Converting Money SPENDING Expert to Money SAVING Expert! The debt-busting mission!

MoneySpendingExpert2011

Hi all,

Been lurking on this website for a while now, finally decided to take my head out of the sand and do something about my debts.

Debts had initially been accumulated over the years due to mental health issues and gambling. I managed to pay down most of it due to my previous LBM but it wasn't really that bright. Issues in my life led to deterioration in the last 6 months or so, and I ended up accumulating vast majority of the debt again in the last 6 months.

I have finally realised that it is unsustainable and, based on the valuable advice I have picked up on here (thanks), have tried to take steps to address it. I have transferred as much debt as I could to 0%. It's still going to take me a good portion of 5 years to get out of the hole that I have dug for myself! I intend to repay every single penny back (without cutting corners). If there is anything I have missed out on the SOA below please let me know.

On a related note, the snowball calculator advised me to overpay on the MBNA debt, but this can't be right as the MBNA debt is at 0%!

I am seeking help for my addiction. I have had enough support from family and can not ask for any more financial help as they just can't afford to help me.

The road ahead is going to be a long hard one, I look forward any advice that you may have.

If you need any more information before you can give advice, please let me know.

Thanks a lot!

Spending Expert!

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1676
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1676

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 450 (my rent is all inclusive)
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 15 (on PAYG, normally top up once every 2 months)
TV Licence.............................. 0 (included in the rent)
Satellite/Cable TV...................... 0
Internet Services....................... 0 (included in the rent)
Groceries etc. ......................... 125
Clothing................................ 15 (estimated for things like shoes etc)
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 226 (travelcard, live in London zone 8 and work in Zone 1)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 25 (asthmatic, wear glasses and terrible teeth)
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 (guesstimate)
Haircuts................................ 10 (prolong it as much as I can)
Entertainment........................... 35 (try to keep it to a minimum)
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 921


Assets
Cash.................................... 250
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 250

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA (0% BT 18m)...............5600......55........0 (shifted debt recently)
Natwest (0% BT 16m)............2300......50........0 (shifted debt recently)
Barclayloan....................8500......375.......18.9
Family Loan....................7000......0.........0 (need to start paying this off soon)
Natwest CC.....................500.......50........19.9
Barclaycard....................800.......50........18.9
Total unsecured debts..........24700.....580.......-


Monthly Budget Summary
Total monthly income.................... 1,676
Expenses (including HP & secured debts). 921
Available for debt repayments........... 755
Monthly UNsecured debt repayments....... 580
Amount left after debt repayments....... 175

Personal Balance Sheet Summary
Total assets (things you own)........... 250
Total HP & Secured debt................. -0
Total Unsecured debt.................... -24,700
Net Assets.............................. -24,450

Tixy

Hi and welcome
Well done for facing up to things and the steps you have taken.

MoneySpendingExpert2011 wrote: »

On a related note, the snowball calculator advised me to overpay on the MBNA debt, but this can't be right as the MBNA debt is at 0%!
did you put in all the APRs after the promo periods etc? if you did and they are accurate it may be that the MBNA card APR is so high after the 0% that it still works out cheaper overall if you pay this off first.

I am seeking help for my addiction. I have had enough support from family and can not ask for any more financial help as they just can't afford to help me. Good, excellent - there is a thread on here regarding gambling addiction which might be useful if you are ever tempted and want to talk to people who know how you feel - will post a link.

Can't think of any real comments on your SoA, all your costs look very reasonable and low. Do you find that you have the £175 left for extra repayments? or perhaps you won't know for a month or so? If you struggle to find the £175 to pay extra then try keeping a spending diary.
Only other thought is could you increase your income at all, overtime or a second job? (obviously not through gambling), or do you have anything you could sell to put towards your debts.

Good luck

ViolaLass

Do/can you cook? We feed two of us on £150 a month and eat well so I would have thought you could lose £50 from your grocery bill.

MoneySpendingExpert2011

Thanks for the welcome quick reply!

I did put down the post promo rate. All my debt seem to be in a similar sort of range 18.9 - 19.9%, that's why I was surprised. Thought it would make more sense to overpay on the Barclayloan at the moment as it is the biggest and accumulating one of the highest interest rates!

