really pay out if you claimed (some things such as critical illness are not necessarily going to). Can you get them any cheaper when they are up for renewal - https://www.confused.com and similar search multiple sites.


Presumably if you are paying more for gas/electric you will get a cheque back at some point - throw this at the highest apr debt.

In terms of the bills there doesnt seem to be a lot of room to move anything for considerable savings immediately. Try and keep track of the grocery spend and see if you can find areas to cut back - meal planning etc (search the Old Style Board). NB this is seriously a case of pot, kettle and black as I struggle with this but it does work for a lot of people and can cut costs significantly.

Good luck

Good luck

bargainbetty

Hello Lyndsey,

What are the insurances you mention in the joint account - could you shop around on them?

Check out the Old Style Money Saving board to cut down your grocery bill - you could probably take a chunk of £100 or more off that with a bit of creative shopping

If you other half is up for it, you could agree that every penny saved on food/bills etc in the j/acc could be put towards the loan to pay it off the loan there, giving you each an extra £112 per month??

Credit card tart to keep 0% for as long as possible - no point paying interest where it's not needed. Without knowing the apr on the loans, it's tough to work out which you should attack first!!

I hope this little helps - no doubt more bodies will post soon

homersimpson_3

Shopping £300.00 (although we have said we will try and cut this down - this does also include the occassional items of clothing and dvds)

- £300 for how many? if 2 - way over top even if does include occasional item of clothing or dvd. why are you buying dvds? take advantage of free trials.
Insurances £64.84- breakdown needed- what is insurance for?
why are car and mobile essential (not just wanted)?
£70-80 per month for gas and electric- even if this does include £10 & clubcard points may still be too high? . same goes for water. how many people live in house?
Monthly spend £10.00- what is this? if just odds and ends- me money etc- if so well done. :T :T

lynzpower

there isnt much for me to add but welcome Lynsey from another one- me!

I have to say a couple of things strike out for me.

Are you buying your food out of the joint account? Personally, i agree, each to thier own, but we have a joint account for the bills that is untouched, card locked away etc. It ticks over fine, just about breaks even.

The food, well me adn OH take turns for the first 2 weeks of the month I buy it ( OH gets paid weekly) and for the second 2 weeks he does. But we have a strict limit of 25 PW for all lunches, food for the house, cleaning, laundry powder etc. It IS possible with a bit of planning. If either of us manage to come in UNDER the 25 ( rare, but it has been done) then whomevers week it was has the extra to do what they want with. ( a fiver can get a CD off play, or I usually pay a fiver off my b/card if we manage it)

we borrow ( freinds/ library) or download CDs instead of buying them I have worked out I havent been to HMV since Xmas which is an achievement.

If you are committed to paying off your debt asap, then there are a number of additional things you can do like
*online surveys
*quidco /greasypalm/pigsback etc
*sell EVERYTHING you dont NEED on ebay, amazon, loot, greenmetropolis, car boot sale etc

I have found though the most important thing for me to bear in mind is the difference between what I WANT and what I NEED. My CC statements ( the old ones I mean) are littered with the debris of want, not NEED. The general rule of thumb is "will I die or suffer ill-health if I dont have this" so milk, most bills, some food etc comes under want, not need. Another way to check if you shop at tesco is there is a little star on the recipt next to everything thats VATed, they are classed by the government as luxury items. I used to have pretty much everything starred on my old recipts, but ony have the odd crisps/ pack of biscuits starred on my recipt now

lynseydee

Thanks to everyone who has replied. Just to clarify a few points that people have made.

1. Have to have my car for work as hubby is an engineer and out on the road so we work different hours and I work about half an hour away which is not probably the best place to get public transport to.

2. The insurances out of the joint account are buildings and contents which we should have looked at getting cheaper last October but never got round to it so will have to wait til this year and the other insurance is the life assurance. This is through Norwich Union and is for £39.05 for both of us. The house/contents insurance is £29.00.

3. I have the mobile for if I need to use it in an emergency especially as my car is quite old. I changed over to O2 where I get 100 free minutes and text for £10.00 a month.

4. The water is so high at the moment as we are on a water meter which we didn't know when we moved in and so the water company were just charging us on what they thought 2 people would use. Hopefully this should come down once we've paid off what we owe.

5. The monthly spend of £10.00 I have given myself is so I don't end up needing to use my debit card or worse still my credit card. If £10.00 is all I have in my purse I can't spend any more.

6. With the shopping money we physically take the £300.00 out of the bank once we have been paid and this also means like number 5 above if we don't have it we can't spend it.

7. I didn't know about the starred items on the receipts, I'll have to look at what items have been starred and try to avoid them in future.

Thanks for all the opinions every one has given so far.

newleaf

I just wonder about your mobile phone. Do you really only need it for 'emergencies'? If so, you might be better off with PAYG. I switched from a contract with Tmobile to a Tesco PAYG sim card. Hubby found instructions on internet to unlock my existing phone, so I didn't need a new one. Tesco also do a 'Value' Sim card which is even cheaper - but you can't use it for international roaming which I do need, so I got the standard Sim only package with £10 free credit added on my first top up - also clubcard points.

lynzpower

Incidentally Ive just come back from LIdls, and they actually state on the recipt whats vatable and whats not. they even total it up. I paid 2.16 purely in VAT on my 25 quids worth of shopping.

I wonder how much extra the tax mans had out of me over the years for this :eek:

Also I think the point here, isnt about avoiding vatted items ( a 25p pack of ginger nuts was one of them) but really if you didnt spend 300 on food, youd have 200 extra for your creditors. I cant rate tihs enough. there is simply nothing better for me than seeing the extra that I used to spend on food I threw away, being thrown at my barclaycard. :beer:

Ali-OK

lynzpower wrote:

Another way to check if you shop at tesco is there is a little star on the recipt next to everything thats VATed, they are classed by the government as luxury items. I used to have pretty much everything starred on my old recipts, but ony have the odd crisps/ pack of biscuits starred on my recipt now

That's a really useful bit of info, Lynz - thanks for posting that. Do Sainsburys do the same thing - just looking at my receipt from there today and only crisps are starred.

lynseydee

Newleaf, my mobile is a PAYG.