My Five Year Plan!

PrettyWoman

Hello - been lurking for a while and my lightbulb moment is today as in I have filled in the SOA! Whilst I have huge debts they are all up to date and I have no defaults, arrears, nasty letters or phone calls. I am covering all the monthly payments but due to the HUGE amount of interest being added on each month I feel that I am making no progress, in reality I am as the 2 loans are getting nearer and nearer their completion!

I have entered the details into the snowball calculator and by snowballing correctly I should be debt-free in 57 months! It seem a lifetime away and I am worried about keeping my motivation for this length of time but that's why I am here!

Notes to explain the SOA:

I contribute £600 a month to household running costs which is why I have not entered figures against individual items. My husband covers the rest and we both pay by SO into our JA for this purpose.
Holidays - we have a caravan on a seasonal pitch, which my husband pays the pitch fee. The money I have allocated covers bits of extra food we have at the caravan and entertainment.
Pets - I keep marine fish and am committed to water changes!

I'm happy to answer any other questions about my SOA.

I have consolidated my debts twice (hence the 2 loans) but without cancelling the credit cards and I can definitly agree that consolidation doesn't work. I am not in despair or losing sleep but want to change my job and can't do this until I am debt free - that is quite big motivation on its own actually!

Anyway thanks for reading and here is the statement - Louise

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................ 3333
Partners monthly income after tax....... 0
Benefits................................ 146
Other income............................ 0
Total monthly income.................... 3479
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 390
Clothing................................ 100
Petrol/diesel........................... 50
Road tax................................ 12
Car Insurance........................... 16
Car maintenance (including MOT)......... 16
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 7
Pet insurance/vet bills................. 40
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 30
Emergency fund.......................... 0
Contribution to household expenses...... 600
Total monthly expenses.................. 1351

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
NatWest Personal Loan..........14435.1...328.......0
Barclays Loan..................3290.8....156.7.....0
Virgin Credit Card.............7307.05...210.......35
Capital One....................5307.91...165.......19.16
Barcalycard Visa...............6841.07...155.......19.9
Barclaycard M/C................9465.89...220.......20.9
Egg Credit Card................3772.96...110.......21.9
M&S Credit Card................8873.91...230.......25.9
Total unsecured debts..........59294.69..1574.7....-

Monthly Budget Summary
Total monthly income.................... 3,479
Expenses (including HP & secured debts). 1,351
Available for debt repayments........... 2,128
Monthly UNsecured debt repayments....... 1,574.7
Amount left after debt repayments....... 553.3
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -59,294.69
Net Assets.............................. -59,294.69

Tixy

Hi louise, well done for posting.

I know 57 months may seem like a long time but now you have that date in mind hopefully you can find a few areas to make changes to start bringing that down. And I'm sure people on here can suggest a few ideas as well. And every £10 extra you can pay to your debts each month will start to bring that debt free date nearer.

Glad to hear you are not trying to consolidate (anymore) and that you are up to date with payments, that puts you in a good position.:)

Will see what suggestions I can think of with regards your SoA

PrettyWoman wrote: »

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................ 3333
Partners monthly income after tax....... 0
Benefits................................ 146
Other income............................ 0
Total monthly income.................... 3479
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 390 This is quite high for 4. A lot seem to manage a family of 4 & pets on around £250, maybe you could try to reduce to £350 next month and then see if you could get closer to £300? If you want tips on reducing then the old style board is full of loads of ideas. 2 big changes people can often make is to try the drop a brand challenge and to meal plan for the week ahead before they shop (and then buy only the things they need for that meal plan).
Clothing................................ 100 Can you reduce this for a while? Is this you and the 2 children? Maybe set yourself a challenge to wear what you have and buy nothing new for yourself for 6months? Have you got things in your wardrobe you could sell on, and then only use those funds to buy yourself new things for a while?
Petrol/diesel........................... 50
Road tax................................ 12
Car Insurance........................... 16
Car maintenance (including MOT)......... 16
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 7
Pet insurance/vet bills................. 40
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 30
Emergency fund.......................... 0
Contribution to household expenses...... 600 Have you been through all your household costs in detail? Checked they are as all good deals etc? If you can reduce those at all then you could perhaps both reduce your contribution a bit. Check things like gas & elec are with the best tariff/cheapest supplier, phone & broadband are cheap deals, insurance is competative etc.
Total monthly expenses.................. 1351

