New DFW SOA for your advice!!

zoearmfield

Hey!


We need your help! We’ve given you loads of info here so hopefully you can all give us some advice!

We are a young unmarried couple (no kids or dependents), who bought our house last year with help from family, and both are in full time employment (although partner 2 was at risk of redundancy in December, but was retained in his present role). This has made us realise how at risk we are with our current financial situation if one of us was to lose our jobs.

We spent a year travelling the world in 2006, which put us in a huge amount of credit card debt, which we have never managed to pay off. Add to that the fact that we have then continued to use credit cards to pay for things, means that we are constantly in the same position.

We need 2012 to end with us in a better financial situation than we were in at the beginning of the year.

Here are the facts:
Monthly Income:
Salary 1: £1539
Salary 2: £1469
TOTAL: £3008


We have a joint account and separate accounts. We both contribute each month to the joint account, which is where all the bills/costs related to the house and car come out of.


JOINT OUTGOINGS


Car breakdown cover £ 5.25

Repayment for loan of house deposit £100.00 This is to a family member who lent us the deposit for our house
Life insurance £7.00 Important for mortgage
Joint gym membership £44.00
We are considering cancelling this although it is a 3 month cancellation period
Mortgage £560.00
Council tax £119.00
TV Licence £10.62
Car insurance £47.65
Water £39.29
Interest on joint bank account £7.00
We are consistently reaching our overdraft limit on this account (£900)
Gas & Electricity £100.00
Home insurance £ 46.00
Virgin Media for internet, phone and tv £ 55.00
We appreciate that this is a lot, however in order for work we need extremely fast internet connection.
Car repayments £159.79
We bought a new car in Jan 2010 and are making these monthly repayments
Food £300.00
Approximately £75 a week. We used to manage a £50 a week food shop, but food prices seem to have risen so much recently…


Partner 1: (salary £1539)

PARTNER 1 PERSONAL OUTGOINGS


Contact Lenses £12.50
Contribution to personal pension £21.84
Charity donation £10.00
Bus pass £57.50
One of us drives a long distance to work, therefore the other one has to get the bus
Credit card 1 (HSBC) £40.00
Credit card 2 (Barclaycard) £100.00
Credit card 3 (Amazon) £50.00
Personal bank account interest £12.00
Again, always reaching the overdraft limit on this account (£1000)
Mobile phone bill £35.00
Contribution towards joint account (rent/bills etc) £1000.00
This leaves me the following amount for sundry expenses
£250.16


Partner 1 Statement:

Although I have £250 free each month, it seems to vanish very quickly. Quite regularly I have to get taxis for work, which I have to pay for with my own money, and then claim back on expenses. This means that I always need to have cash in my purse, which can cause problems.

My main flaws are:

• When my money runs out, that doesn’t mean I stop spending…I’ll just pay for things on the HSBC credit card
• I’m no good at being patient and saving up for things I want to buy. I’ll just go and buy them immediately and pay on the credit card

If we take December as an example month, the £250 was spent as follows:

• £37.65 on shopping for household items like towels
• £40.00 taking family to cinema
• £55.00 last minute xmas presents and new years eve tickets
• £30.00 on going out (but loads of other nights out were paid for on credit card)
• A large amount on bank fees as I extended my overdraft
• And the remainder on bits of food/drink shopping at Asda, Tesco etc…

I do manage my money carefully and maintain a monthly budget. I sit at payday and look at the month ahead, and budget set amounts for each thing. The problem is that sometimes I might not budget for something, which means then I end up paying for it on the credit card.

Partner 2: (salary £1469)

PARTNER 2 PERSONAL OUTGOINGS


Charity Donation £10.00
Sofa repayment £30.00
As part of our plan for saving money by staying in, we desperately needed a new sofa. This was just purchased 1 week ago.
Repayment of family loan £70.00
This has just finished in Jan 2012 so I will be now using this £70 to repay another debt
Fuel £160.00 Travelling 45 miles a day for work
Credit Card 4 (Sainsburys) £33.63
Credit Card 5 (Barclaycard) £140.00
Software for work £6.00 Necessary for work
Football £12.00 Weekly football
Personal loan repayment £88.22 Finishes July
Mobile phone bill £39.00
Bank overdraft (Santander) fee £10.00 Overdraft (£450) always at limit
Bank account (Barclays) fee £7 Overdraft(£1500) always at limit
Bank account interest (barclays) £12
Contribution towards Credit Card 2 £50
Contribution towards joint account (rent/bills etc) £575
This leaves me the following amount for sundry expenses £226.15


Partner 2 Statement:

In a month nearly all the spare money I have (£226.15) will be spent by withdrawing cash. My problem seems to be getting cash and frittering it away on little things here and there…gigs/going to the pub, shopping in places like B and Q for DIY items for the new house, some beers at the off licence etc etc etc. And soon enough it seems to have vanished. We do sometimes go to the cinema which ends up being nearly £20 with two of us, and used to go monthly, although haven’t been that recently now.

