Debt-Free Wannabe Newbie

jade-evie

Hi All,

I've been meaning to post in here for a while but couldn't pluck up the courage to write it all down!

My partner and I are getting married in 6 weeks and have made secret vows to one another that we shall get rid of at least 70% of our debt and start saving for a mortgage in 12 months!

We're not in an awful position- but we're by no means rich and seem to struggle through month to month! I work in HR for the NHS and he's a lorry driver. He recently took all of his lorry driving courses which cost just under 4k all in which is why we haven't made much headway on clearing he debt so far! His credit rating is very good- mine is very average after a bit of a stupid time 4 years ago which is still showing on my report.

Incomings:

My Wage:- Approx £1400 a month
His Wage: Approx £1100 a month
Child Benefit and TC's:Approx £400 a month

TOTAL: Approx £2900 pcm

Outgoings:
Rent: £695
Groceries: £200
Council Tax: £96
Rates: £11
Sky (phone TV and internet):£23
BT: £14
Mobile Phones: £80
Childcare: £580
0% M&S credit card: £100
0% MBNA credit card: £100
Santander Loan: £384
RCI Finance (Car): £190
Car Insurance: £60
DFS Sofas: £46
Cosmetic Surgery Repayment: £101
Petrol: £120

Total: Approx £2800

So each month we pay off a bit of credit card to then just use it again!

Our debt amounts to:
M&S Credit Card: £2900 (wedding)
MBNA Credit Card: £2000 (0% BT of overdraft and 2 higher interest credit cards)
Santander Loan: Originally £10000 being paid off over 30 months- 22 months remaining. Now Approximately 8k remaining.
DFS Sofa: 0%- Approx £200 remaining- will be paid off in December 2011
Cosmetic Surgery: £1400 remaining- ends in November 2012 if not repaid early.
My car is also on finance and I will need to pay the balloon payment of £4000 in March 2014- Total of £11,000 remaining.

Total: Approximately £25k.

It's manageable and we're not struggling YET but I'm facing redundancy next month and worry about how we would afford all of the repayments. If I am made redundant I will receive just under £4k redundancy money and provided that I find work immediately after (I don't care if it's McDonalds as long as it covered the bills!) I would use the redundancy to clear the cosmetic surgery loan and the rest as a lump sum off of the loan.

With redundancy we would like to pay off £10k of the debt by September 2012 and without it would be more realistic to aim for £7k. Although the loan and credit card debt is mainly my other half's we're treating it as shared for any other purposes and regardless of who owns the debt we just want it cleared! Our aim is to plough any money we're no longer spending on debt clearing into a savings account with the view of buying our property in 2013/2014. We need about a £15000 deposit but hopefully with a couple of payrises and our daughter stating school next year (GOODBYE NURSERY FEES!) we should have a good chance

I thought I would join you all in here for some mutual support- some of my friends are not living in the real world and don't support me sitting in watching telly instead of joining them on wild weekends away but I keep reminding myself that in another 4 years they could find themselves in the same situation!

J x

cleggie

Hi Jade.

well done for plucking up the courage. You have admitted your level of debt, and your spending habits, which is the first step, thats great!

The first thing that i notice by looking at your outgoings is the £80 p/m on mobile phones. Are you under contract? Is this for just 1 mobile, or for 2? Is there anyway you can get it cheaper (although i understand that if your partner is a lorry driver you would need to stay in contact with him).

Welcome to the forum! I am sure someone more helpful will be along shortly to give you more advice!

jade-evie

Hi,

The £80 is for 2 mobiles- my contracts is up for renewal in October this year though and I am considering going PAYG- there's no new phones I want and they all seem to be 2 year contracts which I don't want to get sucked into!!

cleggie

Look at some of the packages that the various companies do for PAYG.
For example, i am with orange and if i top up by £10 a month i get 300 free texts a month, and free internet thingy wotsit (up to whatever MB lol, i am a technophobe!!). I know there are better deals out there than mine, so shoparound and have a look.
Good luck!

Magpie23

Just wanted to say 'Hi, Welcome & Well Done!'

You've taken positive first steps by joining us all here, especially before things become dire for you. You've got your head screwed on properly when you refuse to get yourself further in debt by going out with friends (as tempting as it may be). Also, there is nothing more admirable than saving for a deposit for your own family home.

Well done for having cc's on 0%, it is the interest that's the killer, plus it'll give you breathing space and allow you to gain momentum in the months to come. It's lovely to hear that you're tackling the debt together regardless of who or why. This will stand your marriage in good stead (richer/poorer, better/worst) if you've already taken that approach from the beginning.

So, congratulations on all fronts, you've come to the right place and you'll be debt-free in no-time, especially when your daughter goes to school, that was our saving grace .

Best of Luck,
Magpie23
-x-

aimzrabbit

Hi Jade and welcome

are you under 90 days consultation yet for your redundancy ? if this hasn't started then redundancy protection may be an option they are expensive and some policy's you have to have running for a period of time and some policy's both of you have to be out of work to kick in

you may want to seek a professional for advice

katsu

jade-evie wrote: »

Incomings:

TOTAL: Approx £2900 pcm

Outgoings:

Total: Approx £2800

So each month we pay off a bit of credit card to then just use it again!

