£30k in debt! Where to start???

chrisfreelander54

Evening everyone,

Heres our story:

Since I First settled down with my now wife in 2000, I have alays gone out getting things on tick and never really bothered to check how much debt we r in untill I had my LBM last month, (what a shock £30k),.

Back in 2007 I worked every possible extra shift there was at work so I could pay cash for our wedding in 2008. (which i managed to do).

As I have managed to motivate myself before to do this I have now decided to do this again. But this time im using the extra cash to clear our debts (Hopefully b4 July 2012 as joined that challenge to help motivate me).

Also been doing the NSD Challange, which worked a treat as I calulated that im spending £250 per year on the works vening machine on coffee alone.

If you check out my sig you can see where we are at with the debt to date.

The main reason is that I now have a family, which is great but everytime that we get time of from work with the kids, they ask where are we going for a day trip, to which I have to tell them we cant afford which breaks my heart, but monies tight. (my own fault, I know). We do go to the park sometimes over the summer but during the winter we take them to the local brewsters and end up spending a fortune on food and drink, after the fun play in the ball pool.

We have also fell into the trap of fast food and delivered take a ways too.

We do holiday but only in the caravan, would love have the money go abroad but its so expensive, these days, esecially as my son is now 3 and we have pay full price for him too.

So im asking for some help on where to cut back and save as i really want this debt gone before i wear myself into the ground working a minimum of a 72 hour week every week.

We also have £600 to put on a debt but not sure which to clear first as the personal loan is the biggest amount per month so thought if this was to go first then we would have loads extra to use on the others, but when using the snaowball calc it recommends paying higest interst 1st.

All advise is appreciated.

Thank in advance CF54

PS. we also have overdrafts totally £1700, and wondered if was best to clear these 1st.

If I think of anything else I will add it as we go, as this post is massive already. Sorry but need to get it out.

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................ 1444.04
Partners monthly income after tax....... 988.04
Benefits................................ 164.76
Other income............................ 118.61
Total monthly income.................... 2715.45
Monthly Expense Details
Mortgage................................ 280
Secured/HP loan repayments.............. 325
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 77
Electricity............................. 30
Gas..................................... 45
Oil..................................... 0
Water rates............................. 36
Telephone (land line)................... 11
Mobile phone............................ 30
TV Licence.............................. 13
Satellite/Cable TV...................... 10
Internet Services....................... 15
Groceries etc. ......................... 220
Clothing................................ 25
Petrol/diesel........................... 100
Road tax................................ 2
Car Insurance........................... 75
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 160
Other child related expenses............ 28
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 12
Contents insurance...................... 12
Life assurance ......................... 25
Other insurance......................... 20
Presents (birthday, christmas etc)...... 10
Haircuts................................ 15
Entertainment........................... 10
Holiday................................. 50
Emergency fund.......................... 0
Total monthly expenses.................. 1656

Assets
Cash.................................... 600
House value (Gross)..................... 80000
Shares and bonds........................ 0
Car(s).................................. 12000
Other assets............................ 10000
Total Assets............................ 102600

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 54000....(280)......3.5
Hire Purchase (HP) debt ...... 7500.....(179)......8<
Caravan........................9500.....(146)......15
Total secured & HP debts...... 71000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
settee.........................2000......57........0
Personal Loan..................8899.09...273.6.....11.9
Catologue......................625.......100.......0
Creditcard.....................2000......50........0
Tools..........................600.......150.......0
Total unsecured debts..........14124.09..630.6.....-

Monthly Budget Summary
Total monthly income.................... 2,715.45
Expenses (including HP & secured debts). 1,656
Available for debt repayments........... 1,059.45
Monthly UNsecured debt repayments....... 630.6
Amount left after debt repayments....... 428.85
Personal Balance Sheet Summary
Total assets (things you own)........... 102,600
Total HP & Secured debt................. -71,000
Total Unsecured debt.................... -14,124.09
Net Assets.............................. 17,475.91
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

SkintGypsy

Start at the beginning of course! One key point would be to work out where and why you overspend. You have a healthy surplus on paper, so with the whole family on board you should be able to make a dent in no time. I would advise going through some bank and credit card statements to see if there are any glaringly obvious patterns, and I would certainly make sure your partner is on board and agree how to move forward.

For the record, things to do with the kids don't have to cost money. They want to do things with you, no matter what they are. My girl loves the park and walks and picnics and painting. As long as we join in!

Address each item on your SOA and be honest with yourself as to what is necessary, luxury and realistic in your circumstances. When you have an idea of your surplus go and do a debt snowball to work out what is costing you most in interest and what to attack first.

