Some debt cleared, please help me stay motivated to clear the rest :-(

lihar

I have sold my house recently and gone into rented accommodation, a big saving as my outgoings for the house purely before were about 850 a month and now are about 467.

Anyway with the profit I made, I cleared my joint overdraft from 2250 down to 300. I also cleared one credit card of £4k, paid £900 towards another one, paid back some money I owed to people. Then I bought myself some new clothes (I hadn't bought any for over a year and it was all work clothes), I hired a van to clear all my rubbish, I got a swimming membership and I put a deposit down for a home study course that I want to do to start a career. However, NOW i have stopped spending and have a wage packet to start my new life with coming my way on friday. However I feel nervous because I still have some debts and I think I need a plan to get on track and get it down to zero. I dont want to waste money any more and feel this paying off should keep momentum and i am now sleeping better than i have done in years, just knowing SOME of it was paid off. I am so lucky to have been able to do it.

I hope I can get some support because I feel worried I can slip into bad spending ways. I know what I am like and I spend when I am a bit emotional or bored.

This is what I still owe (hard calling up and getting actual balances...)

Overdraft1 : 1200 (i am in this most months, so need to start reducing it asap, as it is on my main account and so im paying interest. Also the bank said i need to save up £500 and reduce it in that kind of amounts because just reducing it £50 at a time will just keep leaving marks on my credit rating)

Overdraft 2: 300 (theres about £200 thats used of that, but its an old joint account which i thought I could turn into a single account for myself - it used to have a 2250 overdraft so should i just clear it and shut it as it has a "history"?)

Credit Card 1: (capital one) 2275 (limit 3000)

Credit card 2: (nationwide) 2200 (limit 4000)

Loan to dad: £5,000 (less urgency to pay back)


Outgoings:
Mobile phone £30 (this is using a friends discount and gives me free calls and texts
Rent £375 (my half)
Bills £111 (my half, water, utilities, phonebill, broadband, tv licence, council tax)
My cat: £40 (food, litter, insurance, misc)
Joint cat: £17 (as above)
Car ins: £25
Car petrol: £200 (includes travelling to work and £40 a month for normal travelling - this is probably over a bit, have tried car sharing, no uptakes, tried the train but it keeps making me late)
Fees for overdraft: £30-£40
Loan to my dad: £80 min (i should be paying him £250 a month so this is something i need to keep chipping at for as long as it takes to pay, but the financial obligations with banks are more important)
Food shopping: £100 a month (my half, includes all groceries and cleaning products and top up shops)
Swimming membership: £22 (i use this 5/7 days a week so is very cheap)
Course: £45 (for 5 months)

= £1095, meaning I have just £380 left, which is crazy because I still have to make my minimum payments for my credit cards. How am I going to live and pay off my debts and make overpayments?

Before I thought that I was going to be better off, but now when I look at this I think how did i even MANAGE before?? As this doesnt seem possible. Should I get a second job?

I feel very negative. Also I went and got my credit score done again, last time it was on fair when i had my mortgage and all of my debt. This time it has gone down to POOR?? I have only applied for an alliance and leicester account to get the £100 and use as my billing accoutn, which i got and is working well but that was last october? And other than that I have not directly applied for anything in nearly a year. I make payments on time, I am on the electoral register. I was doing avon but it was not working for me, there is a dispute where they have put 2 late payments on my account which they will have to remove because of their error - could this really make it go from fair to poor, when i was expecting it to go to good? Or what can i do to make it go to good? Reduce down the credit limits on my cards when ive paid £500 increments off? Hellllpppp!! I so badly want to clear my debt and save for a mortgage and i feel like it is probably out of my reach for years. I used to pay £300 a month minimum payments plus £120 for my old house on top when I rented it out and yet I seem still really badly out?

Sorry for this really long thread...

lihar

i bank with natwest and have about 3 accounts with them. One for joint bills, one for the cats, one for my main banking

LittleMoog

Hello
First step, I'd suggest filling out a "statement of affairs" (SOA) using this link: http://www.makesenseofcards.com/soacalc.html
Post it back in this thread and all the helpful people on the boards will be able to advise further. I'd say that if you have £380 spare after covering all your bills, you should be able to make inroads pretty quickly.

Once you've got the full info all your debts (including APR and minimum payments), use this snowball calculator: http://www.whatsthecost.com/login.aspx to work out the fastest way of repaying all your debts.

bargainbetty

Sorry, I know people love their pets, but £57 per month on cats? Start getting cheaper food, shop around for insurance, stop buying them treats and save on litter by teaching them to poo outside!

That is incredible - there are people on here who spend only a little more than that on their own monthly food!

You aren't in such a bad place - the debts will start coming down, and think about how much you have already achieved! Be proud of yourself and think hard about the result you are aiming for, and it will be easier.

