Newbie wants to be debt free looking for help and support

Serialdieter

Hi

I've been reading this forum for a few weeks and have finally waken up that I need to sort out my debt. I've listed everything I can think of. I have an overdraft facility of £1500 (interest costs around £5 per month).

My dh doesn't know about my debts (except Cahoot loan - for car) and for now I can't tell him. Please please please don't ask me to do this, right now it really isn't something I can discuss.

I've tried to do a soa,

Total income £1274.14
Salary £1108
Child Benefit £122.59
Tax Credits £43.55

Outgoings (per month) £522.99

Mortgage £147.50
Life Assurance £9.58
Sickness Insurance £5.32
Council Tax £78
BT - Line Rental £11
Water £16.06
Electricity £71.00
TV Licence £11.99
Pension £39
Life Assurance £5.70
ISA £30
Childs Junior Bond £10
NSPCC £4
Lottery £8.66
White goods insurance £11.52
Car Tax £13.75 (£165 per year)
AA £5.66 (£68 per year)
House Insurance £9.58 (£115 per year)
Car Insurance 16.25 (£195 per year)
Slimming World 18.42 (£4.25 per week)

Debts £15330.66 £367.81 per month

Cahoot Fixed Rate Loan £4981.38 @ 5.6% £127.81 per month til 16.03.2010
Lloyds CC £6087.54 @ 5.8% - life of balance £150 pcm
IF CC £4261.74 @ 4.95% - life of balance £90 pcm

Thanks for reading. I'm hoping someone can give me some tips to reduce my spending. Please don't ask me to not go to slimming world, this has been part of the problem. I was overeating to excess, quite literally spending ???? everyday, I was fat, therefore miserable, therefore comfort ate. I have now lost 12lbs (112lbs to go) but am feeling better about myself, not spending every day and I think this has been important in me having the lightbulb moment.

J x

BlondeHeadOn

Welcome to the boards Serialdieter - great user name by the way! I'm sure one of the brilliant MSE people will be along shortly to help you out, but just something I noticed - you don't seem to have a figure for food in your SOA? I'm sure Slimming World aren't quite so strict as to force you to fast.....

I know you'll find lots of support and help here, so lots of hugs for taking the first step and posting your SOA....

KatrinaC_2

Serialdieter wrote:

Total income £1274.14
Salary £1108
Child Benefit £122.59
Tax Credits £43.55

Outgoings (per month) £522.99

Mortgage £147.50
Life Assurance £9.58 You have two lots of life assurance - is this right? Can you combine the life assurance and the sickness in one cheaper policy?
Sickness Insurance £5.32
Council Tax £78
BT - Line Rental £11
Water £16.06
Electricity £71.00 This is a HUGE bill. Can you reduce it by making sure that everything is turned off?
TV Licence £11.99
Pension £39
Life Assurance £5.70
ISA £30 What are you saving for? This £30 in an ISA is getting you peanuts in interest, whilst you are paying over the odds for your debts. how about using the savings to pay off some of the debts and then when you are free and clear, use the money you were paying to service your debts to re-fill your savings accounts?
Childs Junior Bond £10 See above
NSPCC £4 Stop giving out money to charities now and promise to give twice as much later on
Lottery £8.66 How much have you spent on the lottery over the last decade? How much have you won? Unless you are extremely lucky then the first number will be significantly larger than the second. Stop playing and use the money more wisely
White goods insurance £11.52 Do you actually need this?
Car Tax £13.75 (£165 per year)
AA £5.66 (£68 per year) Again, unless you have an old, unreliable car which you travel thousands of miles in for work, I'd get rid of this. I've had AA cover for three years now and only used them once - I'd have been better off saving the money.
House Insurance £9.58 (£115 per year)
Car Insurance 16.25 (£195 per year) Are your insurance policies the cheapest they can be?
Slimming World 18.42 (£4.25 per week) I know you don't want to quit (and afterlosing 12lb I don't think I'd want to either!) but are their cheaper versions out there?

Debts £15330.66 £367.81 per month

Cahoot Fixed Rate Loan £4981.38 @ 5.6% £127.81 per month til 16.03.2010
Lloyds CC £6087.54 @ 5.8% - life of balance £150 pcm
IF CC £4261.74 @ 4.95% - life of balance £90 pcm

There are some areas missing here - what about food, petrol, going out, birthdays, christmas etc? These tend to be areas in which you can save lots of money. There is also a large difference beween your income and outgoings - almost £300 per month as far as I can see. Where is this going?



I know you don't want to talk about telling your husband, but it would make cutting back easier if you did.

Kat

tyllwyd

Looking at your figures, I'm a bit confused - some I'd guess are split in half between you and your OH, but some don't seem to be. Is the income you've given just for you - how do you manage things between you?

CLAPTON

firstly what does you dh contribute to the spending? and what is his income?

secondly

your income is 1274
spending is 522
leaving 752
debts are 362

leaving spare after debt repayments of a massive 385 which can be used to repay your debts more quickly.....unless of course you find in practice you dont have that much left over.
If you do have this amount free for debt repayment then overpay the debt with the highest APR (Cahoot)
If you dont have this amount of money left over then you need to find out where is all going...start a spending diary to find out the day to day things...food, lunches, haircuts, magazines, optical/dental/medical costs and also what about clothes, holidays, presents, going out, xmas...

jobbingmusician

Well done for your lightbulb moment!

