Huge debts - advice please

the_spenders

Thanks to everyone for ideas and the wealth of knowledge. It's reassuring.

We will look at every outgoing and try to shave off/cut back wherever.
Clothing at £40 was for all four of us (2 adults, 2 children including work but will look at cutting this right back). Also, think I cutback haircuts and get that down.

There are quite a few things we could try - cutting groceries back (thanks for your suggestion Washer of cutting back a certain amount next month and more the following month).

I have a question about mobile phones - I've only just started a new contract with Carphone Warehouse - only started on 6th Feb at £15 per month. Do you think they would be open to me calling up to ask for a better deal? I ifeel foolish for not shopping around more as it was £10 cheaper than I was previously paying. (I'm even keeping my old handset so feel short changed).

Also, how favourable are credit card companies (Virgin and Tesco) if we contacted them and asked to transfer to a cheaper deal for life of balance? Anyone got ideas on this? HSBC won't let me switch my overdraft to a flexiloan (where I can make flexible over payments as I don't earn enough). My husband has enough maxed out limits of his own to make it yet another joint loan.

Deep_In_Debt

I can't really help but it might be worth calling the Carphone Warehouse and ask them if they could do a better deal as you are sure you could do better elsewhere and they may do a deal as I'm sure they'd rather have your custom than not at all.

Is there a chance you could cancel your mobile contract? I'm on PAYG and have been for years and top up max £10.00pm and from time to time get free weekend calls and texts.

Not really up on these things as I've only ever done PAYG.

Good luck.

Goodtimesahead

Were any of the loans/credit cards taken out before Apr 2007? Some or all may be unenforceable in Court if they can't produce a true copy of the original CCA Something to consider if you are struggling to repay huge monthy sums which is probably just the interest only, so you will be going nowhere with those!

otterspasm

Hi there,
Good on you for posting!

I would agree with all thats been said so far (you are reducing you phone costs, great, haircuts could be done every 2 months? and £40 on clothes is about 8 times our budget but I am happy to buy second hand...you can get fantastic things at carboot sales/charity shops and on ebay) and would like to suggest that, if you don't already, you should check out the 'Money-Saving Old Style' forum on here. It is GREAT for reducing you expenses.

I think you would benefit from Meal/menu planning for the month. I feed a family of four very healthily and well for no more than £250 a month because I plan our meals for the next two weeks (or you could do it for a month if you were organised enough, I'm not :-). I then write my shopping list from this meal plan. It means I am only buying what we will use. Cuts down on waste massively. I would also recommend not buying branded goods but go for supermarket own brands or buy at Lidl/Netto/Aldi. Their products are good quality and much cheaper than other places. Lidl (my favourite) sell some organic products too. I bake our own bread which costs about 40p for a seeded half wholemeal half white large loaf...fresh and you know whats in it. Lidl bread flour is very good.

I do daily scratches too which have already been mentioned I think (free daily scratch cards on bingo sites) I make about £200 a year doing that and save it up for christmas.

We have about £15,000 a year income at the mo as I am an at home mum.

I hope that all helps, GOOD LUCK!

Tess

indebtinsussex

the_spenders wrote: »

Here's the SOA...

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 852
Partners monthly income after tax....... 2200
Benefits................................ 177
Other income............................ 0
Total monthly income.................... 3229
Monthly Expense Details
Mortgage................................ 1164 Is this on a repayment basis or interest only? Would your mortgage company consider letting you switch part of your mortgage to interest only for a while
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 108
Electricity............................. 27
Gas..................................... 40 can you get these consolidated?
Oil..................................... 0
Water rates............................. 39
Telephone (land line)................... 21
Mobile phone............................ 45 can you go to payg?
TV Licence.............................. 11
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400 Reduce here
Clothing................................ 40 Are these all necessities?
Petrol/diesel........................... 200
Road tax................................ 37
Car Insurance........................... 49 Is this the cheapest around
Car maintenance (including MOT)......... 35
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 230 Are you claiming vouchers through your work?
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 9
Contents insurance...................... 9
Life assurance ......................... 81 This is really high, it is well worth etting the cover rebroked as prices have dropped
Other insurance......................... 40 Is this necessary
Presents (birthday, christmas etc)...... 45 Can you reduce
Haircuts................................ 25 Can you go elsewhere for cheaper cuts?
Entertainment........................... 40 Can you reduce this?
Holiday................................. 30 Wouldn't even think about holidays at the moment, sorry x
Emergency fund.......................... 20 Use your emergancy fund
Exceeding overdraft fees ............... 8
Overdraft interest 1.................... 30
Union Fees.............................. 9
Gas/Boiler Insurance.................... 23
Total monthly expenses.................. 2865

Assets
Cash.................................... 0
House value (Gross)..................... 180000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 185000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 190224...(1164).....6.49
Total secured & HP debts...... 190224....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Overdraft - 1..................1000......0.........18
Overdraft - 2..................2500......0.........18
Visa - Virgin 1................992.......25........0
Car loan ......................3000......100.......0
Loan - Tesco...................13613.....223.......6
Visa - Tesco...................4660......100.......15
Visa - Virgin 2................4880......150.......18.9
Total unsecured debts..........30645.....598.......-