My main flaws are:

• Not maintaining a monthly budget, or monitoring where my money is being spent on a weekly basis. I never really know where I am up to, and over a year might end up being charge 3-4 times for exceeding my overdraft.
• Not saving for events that I know are coming up (e.g. birthdays, stag dos, weddings, holidays, car servicing) or planning my finances accordingly
• Still spending on my credit card, particularly at the end of the month when I’ve overspent on other things, but must have fuel to get to work. October was a bad month when I ended up spending £140 on my credit card for fuel as I had overspent on other things. I’m planning on trying to organise a lift share with a colleague so I can halve my fuel costs each month

Savings
We have just over £560 currently in a savings account as when we moved into our new house, we thought it was important to have an emergency fund. This was the amount returned to us from our deposit on the rented house we lived in previously.

Credit Cards


Credit Card 1 (HSBC)
Owed: £1703.24
Limit: £4000
Monthly payment: £42.58 (2.5% balance min payment)
Interest Rate: 21.9% APR

Credit Card 2 (Barclaycard)
Owed: £4010.18
Limit: £6550
Monthly payment: £150 (fixed)
Rate: 6.8% APR

Credit Card 3 (Amazon)
Owed: £1989.50
Limit: £3500
Monthly payment: £50.04 (2.5% balance min payment)
Rate: 18% APR

Credit Card 4 (Sainsburys)
Owed: £1497
Limit: £1500
Monthly payment: £34.14(2% balance min payment)
Rate: 22% APR

Credit Card 5 (Barclaycard)
Owed: £6323.73
LImit: £6500
Monthly payment: £141.07(2% balance min payment)
Rate: 6.9% APR

Summary
Combined with our 4 overdrafts (a total of £3850), we therefore have a total debt of £19373.65.

And we haven’t even mentioned student loans!! :undecided

Can you help us sort ourselves out?

THANKS!!!

Squidge123

zoearmfield wrote: »

JOINT OUTGOINGS

Food £300.00
Approximately £75 a week. We used to manage a £50 a week food shop, but food prices seem to have risen so much recently… Do you preplan meals? A lot of people on here have found that by doing a weekly meal plan and cooking extra and putting it in the freezer for future meals they have cut their food budget down. £300 a month is a lot for 2 people. There are 4 in my house (some nights there are 7) but we never spend that much a month.

Partner 1 Statement:

Although I have £250 free each month, it seems to vanish very quickly. Quite regularly I have to get taxis for work, which I have to pay for with my own money, and then claim back on expenses. This means that I always need to have cash in my purse, which can cause problems.

My main flaws are:

• When my money runs out, that doesn’t mean I stop spending…I’ll just pay for things on the HSBC credit card Would it be better to leave your card at home? I tried it for 1 month and found that I spent a whole lot less.
• I’m no good at being patient and saving up for things I want to buy. I’ll just go and buy them immediately and pay on the credit card Again leave them at home then you won't be able to buy it straight away.

Partner 2 Statement:

We do sometimes go to the cinema which ends up being nearly £20 with two of us, and used to go monthly, although haven’t been that recently now. Does your cinema have cheap Tuesdays or Thursdays? The Empire Cinema does both days meaning it only costs £9 for myself and my partner to go to see a movie

I don't know if anything that I've pointed out is going to be of any use. The things that I think would help you are:

• Each keep a spending diary and review at the end of every day/week to see what you're spending and where you can cut out.
• Organise a weekly meal plan and when you cook some meals cook extra to freeze it for future meals.
• Have a look on the Old Style board here for ideas.
• Orange do the 2 for 1 Wednesday deal or some cinemas have cheap days. The other option is Blockbuster - you can get 3 movies for the price of a cinema ticket.
• Leave the credit/debit cards at home when you go out and only take a set amount of money. That way when you're money is gone you won't be tempted to pay for anything else on the card.

Hope that helps and good luck x

tiny_courageous

Well done on posting and welcome to DFW!

your water bill is high - are you on a meter?
Gas and electric - also high. Are you with the cheapest supplier, do you switch things off when they are not in use?
Mobile phones - both high. Can you downgrade/switch to PAYG.
Home insurance -high, do you use price comparison sites, cashback etc. Same for your breakdown cover.

You say that if you have no cash left you buy things on the credit card - stop taking the credit card out with you! If you have to physically go home to get it, this gives you contemplation time about your purchase - do I genuinely need it?

Charity donations - nice if you can afford it, but can you?

JulieGeorgiana

zoearmfield wrote: »

Hey!


We need your help! We’ve given you loads of info here so hopefully you can all give us some advice!

We are a young unmarried couple (no kids or dependents), who bought our house last year with help from family, and both are in full time employment (although partner 2 was at risk of redundancy in December, but was retained in his present role). This has made us realise how at risk we are with our current financial situation if one of us was to lose our jobs.

We spent a year travelling the world in 2006, which put us in a huge amount of credit card debt, which we have never managed to pay off. Add to that the fact that we have then continued to use credit cards to pay for things, means that we are constantly in the same position.

We need 2012 to end with us in a better financial situation than we were in at the beginning of the year.

