My Lightbulb

louisesfreedom

I've been itching to post since around this time last night. Had a quiet moment a couple of weeks ago, which I now realise was a sort of lightbulb moment for me. I've got debts of somewhere around £55,000 (no horrible sighs, please, and I promise to post my SOA within the next week so I can get some stern words on where I'm going horribly wrong!).

I opened a new bank account last week (some of my borrowing is with Lloyds, which is also my current account, so I thought I'd better move over while I still can).

I'm at a point now where I've been living on credit cards (I know, I know...) for a good few months. I've almost exhausted the balance limits, and have done some serious burying my head in the sand, just hoping that it would somehow sort out - which of course it isn't going to. I could carry on like that for a couple more months, but I've finally realised that I just don't want to do that. I want to work through this properly, and to get rid of this horrible burden.

Last night, I ended up on here and spent about four hours reading the forums. Couldn't wait to get home from work and read more - I've found everything I've read to be really inspirational, and I know now that it's possible to get myself out of this huge dark hole. I actually feel amazingly positive, and am strangely looking forward to a diet of cheese & potato pie and spag bol for the next umpteen years!

What else? I have a lovely income (just over £2,000 monthly), am single and renting (which is a bit of a worry because of the insecurity of it). Have a partner who I don't live with and who knows nothing of this - I want to give him an idea of my situation, without worrying him too much about it, and am hoping to do that over the next week or so.

So I thought I'd start a thread to record my progress, my stumbles along the way, some rambles about how it all came to this and hopefully a happy ending in a few years' time.

Won't be online again 'till Sunday, but I wanted to say hello and begin my story. I also wanted to say how wonderful this site is, and how important all the stories I've read have been to me over the past couple of days.

x

jbaugh

hi

i cant help but i have just started and feel the same a really weird type of calm....and positive about everything.

good luck

tryhard_2

good luck and don't get too upset when you do SOA for the first time

lynzpower

welcome to our gang

I know how addictive this can be ( I didnt get my posting status for nothing!)

big welcome, one day at a time, we will get you there in the end.

Lynz
xx

HHH_2

Dont worry no huge sighs form anyone on here! I too am in a very similar posistion but have just started my DMP so instead of every penny I spend costing me in interest I have had my first CC free Christmas. it will take a long time to pay off my debts but half of my pay is now mine all mine rather than it all going to pay my debts at the mimimum payment each month. it's a fantastic feeling soisnt it? good luck x

ricksExpensive

Welcome to the board! Youve taken the first step to working towards being debt free by the fact youve admitted your problems and takens your head out of the sand! WELL DONE for that!

Rick

happy_chick_3

well done for making the first step. everyone here is supportive and inspirational so you will def find lots of help and support and motivation in the tough times.
its fantastic that you've taken the first step and everything will snowball from here into a fab debt free life!

hbl_2

Welcome and congratulations on taking the first step. You won't realise it yet, but you are already financially better off.

While your debts may seem insurmountable at present, from what you've said so far, your position is far from destitute.

As you say you are on a healthy income, you rent, I presume no children, and your partner is separate from your finances. My gut reaction is that you simply overspend. I think if you take a look at what goes out and realistically judge where you spend your money and what on, a few simply changes without a drastic change of lifestyle will free up a healthy figure each month for repayment.

If you really want to take advantage of your inspiration and get really gung ho about this, then you can slash spending across the board - bin off amenities, dont eat out, give up booze, coffee shops, clothes shopping etc and limit your outgoings to 1. Rent 2. utilities (inc phone) 3. food 4. toiletries. 5. necessary transport.

Hypothetically, if you live in London and have a rent of 800pcm, and you can limit your monthly spend to £200-£300, then that frees up £900 a month to decapitate your debt. If you keep that up for a few months, then you've already saved yourself a healthy sum in interest over the next 5 years or so and you can think about reintroducing expenditure into your budget.

If you dont live in London, find a place with a cheaper rent - if a move could save you £200 a month, that's another £2400 a year, which is £12,000 over five years, and represents a 1/5 of your present debt.

So as everyone said, post an SOA, but more importantly think five-year-plan.

Good luck!

louisesfreedom

Thank you for all your kind comments so far. I feel really confident that I can get through this, but I know it’s going to be difficult.

This has been quite a harrowing day, but at least I have the full picture as it stands now (which is even worse that I’d thought). I’m feeling stupid for having got to this stage, but I suppose that the thing to do now is to somehow begin to work through it.


