LBM - I owe £20,000

antonia86

I have been putting this off for years if I'm truely honest. But today I finally put my figures in the budget planner and also found out how much I honestly owe. £19947.74. Ouch!

So where do I start?

My debts are managable but life would be much brighter if we could get rid of them.

I owe:

Tesco Credit Card£1,481.21Halifax One Card£2,937.90Halifax Charity Card£1,376.81Halifax Loan £1,894.90Halifax Loan £7,651.82Halifax Joint Account Overdraft£3,500.00Halifax Account Overdraft£1,000.00Halifax Credit Card£2,000.00

These cost £485 a month in minimum payments and interest.

What should I prioritise, what are your secrets?

I'd be very grateful of your help.

DrSqueeze

The probability is that the most expensive debt you have are the credit cards.

Have a look at the interest rates and charges on the cards to see which is the cheapest (and which are the most expensive).

Concentrate the most money on repaying the expensive ones, this will bring your charges (and therefore debt) down faster. See if you can transfer any of the balances onto the cheaper ones.

The next targets are the overdrafts, they're likely to be more expensive than the fixed loans.

joedenise

Why not post your SOA (see makingsenseofmoney.co.uk)? Complete it and then format for MSE and cut and paste into this thread.

Others, who are more expert than I, might be able to help make some savings in other areas which you can then pay onto your credit cards.

On the same sige there is also a snowball calculator which will help you sort out what order to pay your debts off in, which I found very useful when I was sorting out my debts.

Fortunately the only debt I have now is the mortgage and a Tesco credit card which I use mainly for the points and pay off every month.

Denise

antonia86

I've completed a budget on MSE, which says I overspend £651 a month, I know I can cut this down but can I get it down to the right amount?

How do I get the budget brain onto the forum?

GeorgieFTB

The one that is normally used is www.makesenseofcards.co.uk if you have done the budget brain this should be easy.

The website above also has a snowball calculator which will help you figure out how long this will take you and which to pay first!

Gx

antonia86

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 1400
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 3081.2
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 700
Management charge (leasehold property).. 0
Council tax............................. 125
Electricity............................. 66
Gas..................................... 66
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 25
Mobile phone............................ 60
TV Licence.............................. 15
Satellite/Cable TV...................... 25
Internet Services....................... 10
Groceries etc. ......................... 450
Clothing................................ 75
Petrol/diesel........................... 200
Road tax................................ 11
Car Insurance........................... 126
Car maintenance (including MOT)......... 45
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 350
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 20
Buildings insurance..................... 0
Contents insurance...................... 25
Life assurance ......................... 0
Other insurance......................... 20
Presents (birthday, christmas etc)...... 40
Haircuts................................ 25
Entertainment........................... 300
Holiday................................. 85
Emergency fund.......................... 30
Total monthly expenses.................. 3014

Assets
Cash.................................... 100
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 1600

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco Credit Card..............1481.21...40........16.95
Halifax One Card...............2937.9....50........15.95
Halifax Charity Card...........1376.81...50........8.9
Overdraft......................1000......20........0
Overdraft .....................3500......55........0
Credit Card....................2000......50........18.9
Halifax Loan...................7651.82...165.......6.9
Halifax Loan...................1894.9....45........6.9
Total unsecured debts..........21842.64..475.......-

Monthly Budget Summary
Total monthly income.................... 3,081.2
Expenses (including HP & secured debts). 3,014
Available for debt repayments........... 67.2
Monthly UNsecured debt repayments....... 475
Amount short for making debt repayments. -407.8
Personal Balance Sheet Summary
Total assets (things you own)........... 1,600
Total HP & Secured debt................. -0
Total Unsecured debt.................... -21,842.64
Net Assets.............................. -20,242.64

Little_Miss_Uni-Debt

Hey Antonia,

Well done on working out your exact amount. Now is when you can start making big changes that have the biggest effect.

Being accurate with numbers has helped me the most. Also physically put aside money for things that you buy annually.

If you review your Credit card statements have a look at the type of purchases you put on there and plan for those occasions in future.

Small steps first. Fill in the Statement of Affairs income/outgoing page from here http://www.makesenseofcards.com/soacalc.html as others have said.

Get accurate APR% for your credit cards so you know what order you're going to pay them off them in.

Pollycat

Hi
your grocery spend at £450 pm for 2 adults and 1 child is extremely high.
Do any of you have an allergy/intolerance that means you have to buy e.g. gluten-free products?

If not, you could cut this down by half and still eat very well - even with pets.

Check out the OldStyle board for tips on menu planning, bulk cooking and dropping down a brand.

Do you really need to spend almost £1000 per year on clothes?
Do you tend to impulse-buy stuff for your child?

Water rates - are you on a meter? If not, would it be cheaper?

