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Confused about the best way to clear our debt

13

Comments

  • Percy1983
    Percy1983 Posts: 5,244 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Things are looking up it would seem, your car sounds fine and a 2.0 mondeo is hardly a monster but maybe it could got for a diesel.

    What kind of things is your entertainment budget made up of, in my case it was cinema, buying films/video games. I found a cineworld unlimited cars (£13.50 a month) for unlimited films was great and saved me a lot and I now wait for DVD/games to drop in price I don't pay more than £5 for a film and £10 for a game, a bit of patience can go a long way.
    Have my first business premises (+4th business) 01/11/2017
    Quit day job to run 3 businesses 08/02/2017
    Started third business 25/06/2016
    Son born 13/09/2015
    Started a second business 03/08/2013
    Officially the owner of my own business since 13/01/2012
  • Pernicious
    Pernicious Posts: 1,786 Forumite
    Right I have spent a few hours going over a few things...& oh my god have I shocked myself! :eek:

    More accurate SOA for the past few months...

    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.............................. 12
    Satellite/Cable TV...................... 19
    Internet Services....................... 10
    Groceries etc. ......................... 250
    Clothing................................ 70
    Petrol/diesel........................... 100
    Road tax................................ 30
    Car Insurance........................... 108
    Car maintenance (including MOT)......... 10
    Car parking............................. 0
    Other travel............................ 40
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 19
    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................................ 42.5
    Entertainment........................... 300
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 2209.4



    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........0
    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). 2,209.4
    Available for debt repayments........... 152.37
    Monthly UNsecured debt repayments....... 139.59
    Amount left after debt repayments....... 12.78


    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 really, really had underestimated the true cost of days out - I wrote down every "big" thing I have done since June (when we got the house), & included not just ticket prices but travel, food, souvenirs...let's just say that for the amount we have spent we could have gone on a big holiday, the kind I keep dreaming of but would never seriously look at as I'd assume there was no way we could afford it...So...

    My plan of action:-

    1. Cut down the food budget to what I thought it was (£200)
    2. MASSIVE decrease in entertainment - No more gigs/festivals as this is where we have lost hundreds...I didn't factor in travel costs, food/drinks whilst there, souvenir t shirt...I have also been to the cinema more then I thought so may treat us to cinema cards like Percy suggested so we can still regularly go out, but something a lot cheaper then off to London or down the pub!
    3. Decrease clothing expenditure to a max of £20 a month (preferably less) for myself (OH is pretty good on the clothing front). Less gigs will mean less souvenir tees
    4. Change mobile plan when contract expires in Feb
    5. Decrease "Other travel" via less gigs/big days out
    6. Cycle to work when weather is a bit better
    7. Write a monthly budget & stick to it!
    8. Test cut at the college salon - if they can cut my hair ok I will try colour too, it will halve my haircut costs but at the moment I'm worried I'll end up spending more money rectifying the damage they could do!
    9. Sell lots of things on ebay - Going to be strict with myself, if I don't use it within a month it's outta here!

    Things I have already changed but plan to continue:-

    1. No gym membership - Running is free!
    2. Less nights out = less money literally "!!!!ed" away on booze!
    3. No more snowboarding until we are in a much better financial position, it's just too expensive a hobby at the moment :(
    4. Spending Diary - useful for showing the little things that add up

    Any other hints greatly appreciated still, but hopefully this will start making a dent in the debts & once that's over we can finally start saving for our wedding which has been "in the works" (nothing booked yet) for over a year now. Might bring up the lodger subject with the OH again to speed things up :D

    It's really shocking how out of control our spending has actually been, what an eye opener just getting it all down in black & white like this.

    Thanks everyone for the friendly welcome & advice!
    :idea:Debt at July 2012: £12,862.57 :eek:
    :dance:Current Debt: £0 :j
    100% paid off!
    :think: Savings Goal for November 2016: £5000 :cool:
    :D Current Savings: £1176.24 _party_
    23.52% Saved!
  • Hi with your mobile you can always phone up and say you can't afford to pay and ask them to reduce your tarriff, they will usually reduce it a level. Don't forget Orange Wednesdays that's always a cheap night out so long as you don't buy food or drink in there.

    I really think if you pay your Gas and Electricity with Direct Debit that you should increase it now for the winter or if you pay when the bill comes in you need to budget for it and put extra money away, otherwise you will be stuck with a huge bill.
  • Pernicious
    Pernicious Posts: 1,786 Forumite
    Thanks Pennypusher I'm going to try that today, fingers crossed they let me!

    I think rather then giving them more when we may not need too we will just keep putting spare cash into my overdraft as that is costing us the most at the moment, & if we do need to pay more it will have to come out of that...but I'm praying we won't need too!
    :idea:Debt at July 2012: £12,862.57 :eek:
    :dance:Current Debt: £0 :j
    100% paid off!
    :think: Savings Goal for November 2016: £5000 :cool:
    :D Current Savings: £1176.24 _party_
    23.52% Saved!
  • Hi :j

    Just a few thoughts....

    - nights out- there is no reason why you can't still go on the odd night out- if you are happy not drinking then a few soft drinks or lime and soda's are usually pretty cheap- I don't really drink anymore and I still manage a night out once a week (and I don't waste my weekend lying in bed with a hangover.......)

