The freezing, and the pain to come.

financial_planner

Thanks all, for your replies, encouragement and support!

As for taking cash - thats a very good idea. I'm pondering going all the way, and freezing my debit cards as well. That way to get cash, i'd need to go to the bank with my passport!

Back in 2009 I gave up drinking completely, for about 5 months. I lost about four stone over the course of that year and briefly became very healthy. However, I also became excrutiatingly boring and had no social life. When I say 'borderline alcoholic', I don't really think I am that bad but I do drink far above the recommended limits, typically I drink say four evenings a week and two of them would be to excess. Part of the problem is my friends are quite rich, a night out normally hits around £100. And, there's no real way of MSE'ing these type of nights out, they always involve expensive restaurants and rounds of drinks in upmarket bars.

I don't know what the solution is really. I don't want to lose my friends/social circle, they're quite successful professionals, and of course I might well need their help in the future (they're typically doctors, lawyers, accountants etc). The problem is, I think, that these nights are kind of a slippery slope. Some kind of subconscious thing goes on that says if I spend £70 on a restaurant bill, where's the sense in saving £1 on low cost breakfast cereal in Sainsburys? And how much damage is a £2 coffee really doing, in the scheme of things? In the grand scheme of my wasteful spending (full details to follow), £70 restaurant bills are perhaps not such a big deal, ridiculous as that probably sounds,

financial_planner

ok, I just did the 'statement of affairs'. This is what the awkward reality looks like. I tried to post a link, but as a newbie I cant do that, so had to just copy and past the code from the 'make sense of cards' website.

My total debt is £23120. This includes money I owe to my parents, but doesn't include my student loan (another circa £19,000), which gets deducted from my salary each month. I haven't factored my house in Finland in to the analysis here, that is a seperate issue, but as I mentioned before it is unsellable and technically worthless, so it shouldn't detract from the enormity of the debt.

Anyway, the analysis is somewhat hypothetical, as I have based the calculations on my predicted future living expenses of £70 per week.

It shows that I have about 560 pounds to make repayments on my debt, each month.

So, at this rate, keeping to this plan, it would take me 41 months to become debt free. Debt free by 34!

I think I either need to get a better paying job, or get a second job. Some kind of austerity measures are needed. Any help? suggestions?!

Cheers.

FP

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1700
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1700

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 450
Management charge (leasehold property).. 0
Council tax............................. 30
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 30
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 280
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 850


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
amex...........................4824.93...108.9.....18
mastercard.....................4664.86...55........0
brother........................200.......0.........0
dad............................11250.....125.......0
overdraft......................1881......0.........20
finnish cc.....................300.......0.........0
Total unsecured debts..........23120.79..288.9.....-


Monthly Budget Summary
Total monthly income.................... 1,700
Expenses (including HP & secured debts). 850
Available for debt repayments........... 850
Monthly UNsecured debt repayments....... 288.9
Amount left after debt repayments....... 561.1

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -23,120.79
Net Assets.............................. -23,120.79

chevalier

My comments are in blue:)

financial_planner wrote: »

My total debt is £23120. This includes money I owe to my parents, but doesn't include my student loan (another circa £19,000), which gets deducted from my salary each month. Is this :j or :eek: than you thought it would be?

I haven't factored my house in Finland in to the analysis here, that is a seperate issue, but as I mentioned before it is unsellable and technically worthless, so it shouldn't detract from the enormity of the debt. Why is it worthless?

Anyway, the analysis is somewhat hypothetical, as I have based the calculations on my predicted future living expenses of £70 per week. Is this £70 for food or does this include socialising as well.

It shows that I have about 560 pounds to make repayments on my debt, each month. Do you REALLY have this much left over? If not then a spending diary will help you work out what you are frittering it on.

So, at this rate, keeping to this plan, it would take me 41 months to become debt free. Debt free by 34! :j:j:j:j

I think I either need to get a better paying job, or get a second job. Some kind of austerity measures are needed. Any help? suggestions?!

Cheers.

