Confused about the best way to clear our debt

Pernicious

Well I started the spending diary today - which coincidentally is also payday so that ties in nicely. I think this is definitely going to prove to me how all those little bits add up to a lot.

With regards to ebay I am mostly selling old clothes that either don't fit or I simply don't wear anymore, & shamefully some new clothes that I bought & never ended up wearing... I am certainly learning from that mistake now, better late then never I suppose Do you think the auction or buy it now format would be best for this?

Hmm I see your point about the mortgage Percy, I think I have just been hoping that things will work out rather then facing up to the reality that it could go very, very wrong after our fixed rate is up. For now I will just have to keep an eye on the market & make a decision in 2 years as to our best bet.

I will try posting up my SOA again soon & see if it lets me.

rubywhatashmoo

If you just want to advertise the room to hospital staff, make up a sheet with the details on it and take it to the hospital - put it up on a board there - you can always ask them when they ring if they are actually a doctor and what their hours are likely to be

mazinmouse

"but my OH isn't keen on the idea of a lodger as although we could rent out a room he pointed out some potential problems with that - he often gets up at 5.15am to go to work for 6am, would a lodger be willing to keep the noise down sufficiently for him to get enough sleep? He also worries about the general compatibility with them."

Several years ago when I had to have a lodger I was thinking along the same lines until my best friend said similar to what I'm saying now:

When you advertise for or lodgers you can outline your general requirements and as for whether you get on with them this is something you'd aim to suss out when you interview them. You don't have to just accept whoever turns up first! But you do have to be of a certain disposition and also know/understand yourself first!


My experience when I did rent a room out included one male lodger was a Monday to Thursday (which worked well with the social life I had then) and I hardly knew he was in the house.

Another time, a friend of a friend lodged with me but I was insecure and hugely jealous at there being a much better looking, nicer and lovelier female in the house and so I was a difficult/uncommunicative landlady. I know better now and I still feel guilty even after 20 yrs).

Having lodgers does not have to be permanent solution but it can be an excellent source of extra income in the shorter term. Good Luck with everything.

ms_london

Hello & welcome to MSE!

Those unexpected bills are annoying, but if you set up a proper budget taking into account these emergencies, in the long run you'll have some money put aside.

Also check your bank accounts every few days, this way you'll spot anything untoward and be able to manage your money a bit better..

If you post your SOA we'll be able to give a bit more specific advice as what seems like a normal expenditure for you may not be.

xx

Pernicious

Our SOA:-

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1211.77
Partners monthly income after tax....... 1150
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2361.77

Monthly Expense Details
Mortgage................................ 828.4
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 136
Electricity............................. 25
Gas..................................... 25
Oil..................................... 0
Water rates............................. 32
Telephone (land line)................... 7.5
Mobile phone............................ 50
TV Licence.............................. 0
Satellite/Cable TV...................... 19
Internet Services....................... 10
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 65
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 13
Pet insurance/vet bills................. 30
Buildings insurance..................... 12.5
Contents insurance...................... 12.5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 40
Entertainment........................... 249
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1894.9


Assets
Cash.................................... 0
House value (Gross)..................... 152000
Shares and bonds........................ 0
Car(s).................................. 6000
Other assets............................ 0
Total Assets............................ 158000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 136400...(828.4)....6.49
Total secured & HP debts...... 136400....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Overdraft......................2215.4....23.59.....19.8
Credit card....................2941.02...66........15.76
Parents........................1157......50........0
Total unsecured debts..........6313.42...139.59....-


Monthly Budget Summary
Total monthly income.................... 2,361.77
Expenses (including HP & secured debts). 1,894.9
Available for debt repayments........... 466.87
Monthly UNsecured debt repayments....... 139.59
Amount left after debt repayments....... 327.28

Personal Balance Sheet Summary
Total assets (things you own)........... 158,000
Total HP & Secured debt................. -136,400
Total Unsecured debt.................... -6,313.42
Net Assets.............................. 15,286.58

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

I have only put my OH's basic salary as overtime is not guaranteed, although fortunately his latest overtime earnings will go towards Xmas & £200 towards my overdraft

The TV licence & car tax boxes are blank as we have paid them for this year, however I am now fully aware that I need to start saving for them...

The car insurance is again so low as I used the credit card to pay mine, whereas my OH's is being paid monthly, but again I am all too aware we need to start saving for this/start paying monthly for me too.

I've also left out clothes as that's a hard one...used to spend an awful lot on clothes (hence why I am going to get ebaying them :j ) but even after really cutting down I am not 100% sure how much I spend...but I don't think it's more then £20 a month.

I must have underestimated on entertainment & just little bits & bobs adding up to a lot because we most definitely do not have £466.87 available for debt repayments else I wouldn't be here! I think perhaps we spend a bit more on food too. Hopefully the spending diary will reveal all of this soon!

I think my trouble is I'm so used to not having very many regular commitments (small amount of rent to my parents, mobile phone bill, etc) that I just used to pay off big expenditures like my car insurance when it was due & accept that that month I would be short of cash for fun things, but now I simply can't do that as the mortgage etc eats up that sort of money.

Can anyone advise me where I can cut back easily so I will have more money to save for these sorts of bills & also to get rid of this debt quicker so we don't end up in trouble?

