Pushing in the right direction

renegadia

Hey Everybody!

I've been living in my overdraft for as long as I can remember and always figured I'd climb out of it soon, but then that day never comes and other things get in the way, like introductory credit card rates etc. I think I've been in some sort of debt for about 10 years now, ever since I picked my first Visa credit card up as soon as I turned 18 and went a bit mad with it. I never thought I was in any trouble though, because although I was in debt, my debts were never spiralling out of control too much and on the rare occaisions that they did, I managed to pick myself back up out of them. There was one time when I did sink a little too far than I liked so I decided to become a joint tenant with my mother when a social housing opportunity came up, which has really helped with keeping me level and has given me a bit of security if things go pear-shaped in the future, that I'll always have a tenanted roof over my head.

A couple of years ago I decided to do something about this treading water thing I was doing and I started picking up the MSE email and applying the relevant topics. Admittedly I never spent much, if any, time in DFW or indeed on the forums, because I guess I was of the mindset that I was never really in trouble.

Anyway, I've had a dream for a while about getting hold of a VW campervan, being a hippy and wandering about Europe in it!! However in today's climate you need a fair amount of savings for that goal.

I've realised that the way I'm going about things, whilst some of it is good I imagine, I'm doing it in the wrong order and that it's taking too long (I have no patience), so I've decided to do a budget and a SOA and to not fight this thing on my own.

I was surprised after the budget that I was underspending, whilst it didn't feel like I was short every month, I didn't think I would have that much spare cash every month so I'm wondering if I've been accurate. Either that or I'm unknowingly spending! Anyway, it now follows:

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 860.90
Income from Self Employment (before tax). . . . . . . . . . . . . . . . . . . . 0.00
State Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Pension / Annuity Payout. . . . . . . . . . . . . . . . . . . . . . . . 0.00
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 0.00
Income From Savings & Investments . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gifts From Family / Friends . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Monthly Expense Details

In Your Home

Mobile Phone(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.48 (O2, contract runs out 01/12)
TV Licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Internet/Home Phone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.73 (Tiscali (TalkTalk), runs out 04/12)
Cleaning Products/Cleaner . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Garden Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Household Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Council Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Overdraft Cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.87 (NatWest, 18.28% APR, £1,150 limit)
Bank Account Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Home Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130.00
Plumbing/Boiler Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage Payment Protection . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Food and Household Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Drinks for Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.00

Motoring & Public Transport

Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.00
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.92 (pre-2001 car, upwards of 1.4l engine limit)
Car Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.77 (Just renewed, using MSE system)
Car Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Rail/Bus/Taxi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Breakdown Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.92 (Just renewed, Quoteline, inc. Euro cover)

Debt Repayments

Credit Card Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304.17
(Natwest Platinum - £787.32/£1,650 - 0% til 01/12 becoming 19.9%, 19.9% Purchases)
(Virgin Money - £737.22/£1,500 - of that, £584.75 is 0% til 04/12, £126.76 is 0% til 01/12, £25.71 is 18.9%,
0% Purchases until 10/11, then 18.9%)
Hire Purchase Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Personal Loan Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car Loan Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Savings & Investments

Pension Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Buying Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mini Cash ISAs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80.00 (Halifax ISA, 3.00% Gross PA)
Lump Sum Saving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Regular Saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Family

Pet Food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.00
School Trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School Meals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pocket Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Nappies/Baby Extras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Laundry/Dry Cleaning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Children's Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Baby Sitting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Childcare/Play Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Travel Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Entertainment

Satellite/Digital TV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family Days Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.67
Cinema/Theatre Trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Books/Music/Films/Computers . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big Days Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Shopping for Fun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Hobbies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
IT/Computing (eg Anti-virus etc). . . . . . . . . . . . . . . . . . . . . . . . 0.00
DVD Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Drinking Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Eating Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Clothes, Health & Beauty

Complimentary Therapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Optical Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.67
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.60
Beauty Treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Healthcare Cashplans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dental Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Medical Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Fitness/Sports/Gym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Work Clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New Children's Clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New Clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Education & Courses

University Tuition Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Your Courses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Big One Offs

Funeral Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Wedding Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Sofa/Kitchen/TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Winter Holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Summer Holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Odds & Sods

Newspapers & Magazines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Tax & NI Provisions (self-employed only). . . . . . . . . . . . . . . . . . . . 0.00
Regular Charity Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Meals at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Smokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Coffees/Sandwiches/Snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00


Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 860.90


Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799.79


To fill in some of the gaps and things, I'm looking into maybe merging the mobile and internets when the Tiscali contract runs out. The utilities are dealt with by my mother. The hope the Virgin manyrates make some sort of sense!! The haircuts thing is expensive and I'm looking into getting it down, there's no dreadlock specialists round my area which isn't helping. The dentistry is annoying because I need that but wish it was cheaper.

How I'm currently going about things is that I'm paying 10% of what's available to me in my Natwest current account to the Natwest CC every working day, mainly because it's easy as they're linked and instantaneous(ish). It works out between £25-4 depending on how deep in the overdraft I am. I'm also paying the minimum payment to the Virgin card every Monday to try to get that down (currently £25). I collect all my spare change and tips in a bottle and bag it up at the end of every month and pay that into the ISA.

I guess what I should be doing is looking into clearing the overdraft first and then concentrating on the CC's and maybe I should look into using the ISA to clear the debts too. I'm just a bit.. I dunno, I just don't really want to touch the ISA as I've never really saved before and I'm proud for doing it.

Anyway, enough of my waffle.... any advice would be most appreciated.

Thanks

Tixy

Hi and welcome

I love the idea of your campervan dream.

renegadia wrote: »

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 860.90 anyway you could increase? more hours?
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 0.00 are you entitled to any working tax credits based on your salary?