Landline is expensive. Do you use it for calls? If so, are you on the best tariff? I pay my line rental up-front for a year (£120), works out at £10 per month and I pay £5 per month for free landline calls any time of day (except Premium).

Could you cut down on entertainment?

Ditto holidays. Can you really afford a holiday if you have a deficit of over £400 every month?

You said in your first post that your debts are manageable - this doesn't really look like it from your SOA.

At least there are ways in your SOA to make quite a lot of savings if you are prepared to cut back in some areas and make a bit of effort in others.

antonia86

Thanks Pollycat,

I completed my SOA with the current state of play, that is what we are spending now and have been the last few years. I am grateful that there are places we can easily cut down our spending, otherwise it would be even more frightening.

The debts have always felt manageable but the SOA, as you rightly point out, is evidence that our current lifestyle and the debts are not. I don't want to default or ruin our finances completely so need to handle this now (LBM!)

All this feels very overwhelming and frightening at this moment in time so any pointers would be great.

Little_Miss_Uni-Debt

Just a few initial comments.

I think you may spend less than you think in some areas. Are you making your credit card payments each month? If you are then that money is coming from elsewhere in your SOA as you don't have surplus from your wages.

Hope this helps, remember this is your starting point. I'm sure you'll be able to free up a lot to go towards your cards!

antonia86 wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 1400
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 3081.2
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 700 - Could you consider a cheaper property or are you commited to where you are currently?
Management charge (leasehold property).. 0
Council tax............................. 125
Electricity............................. 66
Gas..................................... 66
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 25
Mobile phone............................ 60
TV Licence.............................. 15 Is this paying this years or is this saving for next year?
Satellite/Cable TV...................... 25 Can you get rid of this
Internet Services....................... 10
Groceries etc. ......................... 450 I'd say cut to this to £300 (other will say even less!:p)
Clothing................................ 75 Is this for your child, this is nearly £1000 a year. Can it be cut?
Petrol/diesel........................... 200
Road tax................................ 11 Saving for next year?
Car Insurance........................... 126 Saving for next year?
Car maintenance (including MOT)......... 45 Saving for next year?
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 350
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 20
Buildings insurance..................... 0
Contents insurance...................... 25
Life assurance ......................... 0
Other insurance......................... 20 Is this essential?
Presents (birthday, christmas etc)...... 40 Do you have a present to buy every month or do you save this for Christmas?
Haircuts................................ 25 Look into cheaper places and go less often.
Entertainment........................... 300 Most of this needs to go on your cards
Holiday................................. 85 Where is this being saved?
Emergency fund.......................... 30 Does this get saved or spent? If it gets spent it needs to fit in a category above.
Total monthly expenses.................. 3014

Assets
Cash.................................... 100
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 1600

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco Credit Card..............1481.21...40........16.95
Halifax One Card...............2937.9....50........15.95
Halifax Charity Card...........1376.81...50........8.9
Overdraft......................1000......20........0
Overdraft .....................3500......55........0
Credit Card....................2000......50........18.9
Halifax Loan...................7651.82...165.......6.9
Halifax Loan...................1894.9....45........6.9
Total unsecured debts..........21842.64..475.......-

Monthly Budget Summary
Total monthly income.................... 3,081.2
Expenses (including HP & secured debts). 3,014
Available for debt repayments........... 67.2
Monthly UNsecured debt repayments....... 475
Amount short for making debt repayments. -407.8
Personal Balance Sheet Summary
Total assets (things you own)........... 1,600
Total HP & Secured debt................. -0
Total Unsecured debt.................... -21,842.64
Net Assets.............................. -20,242.64

antonia86

Pollycat wrote: »

Hi
your grocery spend at £450 pm for 2 adults and 1 child is extremely high.
Do any of you have an allergy/intolerance that means you have to buy e.g. gluten-free products? Honestly? We like eating nice food and haven't overly thought about it before.

If not, you could cut this down by half and still eat very well - even with pets.

Check out the OldStyle board for tips on menu planning, bulk cooking and dropping down a brand.

Do you really need to spend almost £1000 per year on clothes? No, but we do at the moment.
Do you tend to impulse-buy stuff for your child? Yes, and I need to stop!

Water rates - are you on a meter? If not, would it be cheaper?
We are, the south east just seems to be expensive.
Landline is expensive. Do you use it for calls? If so, are you on the best tariff? I pay my line rental up-front for a year (£120), works out at £10 per month and I pay £5 per month for free landline calls any time of day (except Premium). I've called sky today and my package (TV, line rental, calls and broadband) ends in October, I will be changing and cutting the cost.

Could you cut down on entertainment? Absolutly, and we will do.

Ditto holidays. Can you really afford a holiday if you have a deficit of over £400 every month? Nope.

You said in your first post that your debts are manageable - this doesn't really look like it from your SOA.

At least there are ways in your SOA to make quite a lot of savings if you are prepared to cut back in some areas and make a bit of effort in others. Thank you!