Here are the facts:
Monthly Income:
Salary 1: £1539 We are a family living on this type of wage only. So it can be done!
Salary 2: £1469
TOTAL: £3008


We have a joint account and separate accounts. We both contribute each month to the joint account, which is where all the bills/costs related to the house and car come out of.


JOINT OUTGOINGS


Car breakdown cover £ 5.25

Repayment for loan of house deposit £100.00 This is to a family member who lent us the deposit for our house
Life insurance £7.00 Important for mortgage
Joint gym membership £44.00 Cancel this and start walking!
We are considering cancelling this although it is a 3 month cancellation period
Mortgage £560.00
Council tax £119.00
TV Licence £10.62
Car insurance £47.65 This is high, have you looked around for the best rates and gotten the best deals? Maybe add a second driver to lower premiums... and go fully comp.
Water £39.29
Interest on joint bank account £7.00
We are consistently reaching our overdraft limit on this account (£900)
Gas & Electricity £100.00 This is high, you need to monitor your usage, make sure you are on the best tarriff for YOUR usage. Turn the thermostate down (you can wear a jumper and hat inside the house)
Home insurance £ 46.00 This is VERY high!
Virgin Media for internet, phone and tv £ 55.00 Okay the broadband is needed... but go freesat and you still save money!
We appreciate that this is a lot, however in order for work we need extremely fast internet connection.
Car repayments £159.79
We bought a new car in Jan 2010 and are making these monthly repayments
Food £300.00 This is VERY high for two adults! I have a health condition which means I need *some* specific products... yet feed 2 adults, 1 child, 2 cats and 2 rabbits on £50 a week Food and Cleaning products. Head over to the Old Style board on helps and tips on reducing this!
Approximately £75 a week. We used to manage a £50 a week food shop, but food prices seem to have risen so much recently…


Partner 1: (salary £1539)

PARTNER 1 PERSONAL OUTGOINGS


Contact Lenses £12.50
Contribution to personal pension £21.84
Charity donation £10.00
Bus pass £57.50
One of us drives a long distance to work, therefore the other one has to get the bus
Credit card 1 (HSBC) £40.00
Credit card 2 (Barclaycard) £100.00
Credit card 3 (Amazon) £50.00
Personal bank account interest £12.00
Again, always reaching the overdraft limit on this account (£1000)
Mobile phone bill £35.00 This is very high, get a cheap phone on renewal and get a contract which reflects your usage. I cut mine from £35 to £10!
Contribution towards joint account (rent/bills etc) £1000.00
This leaves me the following amount for sundry expenses
£250.16


Partner 1 Statement:

Although I have £250 free each month, it seems to vanish very quickly. Quite regularly I have to get taxis for work, which I have to pay for with my own money, and then claim back on expenses. This means that I always need to have cash in my purse, which can cause problems.

My main flaws are:

• When my money runs out, that doesn’t mean I stop spending…I’ll just pay for things on the HSBC credit card
• I’m no good at being patient and saving up for things I want to buy. I’ll just go and buy them immediately and pay on the credit card

You need to keep a spending diary to see where your money is going. if you buy something on the card it's not actually yours.

If we take December as an example month, the £250 was spent as follows:

• £37.65 on shopping for household items like towels
• £40.00 taking family to cinema
• £55.00 last minute xmas presents and new years eve tickets
• £30.00 on going out (but loads of other nights out were paid for on credit card)
• A large amount on bank fees as I extended my overdraft
• And the remainder on bits of food/drink shopping at Asda, Tesco etc…

I do manage my money carefully and maintain a monthly budget. I sit at payday and look at the month ahead, and budget set amounts for each thing. The problem is that sometimes I might not budget for something, which means then I end up paying for it on the credit card.

You seem very honest. But you can't sort out your debts unless you curb your spending habbits.

Partner 2: (salary £1469)

PARTNER 2 PERSONAL OUTGOINGS


Charity Donation £10.00
Sofa repayment £30.00
As part of our plan for saving money by staying in, we desperately needed a new sofa. This was just purchased 1 week ago.
Repayment of family loan £70.00
This has just finished in Jan 2012 so I will be now using this £70 to repay another debt
Fuel £160.00 Travelling 45 miles a day for work
Credit Card 4 (Sainsburys) £33.63
Credit Card 5 (Barclaycard) £140.00
Software for work £6.00 Necessary for work
Football £12.00 Weekly football
Personal loan repayment £88.22 Finishes July
Mobile phone bill £39.00 See above comment about high mobile bills
Bank overdraft (Santander) fee £10.00 Overdraft (£450) always at limit
Bank account (Barclays) fee £7 Overdraft(£1500) always at limit
Bank account interest (barclays) £12
Contribution towards Credit Card 2 £50
Contribution towards joint account (rent/bills etc) £575
This leaves me the following amount for sundry expenses £226.15


Partner 2 Statement:

In a month nearly all the spare money I have (£226.15) will be spent by withdrawing cash. My problem seems to be getting cash and frittering it away on little things here and there…gigs/going to the pub, shopping in places like B and Q for DIY items for the new house, some beers at the off licence etc etc etc. And soon enough it seems to have vanished. We do sometimes go to the cinema which ends up being nearly £20 with two of us, and used to go monthly, although haven’t been that recently now.