Tixy wrote: »

Do you find that you have the £175 left for extra repayments? or perhaps you won't know for a month or so? If you struggle to find the £175 to pay extra then try keeping a spending diary.

Pre-gambling orgy, I did as I was able to pay down my debt initially. Then the demons took over and the rest is history. I have been notoriously keeping track of my monies through Microsoft Money Manager! (Thanks for the tip though)

Tixy wrote: »

Only other thought is could you increase your income at all, overtime or a second job? (obviously not through gambling), or do you have anything you could sell to put towards your debts.

I was thinking about the same, any ideas how I can go about doing this? I tend to work quite long hours, working additional hours is very much expected in my job but there isn't any overtime paid. Nothing to sell!

Thanks for the reply!

MoneySpendingExpert2011

ViolaLass wrote: »

Do/can you cook? We feed two of us on £150 a month and eat well so I would have thought you could lose £50 from your grocery bill.

Not a very good cook but I do try to cook as often as I can. Been working ridiculous hours lately (without any overtime pay). My grocery bill includes things like toiletries, cleaning stuff etc

Tixy

You could try looking on the up your income board for ideas?
I suppose there tends to be a couple of main choices for a second job, something unskilled with part time hours eg at the weekend (bar work? waitressing? shelf stacking etc) or alternatively using what skills you have from your main job to do something (declaring it as a business/paying tax and ensuring you don't break you employment terms) - eg for someone who works in computing offering computing repairs to indivduals at the weekend, or for an accountant maybe offering bookkeeping services to small business outside of work hours.

MoneySpendingExpert2011

Tixy wrote: »

You could try looking on the up your income board for ideas?
I suppose there tends to be a couple of main choices for a second job, something unskilled with part time hours eg at the weekend (bar work? waitressing? shelf stacking etc) or alternatively using what skills you have from your main job to do something (declaring it as a business/paying tax and ensuring you don't break you employment terms) - eg for someone who works in computing offering computing repairs to indivduals at the weekend, or for an accountant maybe offering bookkeeping services to small business outside of work hours.

Thanks, will have a look at it.

Million_Percent

Could you begin repaying your family loan in kind rather than in cash? I leant my in-laws some money a while back and we have agreed that rather than returning the cash my father in law now does my gardening and my mother in law has occasionally cleaned our house. Could you offer to do stuff for your family like gardening, DIY, cleaning etc. If you do, just make sure you agree in advance how much money each task will be worth and keep a record of everything to avoid any disagreements about what was done and when. Admittedly, it is unlikely you will be able to pay back 7K like this but the odd £50 here and there will soon add up.

Otherwise your SOA looks manageable for now. You just need to be very disciplined and pay off as much as possible while you have the 0% rates. Presumably the loan is a fixed monthly repayment? I would direct as much spare cash as possible at the natwest cc and barclaycard as these are the highest rates plus, as they are relatively small balances, you should be able to pay them off realtively quickly and that will help motivate you. It is very satisfying to be able to pay off and close a CC account and then chop the card into a hundred tiny pieces!

Good luck and don't give up, you will get there. I had a similar amount of debt back in 2008, I now owe just under 10K. It's slow going but worth it.

MoneySpendingExpert2011

Thanks MP

Million_Percent wrote: »

Could you begin repaying your family loan in kind rather than in cash? I leant my in-laws some money a while back and we have agreed that rather than returning the cash my father in law now does my gardening and my mother in law has occasionally cleaned our house. Could you offer to do stuff for your family like gardening, DIY, cleaning etc. If you do, just make sure you agree in advance how much money each task will be worth and keep a record of everything to avoid any disagreements about what was done and when. Admittedly, it is unlikely you will be able to pay back 7K like this but the odd £50 here and there will soon add up.

That is a really good idea. Unfortunately, I don't think it would be very sensible of me to do something like that. As some of it is gambling related (directly or indirectly), I want to pay back every single penny of it so hopefully it will teach me a lesson. However, as they are not charging me interest, I will commit myself to helping them out regularly instead.