Welcome and well done for facing this. I suggest you start by getting all your bank and CC statements for the last two months and then review your outgoings (we get them posted here as an SOA or statement of affairs from a website called Make Sense of Cards).

On your listing above you should have £100 left and not be using the CCs.

I suspect that a spending diary for each of you (a notebook to write down what you spend money on) and the bank statement exercise I recommend, will show you your real outgoings. You can thenwork out how to avoid spending on your CCs.

Best of luck.

jade-evie

katsu wrote: »

Welcome and well done for facing this. I suggest you start by getting all your bank and CC statements for the last two months and then review your outgoings (we get them posted here as an SOA or statement of affairs from a website called Make Sense of Cards).
Best of luck.

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.................... 2

Monthly Income Details
Monthly income after tax................ 1396
Partners monthly income after tax....... 1126
Benefits................................ 81
Other income............................ 284
Total monthly income.................... 2887

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 722
Rent.................................... 695
Management charge (leasehold property).. 0
Council tax............................. 96
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 11
Telephone (land line)................... 14
Mobile phone............................ 80
TV Licence.............................. 12
Satellite/Cable TV...................... 23
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 40
Petrol/diesel........................... 130
Road tax................................ 0
Car Insurance........................... 69
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 580
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 12
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 10
Entertainment........................... 25
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2814


Assets
Cash.................................... 900
House value (Gross)..................... 0
Shares and bonds........................ 350
Car(s).................................. 9000
Other assets............................ 1500
Total Assets............................ 11750


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 8000.....(384)......0
Hire Purchase (HP) debt ...... 11000....(189)......4<
Cos Surgery....................1400.....(103)......0<
Sofa...........................250......(46).......0
Total secured & HP debts...... 20650.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
MnS............................2900......100.......0
MBNA...........................2000......100.......0
NEXT...........................332.......25........25.9
Total unsecured debts..........5232......225.......-


Monthly Budget Summary
Total monthly income.................... 2,887
Expenses (including HP & secured debts). 2,814
Available for debt repayments........... 73
Monthly UNsecured debt repayments....... 225
Amount short for making debt repayments. -152

Personal Balance Sheet Summary
Total assets (things you own)........... 11,750
Total HP & Secured debt................. -20,650
Total Unsecured debt.................... -5,232
Net Assets.............................. -14,132


.

jade-evie

As you can see we normally play around a bit and stick the shopping on the CC's after we've paid them and it goes on a rolling month to month basis.

I forgot to mention that my other half gets paid weekly which can make it a lot more difficult to manage the large repayments- my wages are eaten up by the £384 loan repayment, £695 rent and £580 nursery which leave our account on my pay day!

jade-evie

jade-evie wrote: »

Our debt amounts to:
M&S Credit Card: £2900 (wedding)
MBNA Credit Card: £2000 (0% BT of overdraft and 2 higher interest credit cards)
Santander Loan: Originally £10000 being paid off over 30 months- 22 months remaining. Now Approximately 8k remaining.
DFS Sofa: 0%- Approx £200 remaining- will be paid off in December 2011
Cosmetic Surgery: £1400 remaining- ends in November 2012 if not repaid early.
My car is also on finance and I will need to pay the balloon payment of £4000 in March 2014- Total of £11,000 remaining.

Total: Approximately £25k.

It's manageable and we're not struggling YET but I'm facing redundancy next month and worry about how we would afford all of the repayments. If I am made redundant I will receive just under £4k redundancy money and provided that I find work immediately after (I don't care if it's McDonalds as long as it covered the bills!) I would use the redundancy to clear the cosmetic surgery loan and the rest as a lump sum off of the loan.


J x

Hi All,

I've been very busy since I was lost on MSE- I got married, got made redundant, got a new job and more importantly PAID OFF SOME DEBTS!!
We now have the following left- I have taken my car off for now but have added some bits on I had originally overlooked!

Santander Loan 5115
M&S Credit Card 1400
MBNA Credit Card 1700
New Look Card 0
Next Account 0
Vanquis CC 0
DFS Sofa 0% 45
Cosmetic Surgery 0

It's down to just over £8k! Although this might still seem a lot to some- for us this is a huge improvement and manageable on our salaries!

Our new years resolution is to be debt free in 6 months time- our last sofa payment is due is 2 week and my hubby has accrued some annual leave he didn't realise he was entitled to which amounts to just shy of £1000 so we will pay off the M&S in full after Xmas.

Most important for us is that by making the lump sums it means our minimum payments are less so if we do have a difficult month we can make the minimum payment and not have to use another credit card to pay for the shopping!

We are only shopping in Aldi now as they only accept debit cards and are a lot cheaper than Tesco!!

Thank you MSE for giving us the motivation to do this- although it was horrible being given a big lump sum and not being able to spend spend spend like we used to the satisfaction of knowing that this time next year we wont owe anyone a penny is VERY liberating!

J x

JustinCredibleGillespie

Well done you!

JCG

xx