My main flaws are:

• Not maintaining a monthly budget, or monitoring where my money is being spent on a weekly basis. I never really know where I am up to, and over a year might end up being charge 3-4 times for exceeding my overdraft.
• Not saving for events that I know are coming up (e.g. birthdays, stag dos, weddings, holidays, car servicing) or planning my finances accordingly
• Still spending on my credit card, particularly at the end of the month when I’ve overspent on other things, but must have fuel to get to work. October was a bad month when I ended up spending £140 on my credit card for fuel as I had overspent on other things. I’m planning on trying to organise a lift share with a colleague so I can halve my fuel costs each month

Again very honest. You REALLY need to budget and change your mind-set on what you spend your money on. I haven't been to the in 6 months... and even then I got the tickets for free! You can't afford to spend the 'spare cash' plus some each month. You'll never get out of debt.


Savings
We have just over £560 currently in a savings account as when we moved into our new house, we thought it was important to have an emergency fund. This was the amount returned to us from our deposit on the rented house we lived in previously.

No use having savings earning less interest then the highest credit you have. If there was a REAL emergency you can add to your debt. Throw this at your debts right away!

Credit Cards


Credit Card 1 (HSBC)
Owed: £1703.24
Limit: £4000
Monthly payment: £42.58 (2.5% balance min payment)
Interest Rate: 21.9% APR

Credit Card 2 (Barclaycard)
Owed: £4010.18
Limit: £6550
Monthly payment: £150 (fixed)
Rate: 6.8% APR

Credit Card 3 (Amazon)
Owed: £1989.50
Limit: £3500
Monthly payment: £50.04 (2.5% balance min payment)
Rate: 18% APR

Credit Card 4 (Sainsburys)
Owed: £1497
Limit: £1500
Monthly payment: £34.14(2% balance min payment)
Rate: 22% APR

Credit Card 5 (Barclaycard)
Owed: £6323.73
LImit: £6500
Monthly payment: £141.07(2% balance min payment)
Rate: 6.9% APR

Summary
Combined with our 4 overdrafts (a total of £3850), we therefore have a total debt of £19373.65.

And we haven’t even mentioned student loans!! :undecided

Can you help us sort ourselves out?

THANKS!!!

Wow a lot of information. With £20k of debt only paying minimum balances and adding to it each month you really HAVE to sort your priorities. You have to monitor your spending habbits and spend less time going out and more time on the internet planning your groceries and getting your costs WELL down.

Your budgets are not to bad on the whole, but you don;t put money aside for Birthdays, Christmas, medical etc etc. You see the 'extra' income after your outgoings as 'fun money' but you really need to change this.

You need a spending diary.

You need a new mindset.

You need to stick to budget.

It can be done... I am debt free after 10 years!

Good Luck x

rising_from_the_ashes

Hi and welcome to the boards

A few comments from me below which I hope help - sorry if I make any "silly" comments but your SOA's in a different format from usual so I may easily miss something!

zoearmfield wrote: »

Here are the facts:
Monthly Income:
Salary 1: £1539
Salary 2: £1469
TOTAL: £3008

We have a joint account and separate accounts. We both contribute each month to the joint account, which is where all the bills/costs related to the house and car come out of.

Good starting point as it should ensure that all bills are paid on time and no payments can be accidently missed

JOINT OUTGOINGS
Car breakdown cover £ 5.25 Consider switching to AutoAid at renewal time - one off payment of £38 for a year

Repayment for loan of house deposit £100.00 This is to a family member who lent us the deposit for our house
Life insurance £7.00 Important for mortgage
Joint gym membership £44.00
We are considering cancelling this although it is a 3 month cancellation period How often do you use it? Can you justify the costs? If not, give your 3 months notice.....
Mortgage £560.00
Council tax £119.00
TV Licence £10.62 Should be £12.12
Car insurance £47.65 Check comparison sites at renewal time
Water £39.29 Have you got a meter? High for just 2 people
Interest on joint bank account £7.00
We are consistently reaching our overdraft limit on this account (£900)
Gas & Electricity £100.00 This is high too - do you have arrears? If not, check comparison sites for a better deal & also check your usage. If you do, do the above when the arrears are cleared
Home insurance £ 46.00 This is huge! Check comparison sites at renewal time
Virgin Media for internet, phone and tv £ 55.00
We appreciate that this is a lot, however in order for work we need extremely fast internet connection. Yup, but you can still get a high speed internet connection without paying for TV .....
Car repayments £159.79
We bought a new car in Jan 2010 and are making these monthly repayments How long until they finish?
Food £300.00
Approximately £75 a week. We used to manage a £50 a week food shop, but food prices seem to have risen so much recently…
Really high for 2 people.... try the Grocery Challenge on the Old Style board - as a comparison many couples manage on £100/month incl toiletries/household stuff

Partner 1: (salary £1539)