Monthly Incomings:

Salary - £2208.98


Monthly Outgoings (not including debt):

Rent - £550.00
Council Tax - £65.00
Gas - £38.00
Electric - £30.00
Water Rates - £55.00
TV License - £11
Orange Mobile - £75.00
BT Phone - £28.00
BT Internet - £26.98
Contents Insurance - £24.18

Food & Housekeeping - £160.00
Prescriptions - £6.40
Clothing - £40.00
Hair, Make-Up, Dry-Cleaning - £40.00
Travel - £27.00
Smoking - £165.00
Lottery - £10.00
Pocket Money - £45.00

Total Outgoings (without debt payments) - £1396.56

I've done some notes on these outgoings, posted below (number 16, I think)


Debts & Repayments:

Lloyds Loan 2 - £11,983.49 - repayment is £468.56 monthly
Lloyds Loan £1,560.00 - repayment is £164.44 monthly
M&S Loan £9,086.94 - repayment is £159.42 monthly
BoS Card £8,490.00 - repayment is £540.00 monthly
Halifax Card £14,204.12 - repayment is £284.00 monthly
Barclaycard £6,763.51 - repayment is £169.00 monthly
Lloyds Card £9,727.23 - repayment is £195.00 monthly
Overdraft £1,200.00

Total Debt £63,015.29

Total Monthly Debt Payments £1980.42



Getting all that together has taken some doing, and I’ve really thought about my living costs and trying to bring those down. Please add other suggestions/comments if you can think of them.

I can see that there are a few more things that I need to sort before getting into either a debt management plan or an IVA (I’m not absolutely certain, but I don’t think that bankruptcy is an option for me), and obviously I need to do things like cutting out the lottery.

And a note on my hair…
I’m an ‘un-natural’ blonde, and have it coloured every month or so (my natural colour is very dark). I want to go back to my natural colour (to save money), but reckon I’ll need to do that over a few months so that the colour takes properly. I don’t know about such things, or about whether I could just colour it myself without the risk of it turning green!!!


As I’ve been doing this, I’ve thought of a few questions that people might be able to help with.

* How do I stand if I start selling things on ebay? I’ve done this before, and have a few more things to sell, but am worried that I’d be expected to carry on with that, and therefore have an additional amount to add to my monthly income. Would I be better leaving the money in a paypal account and then using it to buy clothes etc from ebay when I’m really in need?

* How do I stand if something major goes wrong (TV/Washing Machine/Fridge etc)? Do people generally have an ‘emergency fund’ as part of a finance plan, or is it just a case of suffering through by playing chess/washing clothes at launderette/eating warm cheese etc according to what breaks down once I’m into a plan? I know I’m being really naïve, aren’t I?!

* Does anyone have experience of being a smoker and presenting one of these financial statements to creditors? It’s pretty obvious that stopping would make a huge saving (and therefore more money for creditors), but I’m not sure I could even attempt that at present with all the stress etc.


So there we are! Thanks in advance to anyone who can help.

x

charl8888

Well Done for posting your SOA. I am not a real expert but I am sure you could find a better deal for phone/broadband/mobile. And you could probably reduce your gas/electricity if you use a price comparison site. We pay less than you on buildings and contents insurance for a 4 bed. house, again you can use a price comparison site as featured on this site.
Good Luck and all the best, I will follow your progress as I struggle with mine!

emmamcr

Firstly, well done, you've done the hardest thing
I'm not an expert by any means but I added a few comments.

Monthly Outgoings (not including debt):

Rent - £550.00 - are there alternatives? a flatshare, lodger?
Council Tax - £65.00 are you getting single person's discount?
Gas - £38.00
Electric - £30.00
Water Rates - £55.00
TV License - £11
Orange Mobile - £75.00 You should be able to cut this right down
BT Phone - £28.00
BT Internet - £26.98 Probably better deals out there
Contents Insurance - £24.18

Food & Housekeeping - £160.00 You could make cutbacks, use the O/S board
Prescriptions - £6.40
Clothing - £40.00 Think about ebay for buying and selling instead
Hair, Make-Up, Dry-Cleaning - £40.00 Lots of room for cutting back, student nights, cheaper brands etcTravel - £27.00
Smoking - £165.00
Lottery - £10.00 not needed
Pocket Money - £45.00

I am guessing that shopping must be a big part of your life. As well as cutting back you will need to find ways of filling that empty space with another hobby or interest, so you don't feel miserable