I'm guessing you can't reduce your ISA spending because it's joint - am I right?

Have you thought about applying for a 0% CC and transferring to that? That will mean that you save some interest (you can pay off as much as poss in the interest free period and then transfer back).

The suggestions above for reducing spending are sensible ones (and go and have a look at the Old Style board for domestic hints on money saving!) Now - can you GENERATE any extra money at all? Ebay? Mystery Shopping? Amazon?

Finally - you've generated this debt without DH knowing. Where did the money go? Is it going to be possible to survive and maintain your lifestyle without DH knowing that things have changed?

YOU CAN DO IT! - we just need to know this to make suggestions

Serialdieter

Thank you all for your replies.

Kat - you are right electricity is high - but this is the lowest, we swapped recently through uswitch. We don't have gas, this covers heating, cooking etc.

The 2 lots of life assurance are separate, it would cost more to re-apply while I'm so overweight. One covers the mortgage, the other is additional.

The AA policy was renewed in July for 1 year, so will reconsider this next year. My car is not quite 2 years old, so I probably don't need this.

White goods Insurance - this is for the hob and dishwasher, so does work out quite expensive. Need to look at this one.

I use the ISA savings for birthdays / christmas - I find it easier to have it separate.

I sort of split the bills with dh, except I pay electric & phone and he pays food bills, sky, internet, coal, childcare.

We have a healthshield plan which costs £29 per month, but this comes out of my wages before I get them, so isn't included anywhere.

Bits I missed off.

I pay £20 every 5 weeks to have my haircut.
Petrol costs around £35 per month.
Clothes - around £50 per month for me and the children (2)

I need to do a spending diary, cos now I've written it all down, I have no idea where around £300 per month is going. How embarrasing is that.

Jx

mrs_mug_2

Hiya!

Well done on sorting out your SOA. Just wanted to add a few bits, if that is ok?

Do you really need to have your hair cut every 5 weeks? I've got a short style and manage to stretch it out to between 8 and 11 weeks before I have mine done. This would save you a bit along the way.

Also, your clothes budget is high. I've got 2 children (infants so they grow very quickly). I buy everything I can off ebay and other second hand places. I stick to names I know wash well (next for example) and have managed to kit them both out for the next 18 months on £30. I do not have new clothes. End of. I had my fair share of new clothes in the past, that is how come I'm in debt.
I would also reconsider the AA policy now. You could get a refund and that money would do well going off your debts.

Good luck.

Imelda

hey serialdieter!

Having read through the other posts (great advice as usual) I would definitely advocate the use of a spending diary. Lots of us on here keep one and it is a godsend for me (I even do little charts so i can see where it has all gone and where I should try to cut back the next month- sad I know!).

tyllwyd

First thing - good on you for facing up to your issues with food and doing something positive about it. You have done brilliantly so far and I'm sure that as you feel better about yourself, you will be able to cope better with the financial side of things.

It is a shame that you can't tell your OH about the debts, because otherwise it is something that puts an extra stress on you trying to hide it, but if you don't feel that you can say anything, then that is your decision.

Things don't look all bad - if you can keep your spending diary, that will be the same as your food diary for the dieting, and help you focus on where the money is going and where you can save. And if you review things like the lottery/charity (and maybe your pension, temporarily?), you can find a few pounds extra to throw at the debt.

Good luck with everything!

Serialdieter

I'm guessing you can't reduce your ISA spending because it's joint - am I right?It is just in my name, but I use it for other spending, christmas etc

Have you thought about applying for a 0% CC and transferring to that? That will mean that you save some interest (you can pay off as much as poss in the interest free period and then transfer back).I'll have a look around.

The suggestions above for reducing spending are sensible ones (and go and have a look at the Old Style board for domestic hints on money saving!) Now - can you GENERATE any extra money at all? Ebay? Mystery Shopping? Amazon?I've sold on ebay before, just need to sort out some more stuff. How does Amazon work?

Finally - you've generated this debt without DH knowing. Where did the money go? Is it going to be possible to survive and maintain your lifestyle without DH knowing that things have changed? That is going to be tough.

Do you really need to have your hair cut every 5 weeks? If I leave it any longer it is a disaster. It's almost long enough to put up, so once it is I'm hoping to get away without a cut for an extra couple of weeks. Trouble is it's very thick. I have cut back on this, I now have a mobile hairdresser, compared to paying salon prices which were £35.

Also, your clothes budget is high. I'm not going to buy myself any clothes, I have a wardrobe full of clothes that don't fit but as I lose more weight it will. I've bought of ebay before, so will have another look for the kids.

I would also reconsider the AA policy now. This is for dh too so I don't want to change this atm

I even do little charts so i can see where it has all gone and where I should try to cut back the next monthWell I must be sad too, cos I like the idea of a little chart.

Thanks again. Jx