Good luck x

lihar

I know what you are saying about the cats, but my cat is an indoor cat and the big bags of litter are just £1.11 each. So it's not that costly. One of my cats has medical problems so is on a special food. The other cat is on food which is on deal. So I am really spending what i have to with them, not more.

Thanks for the other tips.

I am about to post my SOA which will probably show it as being more.

System

Hiya,

I can see that you have fairly large available balances left on a couple of your credit cards - what I do each month, after my monthly payment, is lower my limits to as low as they will go which takes away any temptation to spend on them again. It really works!

I also agree that £57 is a lot to spend on cats. Is it just two you have? I have two and I spend £9 a month on litter and £20 on food. They are indoor cats so use more litter than most, but eat less because they're not as active. I use name brand products too so I could get it down more if I wanted. I'm sure you could shave some off the £57 if you thought about it.

Best of luck!

Red.

lihar

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget SummaryAmount(£)
Total monthly income 1,475
Monthly expenses (incl. HP & secured loans) 1,338.25
Available for debt repayments 136.75
UNsecured debt repayments 115
Amount left after debt repayments 21.75

Personal Balance Sheet SummaryAmount(£)
Total Assets (things you own)850
Total Secured & HP Debt-0
Total Unsecured Debt-4,475
Net Assets-3,625

Household Information
Number of adults in household2
Number of children in household0
Number of cars owned1

Income, Expense, Debt & Asset Details

IncomeAmount(£)
Monthly income after tax 1475
Total monthly income 1475

ExpensesAmount(£)
Mortgage 0
Secured/HP loan payments 0
Rent 375
Management charge (leasehold property) 0
Council tax 55
Electricity 20
Gas 20
Oil 0
Water Rates 11
Telephone (land line) 6
Mobile phone 30
TV Licence 5.5
Satellite/Cable TV 0
Internet services 3.75
Groceries etc. 100
Clothing 20
Petrol/diesel 200
Road tax 0
Car Insurance 45
Car maintenance (including MOT) 0
Car Parking 0
Other travel 12
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 0
Pet Insurance/Vet bills 30
Buildings Insurance 0
Contents Insurance 0
Life Assurance 0
Other Insurance 0
Presents (birthday, christmas etc.) 30
Haircuts 25
Entertainment 150
Holiday 65
Emergency Fund 10
Pet Food/Maintenance 40
Dad loan 85

Total monthly expenses1338.25

Asset DescriptionValue (£)
Car(s) 850
total Assets 850

Comments on the results
You have sufficient monthly income to meet your expenses and your minimum monthly debt repayments with £21.75 left over. You can use this to pay off your debts more quickly or to build/top-up an emergency fund. Whatever your results show, it always pays to seek advice or comments from others. Why not post your SOA details on our Debt Management discussion board or on your preferred discussion forum elsewhere. Thankyou for using the SOA Calculator at www.makesenseofcards.com.

lihar

I am going to let my cats out, but the newer cat is a kitten. So litter costs will go down but then i am paying for worming and flea treatments, so costs will go up. I can downgrade my kitten to unbranded food i guess. I just dont want to feed him total rubbish? And the older cat well his food like i said is a special one. I managed to get insurance for the two of them for £14 which i thought was quite good?

I will definitely reduce down my limits on my cards, if you think it wont affect my credit rating then it's got to be worth doing.

LittleMoog

Hiya,
Couple of things stood out for me:
1) you're not budgeting for road tax/maintenance. If you save 1/12 of the cost each month, you won't struggle to pay it when it falls due
2) you could probably trim the grocery budget a little, by dropping brands, batch cooking and looking for good deals/reduced stuff that can be frozen. Check out the old style board for loads of ideas
3) £150 on entertainment?! That's a lot when you're only just able to make the minimum repayments on your debts. I'd suggest £50, find free/cheap things to do, have friends over to yours etc

If you could trim £40 a month from your groceries to save for tax/mot on the car, you could use the money from the entertainment budget to overpay on credit cards. Check out the snowball calculator at www.whatsthecost.com to see what a difference in the length of time it will take to clear the debts with what you currently pay, and if you paid £75-100 extra a month.

OrangeFairy

I agree with Jules.

Definitely need to budget a bit for the car.

Groceries can definitely be trimmed back. I spend £200 a month for 2 adults and 2 children.

Entertainment of £150 is quite a lot. We budget about £50 for a family of 4. This covers a day out somewhere fun a month and ice creams and parking for picnics.We also use tesco vouchers for our entertainment as get 4x their value. However even if we had this i wouldn't spend £150 a month on the 4 of us.

Good luck. I hope you manage to claw back a bit. Your debts are not too high. So perhaps 6 months of cheap meals and limited 'entertainment' and you could perhaps clear the overdrafts.