I'm new and on a mission to become debt free - any help appreciated!!

TakingControl

Well done for posting the SOA, here some thoughts:

Electric - £96 a month is huge, are you in arrears?
Groceries - £400 a month couldbe easy changed to 300
Presents - £100 a month? :eek:
Entertainment - £700 a month? :eek:
Wat is the medical at £120 a month for?

DitchTheDebt

The £700 entertainment was more a guess tbh, we hardly ever go out but last time we kept a spending log we seemed to spend about £165 a week so I wanted to be sure I'd had put in what we do spend, we have started a new spending log so I guess I will soon see how much we actually spend, I've had a budget for ages and it always says we are in the green by loads but when it comes down to it we aren't so something is going wrong somewhere and in order to get debt free we need to work out what that is. Thing is I suppose is the bank has bills coming out for about 10 days at the start of the month so we don't really know how we are and because my pay is sporadic is also makes it very tricky, some customers pay a month upfront some just pay for the week, some pay odd amounts through the month and I can't change that so budgeting is hard also different things occur each month e.g. this year...

Jan close friends 40th birthday so we went out and also got her a gift that cost £200 if you include the transport, tickets, drinks, food, outfit, having my hair and nails done.

Feb - we went on holiday - this has done a fair bit of damage I know and now we are back I feel ready to tackle the debt with a positive attitude. I lost a lot of my earnings while I was away and obviously we spent money and had the holiday to pay for. I know this was not a good move in relation to our money issues but in terms of my family and mental well being it has been 100% the right thing to do tbh.

March - I'm am not going to spend money on anything we do not essentially need to live on and today have paid £1300 off one credit card which I'm very happy about. If we can possibly pay more off then we will do.

April - Dh's friend is getting married so we need to pay for either a very expensive taxi or a hotel unless I drive which would make more sense.

June - Best friends 30th birthday, will need a hotel for that for sure but I'm hoping for a travelodge so it's not too expensive. I have said I will paint her a picture and she is thrilled so at least that saves us something.

July dh's birthday.

August dd1's birthday we promised her a party as its her 13th and she hasn't had one since she's been at high school.

So it's hard to budget when different things happen each month, my pay is sporadic and we are both useless with giving in easily to temptation, we use the phase "we work hard and it's not gonna make much difference" we now need to have the attitude that every penny counts, basically we need to grow up and take responsibility and accept if we want to get out of debt and we want a house it's going to be hard and we are going to have to make sacrifices.

DitchTheDebt

Electric - £96 a month is huge, are you in arrears? I'm a childminder so I guess I use more than most people, same for groceries, I do dinner for up to 7 kids and I don't want their parents complaining I'm not feeding them well enough.
Groceries - £400 a month couldbe easy changed to 300
Presents - £100 a month? - Probably is if you average it out especially with christmas, it's not unusal to have 30 children to buy for.
Entertainment - £700 a month?
Wat is the medical at £120 a month for? I'm on anti depressants for pmt, see a counsellor, have to see a chiropodist and dh has problems with his sinuses so has to use a steroid type spray and I get acne too so have a tube of cream for that.

DitchTheDebt

Can anyone give me any more words of advice?

beecher2

Keep a spending diary to work out where your £510 a month is going.

Drastically cut down on entertainment, and re-assess what you 'need' to buy and what you'd 'like' to buy. Maybe give yourselves £50/month each for entertainment (money you can get from cutting down your food expenditure), and when it is gone, it is gone.

Explain to the parents of the 30 children that you can't buy them the expensive presents you've bought in the past - you may well find that they're in the same position financially, and are relieved. £1200 a year on presents is wildly excessive, even if you weren't in debt.

Realistically you should be able to find at least £1000 a month extra to throw at debts, while still living well.

katsu

DitchTheDebt wrote: »

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 4000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4000

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 470
Management charge (leasehold property).. 0
Council tax............................. 136
Electricity............................. 96 - this is high. Have you switched recently? You looked at energy saving advice such as turning stuff off, not using tumble dryer etc.
Gas..................................... 60 - as above, check hot water thermostat etc
Oil..................................... 0
Water rates............................. 56
Telephone (land line)................... 0
Mobile phone............................ 39 - if you are not in contract look at switching and online deals. If in contract drop a tariff.
TV Licence.............................. 13
Satellite/Cable TV...................... 45 - go freeview
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 40 - shop in your wardrobe for a while look at eBay for the kids.
Petrol/diesel........................... 400 - read martin's tips.
Road tax................................ 35
Car Insurance........................... 125 - this is high. Look at comparison. Sites.
Car maintenance (including MOT)......... 70 - are you saving this? If not you are spending more each month somewhere else.
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 120 - look at a pre-payment cert
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 23
Life assurance ......................... 11
Other insurance......................... 7 -for what?
Presents (birthday, christmas etc)...... 100 - you can halve this.
Haircuts................................ 30 - look at a local college
Entertainment........................... 700 - if you want the house this needs to be cut, ideally by 75%
Holiday................................. 30 - could this be the birthday gift for dh (and you)?
Emergency fund.......................... 0
Total monthly expenses.................. 3026


Assets
Cash.................................... 1000
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 3000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
credit cards X 2...............5000......85........0
bank loan......................6500......257.......13.9
student loan...................750.......92........NaN
small loan.....................500.......30........0
Total unsecured debts..........12750.....464.......-


Monthly Budget Summary
Total monthly income.................... 4,000
Expenses (including HP & secured debts). 3,026
Available for debt repayments........... 974
Monthly UNsecured debt repayments....... 464
Amount left after debt repayments....... 510 - step 1 is to go thru bank statements and find where this goes.