Monthly Budget Summary
Total monthly income.................... 3,229
Expenses (including HP & secured debts). 2,865
Available for debt repayments........... 364
Monthly UNsecured debt repayments....... 598
Amount short for making debt repayments. -234
Personal Balance Sheet Summary
Total assets (things you own)........... 185,000
Total HP & Secured debt................. -190,224
Total Unsecured debt.................... -30,645
Net Assets.............................. -35,869

Making sense of Money

I've put a couple of ideas down, hope they help you. Good luck though x

the_spenders

Hi
Thank you to everyone who has taken time to reply to my messages. I've been thinking over many of the suggestions and I'm really motivated to make cuts in spending + up my income too.

I've finally realised that the clear our debts, we need to get serious about debt repayment. I'm looking into working more/increasing my hours and also to up our income for gift buying via online surveys etc.

We've also had a letter about our mortgage from Northern Rock saying our fixed term comes to an end on May 1st and at this stage, our mortgage will be £200 less per month. We did consider moving to an interest only (to save another £200) but Northern Rock said they aren't in a position to offer anything than the SVR (due to their restricted banking licence).

We're also setting ourselves a goal of trying to clear a good chunk of our debt in the next 5 years.

On with the challenge..

ald65

agree with otterspasm , go onto the old style forum for great ways to save money, think that you could cut your groceries right back and still eat a healthy diet.
you will get loads of help on this forum
good luck x

miss_missy

hi
well done on posting youve taken the first and most important step in clearing your debts by facing up to them and deciding to sort them out
it isnt going to be easy infact its really hard in the beginning but it is possible to sort them out we had more debt than you and less income when we decided to sort ourselves out and this site is what made it happen for us
we didnt go for a dmp in the end but if that is the route you take many people on here say good things about cccs

looking at your soa most things i would say have been said but i will say a couple of things

holiday and entertainment have to go and that will give you 70 straight away

currently you saving for birthdays and christmas 540 a year which is to high you need to stop buying for anyone other than your children you cant afford it.

what age are the children?

if under 4-5 you can get away with buying present during the year in the sales until this year as my son is 5 and has been asking for things i always had xmas shopping done for my children by october and i would say you dont need to spend more than about 100-150 per child at christmas and £50 for birthday which means max of 400 per year which is approx £33 per month

if the children are invited to a birthday party i use some of my shopping money to buy a max of £10 present that is on sale eg the last party my little boy went to i got a lego toy reduce from 18.00 to 9.00 in asda i actually bought a few of them as i know they can be used at some point for parties and if i have one left at christmas my son will get it from santa.

Haircuts is far too high at £25 per month thats £300 per year!!!!!!
when i first started reducing my debts i went to have my hair cut and blow dry twice a year once being christmas for my night out at work and once in the summer and would get it as short as i could and i only go to the local hairdressers which now costs me £21 each time i went 3 times last year
my OH gets his cut at a little barbers and cost him £9 which he does about 3 times a year gets it a short as poss it often looks like hes going to join the army and my little boy has his hair cut for £7 around 3 times a year usually the beginning of new school terms my little girl is only 18 months and at present i have trimmed her hair thats £111 last year so i would try and half your costs

i spend 300 per month on groceries that includes us having a take out 2 times a month and buying nappies etc at the start when are debts were at the highest i spent a lot less though there was no drinks for OH now he gets some drinks for weekend because we can afford it and i rarely spend the full 300 and what is left goes straight to paying credit cards off

hope that helps a bit

miss_missy

if you struggle spending on shopping i agree with op to challenge yourself what i do is set my budget for the month then divide with how many weeks that month so for you lets say for ease its a 4 week month and youve got 400 so that 100 per week
i would with draw 100 and keep it in my shopping purse i only keep shopping money in there no cards nothing else and then i spend for the week at the end of the week what evers left i go straight on to the internet and pay this off one of our credit cards then i with draw that weeks money minus what is left in the purse so if i had 10 left from the previous week id only with draw 90
i work my weeks monday to monday, monday morning i count how much is left in my purse, go online and pay money to the credit card then monday afternoon withdraw my money for that week
i hope all that makes sense

it works for me just something you might want to try

slummymummyof3

I can highly recommend Aldi and Lidl. It takes a bit of getting used to but I haven't been disappointed with anything yet. Make sure you take your own bags though. Even if you just bought your fruit/veg and milk there you would save a considerable sum each month.

I have even been converted from my old faithful Clinique lipsticks to Aldi £1.99 lipstick which I find last far better than the £14.00 Clinique one I normally have.

Aldi toiletries are excellent, as are the chilled meats etc such as sandwich ham.

I find Aldi better than Lidl but do use both. I think you will find the more you try in these supermarkets, the more you will gain confidence in the quality and as such you will increase how much you buy from then. I rarely visit Tesco or Sainsburys anymore.

Do you use a mobile hairdresser or go to a salon?