Good luck.

chrisfreelander54

Hi Gypsy, thankyou for reply, Ive done the snowball thing and it tell me to start with the caravan loan @15%, but i dont know what the apr is on our overdrafts, i think may be 20%, so wondered if best to pay off ODs first or crack right on to the nity grity and start bangin off one of the loans.

I know i have alot on tick but I always had the attitude as buy it now pay for it over time, siily i know but didnt think it possible to save enough, quick enough to buy what i wanted.
things have chaned im a new me and have finally decided enough is enough.

littlesue

you can take your children to places that dont cost anything check the main site for free days out. Have you got and country side where you live? take them for walks all kids like wellies and puddles take a picinic to eat in thecar my kids complaimed at first but i told them they could always stay at home that normally does the trick.
the more you give kids the more they want but just doing the simple things as being together thats what matters when there young.

chrisfreelander54

Thanks sue will just do that.

THing is with doing 12 hr shifts i dont alway have the energy for liong walks, normally take the easier option.

chrisfreelander54

Gypsy, I noticed in ur sig that u managed to become debt freem within 2 yaers Well done .

Any advice to give on how you managed to clear a similar size debt to ours in such a short time?

MrsTinks

Not free I know, but we joined our local zoo for a year which also allows us access to London Zoo for a year... as little one LOVES it I know we'll get very good value out of it and it's close enough that we can go for just a couple of hours or the day if we want
Might be worth looking at something like that near you?

SkintGypsy

Just one step at a time matey. We had a big loan (consolidation!) that ticked over, then I transferred as much as I could to 0% cards. Paid of any high interest stuff first, and as each debt was cleared just increased payments to 0% cards. I love my egg money manager because I can see all my accounts in a row and gradually seeing the minus figures get less was really good motivation. I also budgetted for all my big yearly expenses in separate savings accounts, also online with egg. Xmas, holidays and car repairs never set me back as there was always money in the pot. Like I said, be realistic with your budget, or you will get frustrated and start to let things slide. The first year was hard, but then it all just became second nature.

Top tip, go through your bank statement and make a spreadsheet of your outgoings. As each one goes out of your account, tick it off. This should ensure you know how much you need to pay everything, including four weeks groceries and petrol, and then you will see how much spare you have. I always left a bit spare per month for treats, but most of the surplus was allocated to debt. Hare and tortoise.

pennypusher

Hi you've got a lot of money tied up in your car, have you thought about selling it and getting a cheaper one? Also your £10000, perhaps you could put that towards the debts so that you have lower payments each month. I would suggest you keep a spending diary, your figures look very tight which might not be realistic. Good luck with getting your debts down.

t4mof

Do you shop at Tesco or have one nearby?? We use Tesco Clubcard deals for most of our Days Out with the kids throughout the year - lots of choice. We even got a day out at Legoland this year, with nothing to pay for admission.

We have The Space Centre at Leicester nearby and get in with Clubcard vouchers and then get an annual pass so then that covers another 2 or 3 days out in a year.

Also check out museums in your local area. Usually free (or nominal fee) and a lot are interactive and aimed at children.

Oh, and FWIW, I'd pay Littlewoods with the £600 you have - it's a catalogue so I'm guessing the interest will be quite high - and you'll have the satisfaction of clearing a debt. You also pay £100 a month to this debt so you can then snowball this onto another debt.

Good Luck!

niccatw

Hi Chris

I agree with t4mof; the catalogue APR's are high and there's nothing like stiking out a debt to motivate you to keep going!

I was also about £30k and only slowlt getting there... I get there much more quickly when I keep a spending diary as I then automatically cut out those bits here and there from the ATM (that's what I noticed most looking through my banks statements for the previos year; I was easily taking out a couple of hundred and din't know where it was going!)

As others have said, it can be a hard slog, so really sit down together as a family and work out what's important to you all. You need to budget in the treats to keep yourselves motivated, but it can be easy to pretend to yourself that your being realistic when really your justifying something to yourself (in my case that's be a weakness for a new outfit every-time I get invited to a wedding, which happens to be lots at the moment! But actualy if I just up my clothes budget slightly every month, I can kee to it much more easily and it suits my lifestyle).

I found it easiest to cut down my food budget. If you've fallen into the trap of takeaways, as you say, then this may be the way to go. I've discovered it's just as quick to make pizza from scratch, and that's it's much less stressful than nipping to *sd* on a Friday night to pick one up! And now have loads of quick, easy rice and pasta dishes that I can throw together. Cheaper and healthier

And you've already found the NSD thread . Those peeps have a wealth of information!