    -food shop- do you shop in Tesco? if so make the most of their clubcard vouchers for rewards for days out etc.

    -days out- keep an eye on the cashback websites for annual memberships- I got a years national trust membership for £12 after cashback- its something I do with my Dad quite a lot and its usually a tenner each time you visit somewhere....

    Haircuts- College salons are very well supervised. I go to mine which is £4.00 for a cut and £12 for highlights and someone is always watching- I think I get better haircuts at the college because they are concentrating on the hair rather than talking about what you are doing at the weekend! Try it- I'm sure it will be fine!

    Good luck!
    Debt free as of 2 October 2009
    Mortgage free as of 27 March 2024
  • Pernicious
    Pernicious Posts: 1,786 Forumite
    Hi Josephine,

    Yes I have been thinking of doing that (saves taxi fare too) but it's all too easy to buy "just a couple" which turn into more. I think the solution is to take out a set amount each time & leave all my bank cards at home so I can't possibly get more out!

    Yes we shop at Tesco, I used most of our vouchers a couple of months ago on breakdown cover as that saved a nice amount! I'm hoping to make just as good use out of the next lot too :)

    I hadn't thought of the annual memberships via cashback sites, I will definitely look into that thank you :T

    I hadn't thought of the college salon like that either, will need to book a haircut soon so I will find out soon how it goes! Thanks for the confidence boost there.
    :idea:Debt at July 2012: £12,862.57 :eek:
    :dance:Current Debt: £0 :j
    100% paid off!
    :think: Savings Goal for November 2016: £5000 :cool:
    :D Current Savings: £1176.24 _party_
    23.52% Saved!
  • ERICS_MUM
    ERICS_MUM Posts: 3,579 Forumite
    Part of the Furniture 1,000 Posts
    A few ways of shaving quite a bit off your shopping bills (sorry, it's turned out to be rather long)

    - switch to own brands or even value brands, some you will be OK with, and some you just won't like and switch back to the more expensive brands. Get to the point where you buy the cheapest brands you are happy with, without paying premium prices for the top brands. The same applies to toiletries, cosmetics and cleaning stuff such as disinfectant, washing powder etc etc.

    - plan your meals for the week and just buy the ingredients you need, don't browse the supermarket aisles and throw anything that catches your eye into the trolley !

    - don't "pop into" the supermarket or corner shop for a couple of bits everyday, you are bound to buy more than you went in for, and most will be luxury non-essential items that you could do without.

    -If you've started buying enough to make up several meals to freeze, make sure you actually defrost and eat those meals, don't keep a full freezer yet buy fresh stuff !

    - do you buy lunch when you are at work, or coffee from those nice italian coffeeshops at £2 a cup ? Take a packed lunch and make your own coffee at work if facilities are available.

    Also, do you buy magazines and newspapers? They soon add up, get your news from the BBC and your fashion/celebrity gossip on-line !

    I would say that most people in the first couple of years with a mortgage have to rein in their social life and social spending (clothes, nights out, Chrismas presents etc) almost completely.

    Don't forget that saving a tenner here and there over a month can add up to a lot, enough to pay a bill.

    What about getting some temporary part time work over the Christmas period - most high street shops take on people at this time, through to the NY sales. Or the royal mail sorting office ? You will pay tax & NI on the whole of the earnings but you would still end up with just under 80% of your earnings. A few hundred pounds would make a dent in your O/D.

    Hope this doesn't sound like a lecture, it's all based on lessons I have learned myself over the years.

    Good luck and don't give up (and kick your hubby into touch).

    Linda xx
  • Pernicious
    Pernicious Posts: 1,786 Forumite
    Hi Linda,

    We already do most of this but planning meals is something we don't really do - thanks we will give this a go! I am terrible for adding "just 1 or 2" more items!

    I have thought about getting a second job but my OH keeps saying not to bother as he will do overtime instead else we'd probably rarely see each other, & despite earning a few hundred extra the taxman would eat up most of it he says.

    Don't worry I don't see any of the comments here as lectures, very sound advice actually :)

    Thanks again!
    :idea:Debt at July 2012: £12,862.57 :eek:
    :dance:Current Debt: £0 :j
    100% paid off!
    :think: Savings Goal for November 2016: £5000 :cool:
    :D Current Savings: £1176.24 _party_
    23.52% Saved!
  • Pernicious
    Pernicious Posts: 1,786 Forumite
    Hi with your mobile you can always phone up and say you can't afford to pay and ask them to reduce your tarriff, they will usually reduce it a level.

    I finally got round to calling about this...& they say they can't do anything until next month for some reason :( So lets hope when I call next month they can give me what I'm after!
    :idea:Debt at July 2012: £12,862.57 :eek:
    :dance:Current Debt: £0 :j
    100% paid off!
    :think: Savings Goal for November 2016: £5000 :cool:
    :D Current Savings: £1176.24 _party_
    23.52% Saved!
  • theoretica
    theoretica Posts: 12,691 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Do work out exactly how much you need your phone and the cheapest tariff or PAYG for it. Sometimes when you change deals the companies make you sign up for another full contract so you want to be armed with knowing exactly what offer you would accept and what the competition's best deals are.

    Do you really need two cars?
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
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