Going into a DMP and hoping to become super thrifty. Any advice would be appreciated.

pixie_princess

Hello,

I've spent most of the day on the website and am feeling really excited about the prospect of eventually becoming debt free. Despite having racked up quite a large debt, I do realise that in many ways I'm quite fortunate as I've got a good job (a middle manager in a state comprehensive school). Until my pay goes up in September though, I'm struggling to make ends meet as I am barely able to service the debts that I have. Here is my situation at present:

Income £1934 after tax

Outgoings:
500 mortgage/rent
100 water
55 gas and electric
11 contents insurance
60 life, critical illness and salary protector
12 tv licence
100 council tax
26 phone
35 mobile
18 sky (it's going to go)
200 HP
200 food
150 petrol
18 Union subsrciption

= 1497

Loan= 238per month (£10,300)
Credit card minimum payments= 75 and 68 (about £5,500 and £3,300)
overdraft= £600 (not paying anything off)
Sofa payment £30 per month (400 owing)

As you can see there's very little left and it's making me miserable. I accept full responsibility for the mess that I find myself in but would like some tips on how to cut back.

At the end of September, my pay will go up to about £34,000 = £2,100 pcm so I'm hoping to be able to up my payments into the Debt Management Plan (which looks to be £200 per month when it's fully set up).

My water bill is massive as I had a water leak that went undetected for two years and raised my payments to £100 pcm instead of about £40. It was a result of a very tiny leak from the toilet bowl which you couldn't see at all but hurt my wallet a lot. It was a new build shared ownership house and I had no idea how much a water bill should be so kept paying. I've since been told that I can't pursue the builders for faulty workmanship and I have no right to claim from the water board. Nevertheless, I have one more month to pay £100 and then the bills should go down.

I'm faced with a couple of options, selling my house and moving in with my boyfriend or keeping my house and getting a lodger. I'd rather live with my boyfriend but then it's a 52 mile round-trip to work. I guess I'll be saving on household costs so I could afford to pay more on petrol.

I look forward to hearing from anyone with any words of wisdom!

Thanks for reading!

the_insider

Do you live alone at the moment? £200 is a heck of a lot for one person for a month. There are three of us and we do it for £100 a month. And you might want to consider getting rid of one of the phones. You are spending £60 per month on phones alone! Are you in a position to cancel or downgrade your contract on the mobile, pay as you go might be more suitable, with all the free minutes and texts you can get for a small top up now. It might be worth seeing if you can reduce your utilities bill as well, as again £55 seems quite high. Have a look on uswitch.com or something similar and see if you can make a saving there. Even a few pounds will help.

All the best with it.

NorthernLas

If you put you income and expenditure into a standard format then you will be able to check that you have filled in all of the categories. Use http://www.makesenseofcards.com/soacalc.html

As already mentioned, you should be able to halve your shopping bill, but you don't have anything in your budget for car tax/insurance/maintenance

You mention debt management plan ... I'm not entirely sure you need one of these. Obviously, it is up to you, but you should be using one of the free charities who are impartial, do not pay anyone to manage your debt (there is a sticky at the top of this forum with 'who to go to for impartial advice')

Starting a spending diary is a great way to find out if your income/expenditure is accurate. It also alerts you to the money spent on coffees and magazines that mount up over the year.
Having a handle on what you spend, reducing your outgoings and increasing your income (via ebay, lodger, mystery shopping, 2nd job) is the idea.

kingfisherblue

I always pay cash - it makes you stop and think whether you really need something. The only exception is direct debits.

bottleofred

Hi Pixie Princess,

As has already been said, your food bills and phone bills are excessive for one person and you should be able to reduce them by taking advantage of bogofs when doing the shopping, cooking things from scratch in batches and freezing the remainder to be used later. You should consider a payg phone which should cost about £10 per month. If you do enter into a dmp, make sure you go with an organisation who don't charge anything, as it means all the money can go into paying the debts. Only you can decide what's best whether taking in a lodger of moving in with your boyfriend, but good luck in getting sorted.