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
NatWest Personal Loan..........14435.1...328.......0
Barclays Loan..................3290.8....156.7.....0
Virgin Credit Card.............7307.05...210.......35
Capital One....................5307.91...165.......19.16
Barcalycard Visa...............6841.07...155.......19.9
Barclaycard M/C................9465.89...220.......20.9
Egg Credit Card................3772.96...110.......21.9
M&S Credit Card................8873.91...230.......25.9
Total unsecured debts..........59294.69..1574.7....-

Monthly Budget Summary
Total monthly income.................... 3,479
Expenses (including HP & secured debts). 1,351
Available for debt repayments........... 2,128
Monthly UNsecured debt repayments....... 1,574.7
Amount left after debt repayments....... 553.3
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -59,294.69
Net Assets.............................. -59,294.69

I notice your Virgin APR is really high - are you aware that in future if any try to increase your APRs you are allowed to opt out within 30days of the increase (you have to stop future spending on the card to do so but hoepfully that shouldn't be an issue).
Have you stopped all spending on the cards?
Do you have that £553 'spare' each month and have you been using it to pay more off the debts so far?

What are the limits on the barclays visa and the capital one card? Is there any space between the balance on the limits that you could use? If so you could slow stooze money from the high rate Virgin to a lower apr on one of those cards.:)

PrettyWoman

Thank you for reading and replying.

The £390 on food is for a family of four AND covers breakfast, lunch and tea for 6 extra children Monday to Friday as I work as a childminder! I should try and break it down but I estimate a 65/35 split on the food bill. I buy my childminding groceries with my family groceries as I can take advantage of supermarket deals.

I have a 3 week rolling menu so am very good at only buying what I need and generally the only food thrown away is scrapings off the plates! I don't ever have to clear out of date food out of the fridge before I go shopping.

The clothes budget is for all 4 of us! And most of it is spent on the 2 boys, aged 11 and 9. 2 pairs of school shoes and trainers a year takes a chunk, elder son has to have football boots, winter coats and then a growth spurt - it soon goes. I haven't bought any new clothes for myself or OH this winter. And my younger son wears hand me downs, apart from jeans which my elder son always wears out. The boys are not label conscious and will happily wear stuff from Asda as well as the Gap outlet!

We swithed utilities not long ago and our monthly DD's came down - I tend to keep an eye on this and listen to when Martin says to switch!

I am not currently putting the extra money towards debts because I don't know where it goes! Unnecessary spending, so I am going to keep a spending diary. I suppose my SOA is really the budget I want to stick to.

I'm sure the Virgin APR should be illegal! However, sadly its true. I am near the limit on all my cards so I think its better to just try and get the Virgin one cleared ASAP. I can't remember when the snowball said this one would be up but it said to put all extra money to this one first!

Thanks for your input - Louise

Mikek_3

Fair play to you.
All I can say to you is that it will be worth it,hard but worth it.

My wife and I got out of debt two and a half years ago and nothing will take us back there.

Hope all goes well and you stick at it.Well done for taking charge of your Life.

MFWannabe

Hi Louise
Not much advice i can offer you really regarding any savings; but as you already know you need to find out where the £500 excess is going every month.
Maybe pay an extra £300 per month of this straight off your Virgin card as soon as you get paid; that way it isn't there to be wasted?

dollybeads

Hi Louise, well done for getting your post on here. I like you have a long way to go and alot of debt to clear, in 32 months. And just like you worrying about how I keep motivated for this length of time.