Personal Balance Sheet Summary
Total assets (things you own)........... 3,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,750
Net Assets.............................. -9,750

I've made big cuts in yOur spending. If you want to clear your debt and save for a mortgage then I think you are looking at a lifestyle change.

Pressies can be cut thru using sales and shopping all year round.

Good luck

DitchTheDebt

Electricity............................. 96 - this is high. Have you switched recently? You looked at energy saving advice such as turning stuff off, not using tumble dryer etc. my husband changed to the tariff where you pay for what you use but he keeps forgetting to ring with metre readings so I will chase him on this and see if we have overpaid (I hope we have and then we can use that towards the debt) same for gas, we've been using the radiators and clothes horse to dry clothes as much as we can and soon we can use the washing line again
Gas..................................... 60 - as above, check hot water thermostat etc [COLOR="rgb(255, 140, 0)"] we recently had a new boiler put in so i'm hoping that will have made it more energy efficent [/COLOR]
Oil..................................... 0
Water rates............................. 56
Telephone (land line)................... 0
Mobile phone............................ 39 - if you are not in contract look at switching and online deals. If in contract drop a tariff. [COLOR="rgb(255, 140, 0)"] this tariff is for mine and my eldest daughters phone's, my husband has a work phone [/COLOR]
TV Licence.............................. 13
Satellite/Cable TV...................... 45 - go freeview [COLOR="rgb(255, 140, 0)"]this covers our phoneline, internet and sky, my husband managed to ring and get a good deal, is it not that good a deal then? [/COLOR]
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 40 - shop in your wardrobe for a while look at eBay for the kids. we are on a total clothes spend ban for now as we all have enough but at some point we will need some things so the £40 is what I guess as an average for when we do need things, I have set up a £70 savings account which i intend to leave alone for things like clothes/ car repairs im not sure that will be enough though?
Petrol/diesel........................... 400 - read martin's tips. i have joined the cheap petrol site and I use the lowest priced one in the area but it still costs me £40 a week and my husband £50.
Road tax................................ 35
Car Insurance........................... 125 - this is high. Look at comparison. Sites. [COLOR="rgb(255, 140, 0)"] we do that a lot but ours are high due to our age and accident records [/COLOR]
Car maintenance (including MOT)......... 70 - are you saving this? If not you are spending more each month somewhere else.
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 120 - look at a pre-payment cert [COLOR="rgb(255, 140, 0)"] have realise i had added the rent i pay per month for a room i use to do art in, I'm hoping it will make money at some point and I can gain experience in the meantime before it makes money I am using it as therapy, it's possibly a luxury i can ill afford but it's something i have worked very hard to gain and would be heart broken to give up, I have only had it 2 months so far [/COLOR]
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 23
Life assurance ......................... 11
Other insurance......................... 7 -for what? [COLOR="rgb(255, 140, 0)"]this is for my work insurance[/COLOR]
Presents (birthday, christmas etc)...... 100 - you can halve this. [COLOR="rgb(255, 140, 0)"]I will try to get this down[/COLOR]
Haircuts................................ 30 - look at a local college[COLOR="rgb(255, 140, 0)"] my sister does my husbands and childrens hair and very occasionally mine, she charges a nominal amount. I usually use a salon because my sister will only wet cut my hair and I'm useless at girlie things so I need it styled[/COLOR]
Entertainment........................... 700 - if you want the house this needs to be cut, ideally by 75% [COLOR="rgb(255, 140, 0)"]at the moment it has been cut right down until we see how much we can afford. We try to do cheap things like have friends over or visit them, go swimming etc. My fall down is when I get drunk on the odd weekend and order a take away but I'm aiming to be healthier and drink less so hopefully I will be good! [/COLOR]
Holiday................................. 30 - could this be the birthday gift for dh (and you)?[COLOR="rgb(255, 140, 0)"] we will not be having any more holidays until our debts are cleared [/COLOR]

The £50 a month is a good idea and I have discussed it with my husband so we are going to have a jar each per month with our money in so at least it doesn't feel like we have nothing when we are trying so hard [smile]

Thanks for all the help and encouragement.

DitchTheDebt

Hi I'm back, DH says we need tyres for our cars, does anyone know the cheapest place for this?

Tuesday_Tenor

>>>> Other insurance......................... 7 -for what? [COLOR="rgb(255, 140, 0)"]this is for my work insurance[/COLOR]

You should really be keeping separate accounts for everything to do wth your self-employed business. Think same applies for the art room rent?

heartbreak_star

Google your local area for specialist tyre places, they're better than any chain garages!

HBS x