Million_Percent wrote: »

Otherwise your SOA looks manageable for now. You just need to be very disciplined and pay off as much as possible while you have the 0% rates.

Indeed, I don't think I will manage to pay it all off in time but am hoping to have made a dent and be able to shift when the 0% ends.

Million_Percent wrote: »

Presumably the loan is a fixed monthly repayment?

The loan is indeed fixed rate. However, it is a recent loan so am allowed to overpay and the penalty is reasonable - 30 day interest on the overpayment.

Million_Percent wrote: »

I would direct as much spare cash as possible at the natwest cc and barclaycard as these are the highest rates plus, as they are relatively small balances, you should be able to pay them off realtively quickly and that will help motivate you. It is very satisfying to be able to pay off and close a CC account and then chop the card into a hundred tiny pieces!

That is a good idea. I will clear these first and then divert the spare cash to the loan and then Natwest BT / MBNA cards.

Million_Percent wrote: »

Good luck and don't give up, you will get there. I had a similar amount of debt back in 2008, I now owe just under 10K. It's slow going but worth it.

Well done! That is quite impressive.

I am just going to have to put my head down and chip away bit by bit.

[Deleted User]

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1

Monthly Income Details
Monthly income after tax................ 1676
Total monthly income.................... 1676

Monthly Expense Details
Rent.................................... 450 (my rent is all inclusive)
Mobile phone............................ 15 (on PAYG, normally top up once every 2 months)THERE ARE SOME GOOD £10 PM DEALS TO BE HAD AT THE MOMENT (CHECK TESCO MOBILE PAYG, AND VODAPHONE PAY MONTHLY, SIM ONLY)
TV Licence.............................. 0 (included in the rent)
Internet Services....................... 0 (included in the rent) MAKE THE MOST OF THIS FOR PHONE CALLS - SKYPE/VOIP CHEAP ETC
Groceries etc. ......................... 125 TRY REDUCING THIS SLOWLY, MAYBE BY £5 OR £10 PM UNTIL YOU GET TO BETWEEN £75-£100. START LEARNING TO COOK, TAKE PACKED LUNCHES TO WORK, AND MAKE SURE YOU KEEP SNACKS IN YOUR BAG OR AT THE OFFICE (SO YOU'RE NOT TEMPTED INTO BUYING SNACKS FROM EXPENSIVE VENDING MACHIINES OR SIMILAR)
Clothing................................ 15 (estimated for things like shoes etc)
Other travel............................ 226 (travelcard, live in London zone 8 and work in Zone 1)IT SOUNDS A LONG DISTANCE CROSSING 8 ZONES, SO DON'T KNOW HOW WORKABLE MY NEXT SUGGESTION WOULD BE, BUT WOULD CYCLING BE AN OPTION - EVEN ONLY OVER THE SUMMER MONTHS?
Medical (prescriptions, dentist etc).... 25 (asthmatic, wear glasses and terrible teeth)NOT SURE OF THE BREAKDOWN OF THESE COSTS, BUT IF YOU ARE SPENDING A LOT ON PRESCRIPTIONS, THEN INVESTIGATE PRE-PAYMENT CERTIFICATE AS IT MIGHT WORK OUT CHEAPER
Presents (birthday, christmas etc)...... 20 (guesstimate) - A SLOW PROCESS, BUT TRY JOINING SOME OF THE SURVEY SITES AND SAVE UP THE VOUCHERS FOR THINGS LIKE X-MAS AND BIRTHDAYS, TRY ALSO TO USE CASHBACK SITES (EG QUIDCO) WHEN SHOPPING, AND KEEP AN EYE ON THE GRAD IT BOARD FOR SUPER SPECIAL OFFERS
Haircuts................................ 10 (prolong it as much as I can)SEE IF THESE'S A COLLEGE NEARBY WHERE THEY TRAIN HAIRDRESSERS, AND SEE IF YOU CAN GET FREE/REALLY CHEAP CUTS FROM TRAINEES
Entertainment........................... 35 (try to keep it to a minimum)
Total monthly expenses.................. 921


Assets
Cash.................................... 250ARE YOU KEEPING THIS AS AN EMERGENCY FUND? OR ARE YOU PLANNING ON PAYING THIS TOWARDS DEBTS?
Total Assets............................ 250