FP

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1700 Is this also your income after the student loan payments are taken out? And have a look on the up your income thread for ideas to bolster you income, without necessarily getting another job. But having said that is the job you do one where you can freelance at it in the evenings?
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1700

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 450
Management charge (leasehold property).. 0
Council tax............................. 30
Electricity............................. 30 these seem quite low have you actually done a reading and submitted them so you definitely aren't in arrears?
Gas..................................... 30
Oil..................................... 0
Water rates............................. 0 Are you in Scotland, or are these included in your rent? If not then you need to divide the bills by 12.
Telephone (land line)................... 0 No landline?
Mobile phone............................ 30
TV Licence.............................. 0 So you don't have a tv?
Satellite/Cable TV...................... 0 Or sky?
Internet Services....................... 0 so how do you get online if you don't have the internet?
Groceries etc. ......................... 280 OUCH. For 1 person, even with the price rises this is still alot of money. If you are still on the ready meal buying thing, then I would invest in some recipe books from the charity shop, or else look up recipes on the web for ideas of easy things to cook yourself....Also on the moneysaving oldstyle forum on this site, there are indexes of cheap meal ideas, that are also healthy.

Clothing................................ 0 so you never buy clothes, not even for work.
Petrol/diesel........................... 0 so is this a works car? Or do you not have a car?
Road tax................................ 0 ditto for these next 4
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 you need to have this if you have any expensive kit in the rental.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 nice one if you really buy for no one, but otherwise you need to factor in this.
Haircuts................................ 0 same here too.
Entertainment........................... 0 Erm you just mentioned about £70 restaurant bills so you are you really going to go down to nothing.
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 850


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
amex...........................4824.93...108.9.....18
mastercard.....................4664.86...55........0
brother........................200.......0.........0
dad............................11250.....125.......0
overdraft......................1881......0.........20
finnish cc.....................300.......0.........0
Total unsecured debts..........23120.79..288.9.....-

Have a look at the snowball calculator to see which debts to pay off first to minimise the amount of interest you paying.
Monthly Budget Summary
Total monthly income.................... 1,700
Expenses (including HP & secured debts). 850
Available for debt repayments........... 850
Monthly UNsecured debt repayments....... 288.9
Amount left after debt repayments....... 561.1
Great if you have this much, that means as a first monthly challenge you could pay off your brother and the finnish CC in one go! That way it would give you a boost!

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -23,120.79
Net Assets.............................. -23,120.79

You seem worried about what others will think about you cutting back. So tell them the truth. Just not the financial truth. That you are cutting back to improve your health and your lovelife (I am assuming that you don't have a partner currently). That way you are being healthy not money saving.

The thing is that you may find out who your mates REALLY are over this. Some people just want to throw their money around in front of others, and will get upset when you don't want to play along and do the same. It might make them have to think about THEIR behaviour too.

good luck with moving forward with this. Have a look at Hypno's thread for an inspiring read, and things you can do to get ahead.
chev

Want_to_be_free

Hey, I am in the same boat as you ...

I started tackling the negative wealth issues just over a year ago now.

If you don't mind me saying, your forecasted SOA is unworkable. I wouldn't like to come a cross as mean. I only have good intentions.
I just want to point out that, there is no room to play in your forecast. You did not spare any money for 'YOU' . No one can go without spending nothing but just necessities. Like you, I wanted to pay as much money towards my debt as possible. I made financial plans that were totally unworkable because I forgotten the fact that if there is no ''play'', there is no ''fun'', if there is no ''incentive'', there is no ''will'' to carry on.

Please don't get cross with me, you have an admirable goal to be debt free in 41 months. Buy you cannot live without new cloths, no going out, no travelling, not getting a hair cut or giving small presents... What about emergencies??? You can get wiser with your choices, can learn the art of frugal living and spend a lot less then what you were spending before, but cutting everything off is impossible and nothing to do with 'will power'.

When I started, I earned similar amount to you. Along the way, I got promoted with a promise of 5 % in next January. So still earn the same, but my income is up because I rent a room in my flat. This is not so important, important thing is when I tried 'not living' but just paying, I got upset, withdrawn and lost my sparkle. Life became tedious, meaningless. Thanks God, I got to my senses very quickly, these days I put certain percentage from my salary to 'I am so worth it' jar, jars work as bank accounts for me at the moment. I use this money on me, such as going to a beautician every month, or eaten out once or twice. Maybe an odd coffee at work... Anything I fancy within the limits of my jar. If I don't use this money within the month, I loose it... Well not literally, anything is left goes to my ' Must have a holiday in Summer 2012 ' account

All I am trying to say is, you need to be realistic, you need to have a budget where everything is captured. Most importantly, you need to look after yourself along the way, so you will keep your sanity , when you keep your sanity, dealing with debt gets easier....It is already uncomfortable road we are on but just because we are trying to reduce the debt we cannot stop living...