PARTNER 1 PERSONAL OUTGOINGS


Contact Lenses £12.50 Are these really essential......
Contribution to personal pension £21.84
Charity donation £10.00
Bus pass £57.50
One of us drives a long distance to work, therefore the other one has to get the bus
Credit card 1 (HSBC) £40.00
Credit card 2 (Barclaycard) £100.00
Credit card 3 (Amazon) £50.00
Personal bank account interest £12.00
Again, always reaching the overdraft limit on this account (£1000)
Mobile phone bill £35.00 When does the contract end? Switch to PAYG & use for emergencies only
Contribution towards joint account (rent/bills etc) £1000.00
This leaves me the following amount for sundry expenses
£250.16


Partner 1 Statement:

Although I have £250 free each month, it seems to vanish very quickly. Quite regularly I have to get taxis for work, which I have to pay for with my own money, and then claim back on expenses. This means that I always need to have cash in my purse, which can cause problems.
Keep a spending diary and write down everything that you buy - a coffee on the way to work each day (my personal demon!) adds up to £10+ / week ....

Partner 2: (salary £1469)

PARTNER 2 PERSONAL OUTGOINGS

Charity Donation £10.00
Sofa repayment £30.00
As part of our plan for saving money by staying in, we desperately needed a new sofa. This was just purchased 1 week ago.mmmmm for anything else that needs replacing - try Freecycle, Freegle, 2nd hand shops etc - you need to sort yourselves out before buying new things (sorry)
Repayment of family loan £70.00
This has just finished in Jan 2012 so I will be now using this £70 to repay another debt
Fuel £160.00 Travelling 45 miles a day for work
Credit Card 4 (Sainsburys) £33.63
Credit Card 5 (Barclaycard) £140.00
Software for work £6.00 Necessary for work
Football £12.00 Weekly football
Personal loan repayment £88.22 Finishes July
Mobile phone bill £39.00 As comments above
Bank overdraft (Santander) fee £10.00 Overdraft (£450) always at limit
Bank account (Barclays) fee £7 Overdraft(£1500) always at limit
Bank account interest (barclays) £12
Contribution towards Credit Card 2 £50
Contribution towards joint account (rent/bills etc) £575
This leaves me the following amount for sundry expenses £226.15

Savings
We have just over £560 currently in a savings account as when we moved into our new house, we thought it was important to have an emergency fund. This was the amount returned to us from our deposit on the rented house we lived in previously.
So why didn't you use this money for a sofa, rather than buying a new one on credit?

Credit Cards
Credit Card 1 (HSBC)
Owed: £1703.24
Limit: £4000
Monthly payment: £42.58 (2.5% balance min payment)
Interest Rate: 21.9% APR

Credit Card 2 (Barclaycard)
Owed: £4010.18
Limit: £6550
Monthly payment: £150 (fixed)
Rate: 6.8% APR

Credit Card 3 (Amazon)
Owed: £1989.50
Limit: £3500
Monthly payment: £50.04 (2.5% balance min payment)
Rate: 18% APR

Credit Card 4 (Sainsburys)
Owed: £1497
Limit: £1500
Monthly payment: £34.14(2% balance min payment)
Rate: 22% APR

Credit Card 5 (Barclaycard)
Owed: £6323.73
LImit: £6500
Monthly payment: £141.07(2% balance min payment)
Rate: 6.9% APR

Sorry this will sound harsh but it's meant with good intentions .....

Basically, you need to sit down, look at the above SOA and decide what are absolutely essential spends and what you can cut back on...... things like the Gym, TV, contact lenses etc etc and any money saved from these cuts needs to be thrown at the debts.

If something breaks/needs replacing - try the free sites / 2nd hand shops first - you don't always need to buy things new and if you can get something free that will last a few years until you're "sorted" then that's much better than taking out more credit/sticking it on a cc.

You both need to keep a spending diary - there is money left over each month but you need to find out where it's disappearing to ..... and plug the hole!..... good luck

MFWannabe

zoearmfield wrote: »

Hey!


We need your help! We’ve given you loads of info here so hopefully you can all give us some advice!

We are a young unmarried couple (no kids or dependents), who bought our house last year with help from family, and both are in full time employment (although partner 2 was at risk of redundancy in December, but was retained in his present role). This has made us realise how at risk we are with our current financial situation if one of us was to lose our jobs.

We spent a year travelling the world in 2006, which put us in a huge amount of credit card debt, which we have never managed to pay off. Add to that the fact that we have then continued to use credit cards to pay for things, means that we are constantly in the same position.

We need 2012 to end with us in a better financial situation than we were in at the beginning of the year.

Here are the facts:
Monthly Income:
Salary 1: £1539
Salary 2: £1469
TOTAL: £3008


We have a joint account and separate accounts. We both contribute each month to the joint account, which is where all the bills/costs related to the house and car come out of.