Unsecured Debts
Description....................Debt......Monthly...APR
1)Natwest CC.....................500.......50........19.9 THIS ONE SHOULD BE YOUR OVERPAYMENT PRIORITY - WHEN THIS IS PAID OFF MOVE OVERPAYMENTS TO THE NEXT DEBT - (IN APPROX. 3 MONTHS)
2)Barclaycard...............800.......50........18.9 (YOU WILL THEN BE ABLE TO OVERPAY THIS DEBTS BY £175 SURPLUS + £50 PREVIOUS MINIMUM PAYMENT (£225) TO THIS DEBT
3?)barclayloan.................8500......375.......18.9 - WHEN YOU GET HERE REASSESS THE SITUATION WEIGHING UP OVERPAYING THIS (INCLUDING ANY PENALTY CHARGES) AGAINST WHAT THE NEW RATES ON THE PREVIOUS 0% CARDS ARE/WILL BE (INCLUDING THE ABILITY TO RE-TRANSFER TO NEW 0% CARDS)
4)Natwest (0% BT 16m)............2300......50........0 (shifted debt recently)IN 16 MONTHS THIS WILL BE £1500 - DO YOU KNOW WHAT THE RATE WILL BE THEN?
5) MBNA (0% BT 18m)...............5600......55........0 (shifted debt recently) IN 18 MONTHS THE BALANCE WILL BE £4610 - DO YOU KNOW WHAT THE INTEREST RATE WILL BE THEN?
? 6) Family Loan....................7000......0.........0 (need to start paying this off soon)
Total unsecured debts..........24700.....580.......-

Monthly Budget Summary
Total monthly income.................... 1,676
Expenses (including HP & secured debts). 921
Available for debt repayments........... 755
Monthly UNsecured debt repayments....... 580
Amount left after debt repayments....... 175 IT IS EXCELLENT THAT YOU HAVE SUCH A GOOD SURPLUS, JUST ENSURE THAT YOUR SOA ALLOWS YOU TO HAVE A LIFE (EVEN JUST A FRUGAL ONE), AS IF YOU ARE FORCING YOURSELF TO LIVE TOO FRUGALLY, THEN IT IS UNLIKELY TO BE SUSTAINABLE, AND YOU MIGHT BE SETTING YOURSELF UP TO FAIL WITHOUT GIVING YOURSELF A FAIR CHANCE

Personal Balance Sheet Summary
Total assets (things you own)........... 250
Total HP & Secured debt................. -0
Total Unsecured debt.................... -24,700
Net Assets.............................. -24,450

Hi, I have made some commennts above (in CAPS - but not shouting, just to make it clearer where I have added comment). I hope at least some of them are of use to you.

Links that might interest you:

1) Up your income: http://forums.moneysavingexpert.com/forumdisplay.php?f=145

2) (Ex) Gambling support thread: https://forums.moneysavingexpert.com/discussion/1090463

3) Family meal planner: http://www.cheap-family-recipes.org.uk/planners.html

(The meals and recepies can be adapted for one - or save any extra cooked in the freezer)

HTH

D9

MoneySpendingExpert2011

Hi D9,

Thank you for your comments.

Phone - I have got an old O2 SIM (genie) which gives me unlimited texts per month. I top-up £10 - £15 every couple of months to keep the odd calls etc going.

Skype / VOIP - Something I will definitely look into.

Cycling to work - would be amazing if I could, think it might be asking too much of an amateur cyclist to cycle 25 miles.

Prescription - will definitely look into pre-payment certificate as I have monthly prescriptions. Hoping to convince the GP to give me 3 months supply but she is proving difficult to deal with.

Presents - will definitely look into the survey / cashback sites.

Haircut - will look into it, might even get me to leave work early once in a while.

As for your other comments:

Domino9 wrote: »

Hi, I have made some commennts above (in CAPS - but not shouting, just to make it clearer where I have added comment). I hope at least some of them are of use to you.

I totally understand, and really appreciate your comments.

Thanks for the links, the meal planner will prove invaluable. Its amazing that its got great veggie options as well!

Thanks for the useful comments