DVardysShadow

Pernicious wrote: »

Entertainment........................... 249


I must have underestimated on entertainment

:eek::eek::eek: £249/month entertainment??? And you think you have underestimated? Plenty of scope here to rein your expenditure in.

Plus you should include insurance and TV licence, even though you have paid for them.

SJ1

It's worth going back through a few months worth of bank statments and credit cards. I did this and was really shocked about how much more we spent on food than I thought we did and I have been able to cut back in this area.

I do a spending diary every month and it does really help although my November one is looking a bit awful due to half term costs!

Good luck, my advice is write everything down - it really helps seeing where it is all going.

SJ

pennypusher

Hi, your Gas and Electricity looks low but will it be that low in winter, I'm thinking that if it's that much now you will need to increase how much you allow for that. Put your mobiles on payg, you should be able to keep them down to £10 each per month.

If you want to save even more get rid of satellite and get freeview. Try and make sure your trips in the cars are essential perhaps you could double up and do two trips together to save petrol or not use the cars so much. You could sell one or both and get older ones and free up some money to pay off the credit cards and then save up for better ones when you have paid off your debts. £40 for haircuts per month is a lot - can you find a cheaper way of getting your hair done? Can you volunteer as a model and get your hair done by a trainee who is supervised while she is doing it or find a mobile hairdresser to come to your house, that's usually cheaper.

Entertainment you know you can cut back on. Orange Wednesday is always popular.

Your credit card you say is on 0% but you have put 15.76% interest on it which has confused me. Concentrate on paying off the ones with the highest interest rate first. There are lots of things you can do - see how creative you can be - good luck.

Pernicious

DVardysShadow wrote: »

:eek::eek::eek: £249/month entertainment??? And you think you have underestimated? Plenty of scope here to rein your expenditure in.

Plus you should include insurance and TV licence, even though you have paid for them.

I didn't think £249 was that much for 2 people for a whole month...:(

Here's a breakdown:-

• £49 taekwon-do (I used to spend £35 a month on gym fees as well as this but have since packed that in & started running)
• £60 each on nights out in town
• £15 total cinema
• Remaining for big days out - This is what I am putting a stop to now & probably where a lot of that unexplained cash has been going!

Ok sorry I will do an updated one tomorrow evening including those things (off to bed in a sec). Thanks for your input though, out of interest how much do you spend under the entertainment category if you don't mind me asking?

Pernicious

pennypusher wrote: »

Hi, your Gas and Electricity looks low but will it be that low in winter, I'm thinking that if it's that much now you will need to increase how much you allow for that. Put your mobiles on payg, you should be able to keep them down to £10 each per month.

If you want to save even more get rid of satellite and get freeview. Try and make sure your trips in the cars are essential perhaps you could double up and do two trips together to save petrol or not use the cars so much. You could sell one or both and get older ones and free up some money to pay off the credit cards and then save up for better ones when you have paid off your debts. £40 for haircuts per month is a lot - can you find a cheaper way of getting your hair done? Can you volunteer as a model and get your hair done by a trainee who is supervised while she is doing it or find a mobile hairdresser to come to your house, that's usually cheaper.

Entertainment you know you can cut back on. Orange Wednesday is always popular.

Your credit card you say is on 0% but you have put 15.76% interest on it which has confused me. Concentrate on paying off the ones with the highest interest rate first. There are lots of things you can do - see how creative you can be - good luck.

We've just switched energy supplier so I was hoping we could make a saving there, we have a very energy efficient house luckily as it was only built 7 years ago so I would assume our bills won't be quite as high as others in that department.

I would love to cut down on my mobile bill but (stupidly) I signed up to an 18 month contract...& am still tied in until February My OH's phone bill is £15 a month at the moment but looks like he will be able to save another £5 a month by switching, if I can convince him to get round to it! (He half heartedly looked at the Tesco mobile website this evening & said he would look around some more later lol).

Again with Sky we signed a 12 month contract, so have another 8 months or so to go...is it worth paying the charges to break these contracts do you think?

My car is fairly old as it is, I don't know if I'd be able to get older whilst retaining reliability etc, plus in the grand scheme of things it's fairly cheap to run, just a little 1.4 peugeot 206. My OH keeps bringing up about switching to a cheaper car (he has a 2.0 ford mondeo) but again, never seems to get round to actually doing anything about it despite me trying to help. I was planning on cycling to work & back when the weather is a bit nicer but I can't bring myself to do it when it's pouring with rain & pitch black!

With the haircuts I was thinking about going to the local college as they have their own trainee salon which is supervised, but I have had some pretty bad haircuts in the past & have always stuck with my regular hairdresser since finding her as she's so good! I do get my hair highlighted too which isn't helping the finances but I don't do a very good job when I try to do it myself...Will have to research the college prices more I guess & pray no one hacks it all off or turns me yellow!

Sorry it is currently on 0% but only until Xmas eve, which is why I'm worrying & I need to do something about it now before it's out of control.

Thanks everyone for your input - keeping up with the spending diary but so far not a whole lot has been shown. Hopefully having more self control with regards to "fun" things will stick & I won't fall into using "just one more" excuses again.