I have found a spending diary is a revelation, its worrying how much I can get through in a week on nothing really that is needed. I have set up a set of spreadsheets to monitor this and various bank accounts to put in the amounts for car maintenance, tax, presents etc. I have never done this before, always put these expenses on CC. But slowly and surely its working. I now also give myself 24 hours to think about things instead of buying, (I still though wrestle seriously with the spending elves and the old way of spending on CCs) but so far have resisted. this is harder than it sounds, but does at least give you a bit of space to consider the consequences of spending before you do that impulse thing.

There is an excellent spreadsheet from Eager Learner on the site that does a hundred and one things for you, tracking accounts, displaying graphs of spends, savings and debts paid off etc. Its free and very useful, will try and find the link for you and post back on here.

Well done for posting, there is an inordinate amount of help and advice on here that makes a real difference really quickly. Love DFW.

Best wishes and I look forward to hearing about your progress.

Dolly x:wave:

[Deleted User]

PrettyWoman wrote: »

Notes to explain the SOA:

I contribute £600 a month to household running costs which is why I have not entered figures against individual items.

If you post here what you are paying for your general household bills people will be able to comment as to whether you are paying reasonable amounts, as maybe you can cut these down and make some savings and then reduce your contribution.


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................ 3333
Partners monthly income after tax....... 0
Benefits................................ 146
Other income............................ 0
Total monthly income.................... 3479
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25 (do you use all the minutes and texts that you get as part of your contract? - if nor drop a tariff or consider switching to PAYG or a SIM only deal)
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 390 (this seems high, although by what you have said you have a lot of mouths to feed - but the old style board may be able to help you shave a little off this)
Clothing................................ 100 (This seems high - try buying essentials only for now, and e-bay what you don't wear, and what your kids have grown out of etc)
Petrol/diesel........................... 50
Road tax................................ 12
Car Insurance........................... 16
Car maintenance (including MOT)......... 16
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 20 (what's this for? is there any saving to be made here?)
Medical (prescriptions, dentist etc).... 7
Pet insurance/vet bills................. 40 (Check comparison sites to ensure this is the best deal)
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30 (try and get things in sales, and when things are on offer etc)
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 30
Emergency fund.......................... 0
Contribution to household expenses...... 600 (as comment above - check you are getting the best deals on everything and that your utilities are on the cheapest tariff for your area/usage)
Total monthly expenses.................. 1351

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

No Secured nor Hire Purchase Debts (I have placed these in the order that you should be paying them off - pay the minimum off everything and then pay your surplus every month towards the first one (costing you the most) and then when it's gone, move on to the next)
Unsecured Debts
Description....................Debt......Monthly...APR
Virgin Credit Card.............7307.05...210.......35
M&S Credit Card................8873.91...230.......25.9
Egg Credit Card................3772.96...110.......21.9
Barclaycard M/C................9465.89...220.......20.9
Barcalycard Visa...............6841.07...155.......19.9
CapitalOne....................5307.91...165.......19.16
NatWest Personal Loan..........14435.1...328.......0
Barclays Loan..................3290.8....156.7.....0

Total unsecured debts..........59294.69..1574.7....-

Monthly Budget Summary
Total monthly income.................... 3,479
Expenses (including HP & secured debts). 1,351
Available for debt repayments........... 2,128
Monthly UNsecured debt repayments....... 1,574.7
Amount left after debt repayments....... 553.3 (Do you actually have this at the end off the month to pay towards your debts? If not keep a spending diary to see where it all goes)
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -59,294.69
Net Assets.............................. -59,294.69

You are in the very good position of having a descent surplus at the end of the month - you will manage it with time, stay motivated as once you start snowballing you will really see progress.

Tixy

Hi Louise
Just a couple of further thoughts after your reply - is your income of £3333 after tax? If not that would be a big chunk of your 'missing' money.
For the purposes of calculating your tax bill do you count the food you spend on the children as a business deduction? if you don't then by doing so you could reduce your tax bill.

Aside from those then a spending diary definitely sounds like the right way forward. Is your OH aware of the level of your debts and that you want to work on reducing them? Its often easier to cut back if you are both working together on the finances.