Monthly Expense Details

In Your Home

Mobile Phone(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.48 (O2, contract runs out 01/12)
TV Licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Internet/Home Phone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.73 (Tiscali (TalkTalk), runs out 04/12)
Overdraft Cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.87 (NatWest, 18.28% APR, £1,150 limit)
Bank Account Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Home Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130.00 is this 'board' to mum to cover all utilities council tax etc?
Food and Household Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 does mum pay for all of this?
Drinks for Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.00

Motoring & Public Transport

Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.00
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.92 (pre-2001 car, upwards of 1.4l engine limit)
Car Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.77 (Just renewed, using MSE system)
Car Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 need to budget something here, try to work out annual cost of servicing, MOT, new tyres etc and budget 1/12 a month.
Rail/Bus/Taxi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Breakdown Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.92 (Just renewed, Quoteline, inc. Euro cover)

Debt Repayments

Credit Card Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304.17 this is just the minimums? do you just pay minimums at the moment?
(Natwest Platinum - £787.32/£1,650 - 0% til 01/12 becoming 19.9%, 19.9% Purchases)
(Virgin Money - £737.22/£1,500 - of that, £584.75 is 0% til 04/12, £126.76 is 0% til 01/12, £25.71 is 18.9%,
0% Purchases until 10/11, then 18.9%)
Savings & Investments
Mini Cash ISAs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80.00 (Halifax ISA, 3.00% Gross PA)
How much in it? have you considered using to pay off debts as they are costing so much more than you earn on this

Family

Pet Food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.00 What do you have? do you need to allow anything for vets bills or boosters etc in your budget?
Pet Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Entertainment
Family Days Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.67
Clothes, Health & Beauty

Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.67
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.60
Work Clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New Children's Clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New Clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 Probably need to budget something here?

Education & Courses

Big One Offs

Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 budget for this
Winter Holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Summer Holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 and this

Odds & Sods

Newspapers & Magazines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Tax & NI Provisions (self-employed only). . . . . . . . . . . . . . . . . . . . 0.00
Regular Charity Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Meals at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Smokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Coffees/Sandwiches/Snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00


Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 860.90


Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799.79

My guess is that your shortfall is that you've not budgeted for things like presents, clothes or anything for entertainment spending aside from £16.67. If you keep a spending diary you might track down where this £60 or so is going. Typical areas are coffees, lottery tickets, magazines, toiletries/cosmetics etc

renegadia

Hey Tixy, thanks for replying!

There's not much in the way of jobs round here and hours are being cut, so I don't think my income will increase. I did also work self-employed for a little while a couple years ago, doing AQA, but the reward wasn't too great.

I have looked into getting Working Tax Credits but just a little confused. After working thru HMRC's qualifying survey it states I am entitled due to the household earnings. Does that mean just my earnings (which is what it's filled out), or the entire households (mine, motherbear's and her bloke)?

The rent is indeed board, covering food, and utilities.

Car maintenance - Knew I'd forgotten something. That would average out so far at £30 a month. The joys of motoring, eh?

Credit card repayments - It isn't the minimums. On the Virgin I pay the 'mimimum payment' every week, as opposed to every month, so 4xminimum. On the NW I pay 10% of my available current account funds every working day which works out as many times more than the minimum.

Mini ISA - There's about £9,500 in there and I know deep down I should use that to pay off the debt, but I don't particularly fancy doing that so I might be stubborn and refuse that option! One thing I'm looking at doing is leaving the money in the ISA and using what I would be putting in every month to help pay off the other debts, unless that's what you meant, in which case I apologise!

Pet food - I have a very low maintenance leopard gecko, so I'm basically buying crickets for her and food for the crickets too, not too much though because we grow a lot of veg and things for them.

New clothes - Don't really buy them, I bought way more than I should have a few years ago so still making my way thru them and I'm a fiend for ebay. If I really worked it out it would be no more than a couple quid a month? Same as with the birthdays and Xmas. Our family don't really celebrate with cards or presents so we have no need to buy them.

I guess the shortfall is thru forgetting to put the Car Maintenance in
the budget.

It feels like I'm never broke, I learnt the hard way that if I can't buy it I can't have it (Probably why I'm in this small mess). Smoking became expensive so I gave that up, I don't buy lotto tickets or coffees or anything like that. If anything I'm very frugal, just I'm not making many inroads into fixing the mess quick enough for my liking.

Having looked at the budget in more detail, I'm guessing the plan would be to push everything towards clearing the overdraft (and reducing it down) as that has the highest interest, stop paying into my ISA every month and use that towards the O/D. From then on, fight the NW CC until that's clear, then the Virgin? And then from then crack on with paying the ISA and then opening a Savings account also because by then my credit rating should be a bit better...

Tixy

Not sure about the working tax credits - I would imagine it should be just worked out on you personally and your situation/finances. What website did you use? Was it this one?
http://www.turn2us.org.uk/benefits_search.aspx Maybe someone else on here will know how from experience of living with parents/other adults and be able to confirm. From the quick calc I looked at it looked like you might be entitled to £40 a month or so.

I think stopping the ISA payments for a while is the right thing to do (well strictly using the savings is arguably the best financially but I know people are often reluctant to) but if you can try to use that to reduce your overdraft down then that would be sensible. Do you tend to get up towards your OD limit every month? Do you think you will be strict enough with yourself to be able to gradually have the balance come down - overdrafts can be psychologically the hardest debt for some people to pay off and it can take discipline to clear it.

Sounds like you are pretty sensible with day to day money now though.

(ps - what about just taking £1k out of your ISA to clear the overdraft? and leaving the rest in the ISA - you could then cancel the overdraft altogether, imagine how good that would feel as well!)