This is how I think anyway...:p

financial_planner

Thanks! some really good pointers there.

All the bills I pay go in to a house account, it is about £90 per month. And, the 1700 is after tax, pension, student loan deductions....

I was being a bit lazy about putting £70 on groceries. My target is to spend £70 per week on food, and entertainment, clothing, and everything else. I think this must be possible, because I did it back in 2004, when I was earning £700 a month. And, I even had a lovelife back then, possibly because I was younger and thinner, not so much to do with my financial status.

More recently, though, I've recently concluded (for good) a five year relationship. So, I'm obviously hoping to meet someone, but I need to put my affairs in order first.

My spending up until now is impossible to analyse at this point. Well, the numbers are there, but I can't bear to look at them. Lets just say it resulted in this horrendous debt problem, but now the credit cards are in the freezer so they can't harm me. I will do an analysis soon, I need to know how I went so badly wrong. So watch this space.

As for the social life, my current thinking is that I need to just withdraw for six months, or something, whilst I sort this horrendous debt situation out. In the same way as my housemate withdraws from the world for the next 6 months, while he is doing his accountancy exams. I guess the people will still be there when I return.

financial_planner

Hi - Want-to-be free!

Thanks for your reply. Indeed, you are absolutely right. I need to face up to these facts. I have faced up to my debt problem before, and tried to go down a path of extreme austerity, and it just doesn't work! You just get bored and slip back in to your old habits. Perhaps I need to cut up my cards, not just freeze them.

My current thinking is to cut out completely my habits of expensive meals, and rounds of drinks in upmarket pubs. I'ts bad for my health (both physically and financially), and I am not meeting anyone new.

My thinking is this:

1. Get a second job in a social environment - eg a pub. I've worked in a pub before, and I can do this job. Would be good fun and I would get to meet some new people. Fortunately, I work in the public sector, so i'm not doing crazy hours and have flexibility.

2. Learn Finnish. This will help me with my house over there.

3. Go to salsa dancing classes. The one thing that I really hate about myself is that I can't dance, At all. never been able to. Its rally embarrassing but crucially it is harming my chances of meeting someone. I'm all too often the guy with bloodshot eyes, slumped at the bar...

I wonder, what is a realistic budget, for food, entertainment, and clothing? I've definetly done it before on £70, but it was out of genuine necessity, and I was younger then. Is £100 more realistic?

ani*fan

Hi financial planner :wave:

Well done on taking the first steps to get your finances under control. It's not easy, but it has to be possible 'cos other people on here have done it!

I'm also looking for ways to cut down on my socialising expenses. I've thought about withdrawing into complete isolation but to be honest, it's not me and I'm sure I'd fall off the DF wagon if I did this. Is your house the kind of place you can invite your mates to? Could you cook for each other, bring your own drinks, have a laugh without spending a fortune?

Best of luck. I've just subscribed and look forward to your updates.

financial_planner

hi ani*fan

Thanks, and good to hear from someone in a similar position!

I'm lucky to live in a nice house, which I share with two good friends. I think thats a good idea, inviting people over etc. But I think that really I need to change my life somewhat, try some new activities that maybe don't revolve so much around drinking.

I'm absolutely committed to this DF idea, now. And, perhaps i'll also get promoted, or get a new job even. I haven't even applied for anything in nearly two years, so I've dropped the ball on that one. Too many hangovers. I need to update my CV.

BEAT_THE_DEBT

Hi and well done on what you have done so far. I too have affluent friends same job types a yours. When i told them i was cutting back they all jumped on the bus to do same and each secretly revealed they were pleased i had done it as they were struggling also. You never know.............
good luck keep posting espicially on bad days.
love
btd

financial_planner

Hi, Beat the debt.

It is funny, people are all living way beyond their means in this country. For instance, a friend of mine recently graduated and moved to London. A year later, he's already £4k in debt (credit cards, consolidated loans, etc). Just, like me, he's not facing up to it. Another £20 round of drinks, whack it on the credit card. etc.

I think that isolationism might be the only policy, going forward.

Thanks everyone for reading, and your helpful replies!

FP