JOINT OUTGOINGS


Car breakdown cover £ 5.25

Repayment for loan of house deposit £100.00 This is to a family member who lent us the deposit for our house
Life insurance £7.00 Important for mortgage
Joint gym membership £44.00
We are considering cancelling this although it is a 3 month cancellation period- Cancel. you need this to pay off debts
Mortgage £560.00
Council tax £119.00
TV Licence £10.62
Car insurance £47.65 - check comparison sites to see if you can get cheaper
Water £39.29
Interest on joint bank account £7.00
We are consistently reaching our overdraft limit on this account (£900)
Gas & Electricity £100.00 - Again check comparison sites to make sure you are on the best deal you can get. This seems high for just 2 of you
Home insurance £ 46.00 - Again check comparison sites to see if you can get cheaper. This is high
Virgin Media for internet, phone and tv £ 55.00
We appreciate that this is a lot, however in order for work we need extremely fast internet connection.
Car repayments £159.79
We bought a new car in Jan 2010 and are making these monthly repayments
Food £300.00 - You can cut this by at least £50. Approximately £75 a week. We used to manage a £50 a week food shop, but food prices seem to have risen so much recently…You need to shop around. If you spend more when you actually go to the shop try online shopping. Although you have to pay for delivery it usually works out cheaper as you stick to your list rather than getting distracted by other offers in store


Partner 1: (salary £1539)

PARTNER 1 PERSONAL OUTGOINGS


Contact Lenses £12.50
Contribution to personal pension £21.84
Charity donation £10.00 - Can you afford this at the moment?
Bus pass £57.50
One of us drives a long distance to work, therefore the other one has to get the bus
Credit card 1 (HSBC) £40.00
Credit card 2 (Barclaycard) £100.00
Credit card 3 (Amazon) £50.00
Personal bank account interest £12.00
Again, always reaching the overdraft limit on this account (£1000)
Mobile phone bill £35.00 - See if you can change to a lower tarriff
Contribution towards joint account (rent/bills etc) £1000.00
This leaves me the following amount for sundry expenses
£250.16


Partner 1 Statement:

Although I have £250 free each month, it seems to vanish very quickly. Quite regularly I have to get taxis for work, which I have to pay for with my own money, and then claim back on expenses. This means that I always need to have cash in my purse, which can cause problems. Why do you end up getting taxis quite often?

My main flaws are:

• When my money runs out, that doesn’t mean I stop spending…I’ll just pay for things on the HSBC credit card - don't take it out with you!! If you haven't got it then you can't spend on it!
• I’m no good at being patient and saving up for things I want to buy. I’ll just go and buy them immediately and pay on the credit card. You have to stop this if you want to become debt free. If you carry on like this you will just get deeper and deeper in debt

If we take December as an example month, the £250 was spent as follows:

• £37.65 on shopping for household items like towels
• £40.00 taking family to cinema
• £55.00 last minute xmas presents and new years eve tickets
• £30.00 on going out (but loads of other nights out were paid for on credit card)
• A large amount on bank fees as I extended my overdraft
• And the remainder on bits of food/drink shopping at Asda, Tesco etc…

I do manage my money carefully and maintain a monthly budget. I sit at payday and look at the month ahead, and budget set amounts for each thing. The problem is that sometimes I might not budget for something, which means then I end up paying for it on the credit card. You are not managing money carefully if you end up overspending every month. You need to sit down and work out a proper budget allowing for every expenditure and stick to it. Fill in the soa on www.makesenseofcards.com


Partner 2: (salary £1469)

PARTNER 2 PERSONAL OUTGOINGS


Charity Donation £10.00
Sofa repayment £30.00
As part of our plan for saving money by staying in, we desperately needed a new sofa. This was just purchased 1 week ago. so you haven't saved money; as it's now costing £30 per month to stay in!!
Repayment of family loan £70.00
This has just finished in Jan 2012 so I will be now using this £70 to repay another debt. Put this towards highest interest debt
Fuel £160.00 Travelling 45 miles a day for work
Credit Card 4 (Sainsburys) £33.63
Credit Card 5 (Barclaycard) £140.00
Software for work £6.00 Necessary for work
Football £12.00 Weekly football
Personal loan repayment £88.22 Finishes July - Ask for a settlement figure to see if it would be cheaper to pay it off now. then also use this amount to pay off the highest interest debt first
Mobile phone bill £39.00 - Again check to see if you can go to a lower tarriff
Bank overdraft (Santander) fee £10.00 Overdraft (£450) always at limit
Bank account (Barclays) fee £7 Overdraft(£1500) always at limit
Bank account interest (barclays) £12
Contribution towards Credit Card 2 £50
Contribution towards joint account (rent/bills etc) £575
This leaves me the following amount for sundry expenses £226.15


Partner 2 Statement:

In a month nearly all the spare money I have (£226.15) will be spent by withdrawing cash. My problem seems to be getting cash and frittering it away on little things here and there…gigs/going to the pub, shopping in places like B and Q for DIY items for the new house, some beers at the off licence etc etc etc. And soon enough it seems to have vanished. We do sometimes go to the cinema which ends up being nearly £20 with two of us, and used to go monthly, although haven’t been that recently now. I think you both need to set yourselves a set amount of 'pocket' money each per week to stop this just getting cash out as and when and frittering it away

