Over the halfway mark, need advice on what to do next

Rubadub_2

Hi everyone,

I'm a long time site user but a forum noob (previously lurker). I was hoping I could pick the collective brains here on some advice on where to go next in my quest to be debt free.

Whilst at uni I was quite frugal and only started to get into debt when I started working 6 years ago. The seduction of having a regular pay check must have gone to my head and by the time I got a mortgage, got married and had kids I had already become drunk on living as if I had a totally disposable income. 3 years ago I had my lightbulb moment and found myself to be in debt of around £26,000 (not incl. mortgage)

Since then I have started to live within my means, do as much overtime as I can manage and I have used a snowball method to try and get my debts down as much as possible.

My debts/sources of credit so far are:
Bank Overdraft - paid off (just need to keep it out of the red)
Student Loan - paid off
Zopa Loan - £4000 with APR of 7.3%
Virgin Credit Card - £3800 with 0% APR until May '11
Barclaycard - £6400 with 0% APR until Dec' 10
Tesco Credit Card - paid off, not used for past 4 months
Amex Cashback card - used for purchases and always paid off in full at end of the month
Duet Store Card - rarely used but always paid off in full

I'm sure the above looks a bit of a mess and I want to try and tidy things up. I'm not sure what to do next, at the minute I'm trying to concentrate on paying off as much of the Barclaycard as the 0% deal is coming to an end. I'm worried that as I've got a lot of open credit that I might get turned down if I apply for any other 0% balance transfer card. I am conscious that I probably will be faced with the same dilemma again next year when the 0% for the Virgin Card will finish.

Any advice or suggestions from others would be greatly appreciated!

tbourner

I'm sure you've seen people posting their SOA on here before if you've been a long time lurker. If you wouldn't mind:
http://www.makesenseofcards.com/soacalc.html
I know it can take a while to get all the info, and some of it you need to guess and will have to recheck when it gets questioned, but it really helps people on here to give advice.

So far you seem to be doing well though, congrats!

Gemmzie

As said above, an SOA would be very helpful. Aside from that I think if you concentrate on snowballing Barclaycard until December, then contact Tesco (which would have been out of use for 8 months) and see if they'll do you a 0% or Life of Balance transfer. Have you seen the snowball? It's at https://www.whatsthecost.com

Rubadub_2

Thanks, for the replies,

I've completed a SOA as best I could, the other income I've put down is variable overtime, I've put the lowest likely possible as it is not guaranteed income. About £240 of the childcare costs are before income tax and the fees I pay to be a member of various professional bodies are mandatory for work and are therefore untaxed. At the minute I'm using £250 as a snowball (not indicated in SoA). Hope this helps!

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.................... 1

Monthly Income Details
Monthly income after tax................ 2400
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 150
Total monthly income.................... 2550

Monthly Expense Details
Mortgage................................ 550
Secured/HP loan repayments.............. 140
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 27
Gas..................................... 20
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 25
Mobile phone............................ 30
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 17
Groceries etc. ......................... 100
Clothing................................ 15
Petrol/diesel........................... 80
Road tax................................ 18
Car Insurance........................... 51
Car maintenance (including MOT)......... 12
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 320
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings & Contents insurance.......... 45
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 8
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 30
Part Time Education Fees................ 200
Memberships to Professional Groups...... 125
Mortgage Term Insurance................. 25
Total monthly expenses.................. 2045


Assets
Cash.................................... 500
House value (Gross)..................... 155000
Shares and bonds........................ 0
Car(s).................................. 1800
Other assets............................ 6000
Total Assets............................ 163300


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 126000...(550)......4
Secured Debt.................. 4000.....(140)......7.3
Total secured & HP debts...... 130000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin Credit Card.............3800......45........0
Barclaycard....................6400......110.......0
Total unsecured debts..........10200.....155.......-


Monthly Budget Summary
Total monthly income.................... 2,550
Expenses (including HP & secured debts). 2,045
Available for debt repayments........... 505
Monthly UNsecured debt repayments....... 155
Amount left after debt repayments....... 350

Personal Balance Sheet Summary
Total assets (things you own)........... 163,300
Total HP & Secured debt................. -130,000
Total Unsecured debt.................... -10,200
Net Assets.............................. 23,100

tbourner

You seem to be in pretty good shape, with £350 left over after covering everything. Is that accurate or do you find you don't have any money spare?