My main flaws are:

• Not maintaining a monthly budget, or monitoring where my money is being spent on a weekly basis. I never really know where I am up to, and over a year might end up being charge 3-4 times for exceeding my overdraft.
• Not saving for events that I know are coming up (e.g. birthdays, stag dos, weddings, holidays, car servicing) or planning my finances accordingly
• Still spending on my credit card, particularly at the end of the month when I’ve overspent on other things, but must have fuel to get to work. October was a bad month when I ended up spending £140 on my credit card for fuel as I had overspent on other things. I’m planning on trying to organise a lift share with a colleague so I can halve my fuel costs each month

Savings
We have just over £560 currently in a savings account as when we moved into our new house, we thought it was important to have an emergency fund. This was the amount returned to us from our deposit on the rented house we lived in previously.

Credit Cards


Credit Card 1 (HSBC)
Owed: £1703.24
Limit: £4000
Monthly payment: £42.58 (2.5% balance min payment)
Interest Rate: 21.9% APR

Credit Card 2 (Barclaycard)
Owed: £4010.18
Limit: £6550
Monthly payment: £150 (fixed) Rate: 6.8% APRWhat is the minimum payment you need to make on this card per month? You should be putting more towards the highest interest debts first before concentrating on paying this one off


Credit Card 3 (Amazon)
Owed: £1989.50
Limit: £3500
Monthly payment: £50.04 (2.5% balance min payment)
Rate: 18% APR

Credit Card 4 (Sainsburys)
Owed: £1497
Limit: £1500
Monthly payment: £34.14(2% balance min payment)
Rate: 22% APR - could you move this to Credit card 2 as that card has a much lower interest rate

Credit Card 5 (Barclaycard)
Owed: £6323.73
LImit: £6500
Monthly payment: £141.07(2% balance min payment)
Rate: 6.9% APR

Summary
Combined with our 4 overdrafts (a total of £3850), we therefore have a total debt of £19373.65.

And we haven’t even mentioned student loans!! :undecided

Can you help us sort ourselves out?

THANKS!!!

Hi
I've made some comments above where you could make some cutbacks.
You also need to fill in a joint soa using the one on www.makesenseofcards.com then you will have a proper budget that you need to stick to!! You need to budget for every expenditure.
If you carry on with your current spending then you are going to be in very very deep water. At the moment if you rein in your spending then you can get these debts under control and paid off.
Are you able to get a new 0% credit card to move the high interest debts to?

Mikazaru

zoearmfield wrote: »

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Monthly Income:
Salary 1: £1539
Salary 2: £1469
TOTAL: £3008


We have a joint account and separate accounts. We both contribute each month to the joint account, which is where all the bills/costs related to the house and car come out of.


JOINT OUTGOINGS


Car breakdown cover £ 5.25

Repayment for loan of house deposit £100.00 This is to a family member who lent us the deposit for our house
Life insurance £7.00 Important for mortgage
Joint gym membership £44.00
We are considering cancelling this although it is a 3 month cancellation period Cancel, you don't need.
Mortgage £560.00
Council tax £119.00 Can you pay over 12 months?
TV Licence £10.62
Car insurance £47.65 Shop around and use cashback sites?
Water £39.29 Can you get a meter?
Interest on joint bank account £7.00
We are consistently reaching our overdraft limit on this account (£900)
Gas & Electricity £100.00 Seems high, can you get an energy monitor from the library for a while?
Home insurance £ 46.00
Virgin Media for internet, phone and tv £ 55.00
We appreciate that this is a lot, however in order for work we need extremely fast internet connection.Cut the TV out of the package.
Car repayments £159.79
We bought a new car in Jan 2010 and are making these monthly repayments How long left?
Food £300.00
Approximately £75 a week. We used to manage a £50 a week food shop, but food prices seem to have risen so much recently…
Have a look at the OS board for tips on reducing.

Partner 1: (salary £1539)

PARTNER 1 PERSONAL OUTGOINGS


Contact Lenses £12.50
Contribution to personal pension £21.84
Charity donation £10.00 Cut until debt free.
Bus pass £57.50
One of us drives a long distance to work, therefore the other one has to get the bus
Credit card 1 (HSBC) £40.00
Credit card 2 (Barclaycard) £100.00
Credit card 3 (Amazon) £50.00
Personal bank account interest £12.00
Again, always reaching the overdraft limit on this account (£1000)
Mobile phone bill £35.00 Can you drop a tariff or two?
Contribution towards joint account (rent/bills etc) £1000.00
This leaves me the following amount for sundry expenses
£250.16


Partner 1 Statement:

Although I have £250 free each month, it seems to vanish very quickly. Quite regularly I have to get taxis for work, which I have to pay for with my own money, and then claim back on expenses. This means that I always need to have cash in my purse, which can cause problems.

My main flaws are:

• When my money runs out, that doesn’t mean I stop spending…I’ll just pay for things on the HSBC credit card
• I’m no good at being patient and saving up for things I want to buy. I’ll just go and buy them immediately and pay on the credit card

If we take December as an example month, the £250 was spent as follows:

• £37.65 on shopping for household items like towels
• £40.00 taking family to cinema
• £55.00 last minute xmas presents and new years eve tickets
• £30.00 on going out (but loads of other nights out were paid for on credit card)
• A large amount on bank fees as I extended my overdraft
• And the remainder on bits of food/drink shopping at Asda, Tesco etc…

I do manage my money carefully and maintain a monthly budget. I sit at payday and look at the month ahead, and budget set amounts for each thing. The problem is that sometimes I might not budget for something, which means then I end up paying for it on the credit card.

Partner 2: (salary £1469)

PARTNER 2 PERSONAL OUTGOINGS


Charity Donation £10.00 Again, cut till debt free
Sofa repayment £30.00
As part of our plan for saving money by staying in, we desperately needed a new sofa. This was just purchased 1 week ago.
Repayment of family loan £70.00
This has just finished in Jan 2012 so I will be now using this £70 to repay another debt
Fuel £160.00 Travelling 45 miles a day for work
Credit Card 4 (Sainsburys) £33.63
Credit Card 5 (Barclaycard) £140.00
Software for work £6.00 Necessary for work
Football £12.00 Weekly football
Personal loan repayment £88.22 Finishes July
Mobile phone bill £39.00 Drop a tariff or two?
Bank overdraft (Santander) fee £10.00 Overdraft (£450) always at limit
Bank account (Barclays) fee £7 Overdraft(£1500) always at limit
Bank account interest (barclays) £12
Contribution towards Credit Card 2 £50
Contribution towards joint account (rent/bills etc) £575
This leaves me the following amount for sundry expenses £226.15


Partner 2 Statement:

In a month nearly all the spare money I have (£226.15) will be spent by withdrawing cash. My problem seems to be getting cash and frittering it away on little things here and there…gigs/going to the pub, shopping in places like B and Q for DIY items for the new house, some beers at the off licence etc etc etc. And soon enough it seems to have vanished. We do sometimes go to the cinema which ends up being nearly £20 with two of us, and used to go monthly, although haven’t been that recently now.

My main flaws are:

• Not maintaining a monthly budget, or monitoring where my money is being spent on a weekly basis. I never really know where I am up to, and over a year might end up being charge 3-4 times for exceeding my overdraft.
• Not saving for events that I know are coming up (e.g. birthdays, stag dos, weddings, holidays, car servicing) or planning my finances accordingly
• Still spending on my credit card, particularly at the end of the month when I’ve overspent on other things, but must have fuel to get to work. October was a bad month when I ended up spending £140 on my credit card for fuel as I had overspent on other things. I’m planning on trying to organise a lift share with a colleague so I can halve my fuel costs each month

Savings
We have just over £560 currently in a savings account as when we moved into our new house, we thought it was important to have an emergency fund. This was the amount returned to us from our deposit on the rented house we lived in previously.

Credit Cards


Credit Card 1 (HSBC)
Owed: £1703.24
Limit: £4000
Monthly payment: £42.58 (2.5% balance min payment)
Interest Rate: 21.9% APR

Credit Card 2 (Barclaycard)
Owed: £4010.18
Limit: £6550
Monthly payment: £150 (fixed)
Rate: 6.8% APR

Credit Card 3 (Amazon)
Owed: £1989.50
Limit: £3500
Monthly payment: £50.04 (2.5% balance min payment)
Rate: 18% APR

Credit Card 4 (Sainsburys)
Owed: £1497
Limit: £1500
Monthly payment: £34.14(2% balance min payment)
Rate: 22% APR

Credit Card 5 (Barclaycard)
Owed: £6323.73
LImit: £6500
Monthly payment: £141.07(2% balance min payment)
Rate: 6.9% APR

Summary
Combined with our 4 overdrafts (a total of £3850), we therefore have a total debt of £19373.65.

And we haven’t even mentioned student loans!! :undecided

Can you help us sort ourselves out?

THANKS!!!

Some comments above...
Can you shuffle your debts around to the lowest APR cards. Are you sure you've had your lightbulb moment? Have a look around the site at ways of reducing costs; car insurance, electric usage, petrol, food bills etc...

banwa

Hi there,

It's probably very difficult to take any advice I might give seriously when I am in more debt than you but I would recommend doing the SOA that this website gives you, as it will include all those hidden extras I didn't even realise we were forking out for, birthdays, Christmas, car maintenance, haircuts, clothes etc. Then you can truly see how much money you do and don't have.

You sound just like my husband and me when we first bought our house. We were very over stretched. Luckily for you, it looks like you have had you LBM much earlier, and you can make some changes now to avoid the race-to-be-debt-free-before-40;).

zoearmfield

Thanks so much for all your advice.

We will definitely look into all the suggestions about price comparisons/energy monitoring/cutting food bills etc.

And we will juggle the credit cards and use the savings to pay that off.

Unfortunately I think our home insurance is high as we were burgled in October 2010, and claimed on the insurance, which meant our premium is now higher.

Thanks again though...heres to a more realistic and strict 2012!:)