If it's not accurate then you need to start a spending diary, I strongly disbelieve you have a grocery budget of £100 for a family of 4! There are other places you can save (insurance, entertainment, emergency fund) but if you really do have £350 left each month then I wouldn't bother, just throw it at the highest debt each time until it's gone.

HAYLEY8005

Also i see you have children but have put nothing in benefits for 2 children you must get at least £134 child benefit each month also does the partner work as no income down for him or is his included in your monthly figure

hayley

persian_star

I agree, your SOA looks in very good shape - your could probably pare down a few small things but you'd be cutting out every last treat for not much gain. One thing I've learnt is that when you're in for the long slog, you need a few treats along the way to stop you going completely doolally!

I also use the snowball (full link is http://www.whatsthecost.com/snowball.aspx) and put every tiny in and outgoing into a spreasheet which i update daily, but in the end I've found it's simply a matter of patience, knowing that you're now living within your means and paying off as fast as you can, so you'll get there in the end.

The one thing I would say is - if you're thinking about trying to get more cheap credit for BT's etc, try closing any unused cards first as if you have too much available credit they don't like to give you too much more incase you rush out and blow the lot as soon as you do! But trying to negotiate a new rate on those existing cards first may save the need to apply for totally new credit, so see what they can offer you, as they will obviously want to keep your custom. And if they can't offer you anything but you don't want to close them, just bring your limit right down.

HTH!

ms_london

I would suggest closing a couple of credit cards if you are no longer using them, as even though your balance might be nil, they do still take this into account on your credit score. Also might feel like a sense of achievement if the accounts are closed (??!).

Well done though, you seem to know what you are doing xx

Rubadub_2

Thank you for the kind words of encouragement, it does mean a lot to me. I had a massive wake up call when I knew I was going to be a dad and I had to shape up. I should have said a bit more about my wife's circumstances to clarify things further.

She is currently on maternity leave from her part time job and she has an ongoing DMP from previous life circumstances (only 8 months left to pay). She normally pays the bulk of our entertainment and grocery costs. However our grocery costs have really gone down since we've ditched the supermarket and concentrated on local greengrocers/butchers/deli, etc. My £100 is for the necessary supermarket stuff like nappies, baby wipes, etc. that are easier got from Tescos and the like. I'll try and keep an expense diary for a month though to get a more accurate picture, good suggestion!

Unfortunately for the past year her employers have been really messing around with her wages and some months I've had to use my surplus to help her out. We are currently taking legal action on this which we hope will resolve things quickly as she works in the public sector. If we are successful we are expecting a backpay of around £3-4000. This should more than clear up my wife's DMP and half of the leftover will go into my debts and the rest as emergency money.

My current dilemma is to 1.) close unused lines of credit and open a new 0% balance transfer card around xmas risking getting refused or 2.) risk my chances of asking my unused credit (i.e. Tesco CC) for a new balance transfer deal hoping they wont say no.

ms_london

Contact your creditors first, ask if they could do a balance transfer, see what they say, then call the next one, and basically play them off against each other. If they cannot help, consider closing the account. You don't necessarily need to close ALL of them, but I am sure even closing one or two will make a difference. Can you consider putting money aside for Christmas now, or at least reduce your Christmas budget - there really is no point worrying yourself and getting yourself into a pickle over Christmas (I am not a scrooge but it is quite scary at how people go completely OTT at Christmas and then spend the next year paying it off, it is one day!!!!) Rant over ;0) xx

jamesd

Asking existing cards whether they have any offers on rates, life of balance or balance transfers is an easy and good first thing to do. The worst they will do is say no. Worth risking that for a chance to save some money.

If there's nothing interesting there then there's little to lose with one or two card applications, perhaps one every three months. There's a very rough guideline that yu might reasonably expect to be able get up to about half of your before tax annual income in unsecured credit facilities. How close to that or whether you can go above it depends on your credit score and the particular lender but it does become harder after about that point. Card limits count against this even if you don't currently owe anything on the card.