Debt Free in Three!

Jonny_Debt

Hello all!

I have been on these forums for years but have finally decided it is time to sort out our finances and pay off our HUGE debts! (I have registered as a new user as I want to be anonymous). My partner and I have been living beyond our means for years now, using credit cards – then getting loans to pay off credit cards before racking up the debts again – not good. Our dream is to buy our own house but first we need to tackle our debts. We want to pay all of our debts off in 3 years maximum.

A bit about us, we are married and living in a 1 bedroom flat with no children. We both work full time and have debt of around £29k. (Just typing that hurt!). Our debts are in the form of:

2 loans totalling aprox 22k
2 credit cards totalling aprox £4500
2 overdrafts totalling aprox £2800

We have worked out our budget and it looks like we should be able to pay off our debts in 3 years if we are very strict and can live on £100 per week (for food, going out, gifts, clothes etc). However, we would ideally love to pay off our debt in less time than this.

We are currently thinking of ways to earn some extra money to throw at our debts but so far we are both a bit clueless! I am an I.T professional with a good degree so have been thinking of maybe doing some form of tutoring? I also love to bake and have made wedding cakes for a couple of my friends, I would love to do this for some money now but don’t really know where to start.

We are going to try and see this as a fun challenge, as I have been on these forums for some time, I know what a lovely and extremely helpful bunch of people you are and believe by keeping some sort of diary that we can both add to would really help us stay motivated.

I will post our SOA a bit later on.

Thanks for reading – I really appreciate it!

Jonny_Debt

Ok - so here is our SOA. It is even worse than we thought! :eek:

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 1300
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2700

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 795
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 32.5
Gas..................................... 32.5
Oil..................................... 0
Water rates............................. 19.96
Telephone (land line)................... 0
Mobile phone............................ 70
TV Licence.............................. 12.12
Satellite/Cable TV...................... 50
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 20
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).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 13
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1385.08


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
Natwest Loan...................11388.....365.......12
Natwest Overdraft..............2000......0.........0
Barclaycard....................5111......115.......11.9
Sainsburys Loan................11500.....385.......10
HSBC Overdraft.................800.......0.........0
Halifax Credit Card............485.......27........22
Total unsecured debts..........31284.....892.......-


Monthly Budget Summary
Total monthly income.................... 2,700
Expenses (including HP & secured debts). 1,385.08
Available for debt repayments........... 1,314.92
Monthly UNsecured debt repayments....... 892
Amount left after debt repayments....... 422.92

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -31,284
Net Assets.............................. -31,284

Jonny_Debt

Well, today has been good. Not spent anything, Yipee. We have both also become smoke free today, we simply can't afford it on our budget. Now just need to focus on other ways to save money and get some extra income. Just listed a load of stuff on eBay, fingers crossed we will make something. Any money we make will be used to pay credit cards. Good day so far!

Jonny_Debt

Morning! Not sure if anyone is reading this but going to keep updating anyway - I guess it may help me stay on track.

Well - we managed to not smoke yesterday which is great but we didn't sleep very well and I wasn't in the best of moods - I am sure things will get better. May subscribe to the giving up smoking thread.

Going to try for another no spend day today - I have got my lunch ready to take to work, have plenty of food in for dinner thanks to lots of leeks and kale from the allotment. I had made a meal plan for the week but the veg from the allotment means I am going to turn the sausage and mash from my meal plan to bubble and squeak with sausages. Yummy!!

If anyone is reading this diary - I would love some feedback on my SOA.

Have a lovely day everyone.

piglet39

:wave: I'm reading!

TBH your SOA looks pretty honed to me. Are you snowballing your debts? Your APR's look pretty reasonable but as I'm sure you know - general advice is to throw everything at the highest interest debt first.

Love your idea on living on a £100 per week. I sort of do the same thing (not the amount though). On payday each month I pay everything (DD's and SO's all come out on the first 3 days of the month) and overpay what I can to the CC. This then leaves me with zilch but I know that if I have zilch I can't overspend IYSWIM! On Friday each week when the CTC and DS1's keep gets paid I pay my rent (rounded up to the nearest £5.00 cos I have this thing that I like to have rent 'free' time in December) and I literally live on the rest - circa £60.00 for food/petrol. After groceries I then PAD (A Payment A Day has become addictive!) so as each day goes by I pay a little bit more off the CC. I have to say that this seemed an impossibly small sum of money to live on at first but within a relatively short period of time it felt normal!

You have a healthy surplus - do you actually 'see' this £400?

Piglet

Jonny_Debt

Hi piglet!

Thanks for reading. Well, no we don't see the £400 each month. I have noticed that on our SOA I have got our income down as £2700 - it is actually £2650.

On top of the bills and loans - we pay off each month:

£150 - to Barclaycard
£30 - to HSBC OD
£50 - to Halifax CC.
£10 - for Lotto.

This leaves us with aprox £123 per week. We draw at £100 each week and this is all we can spend. It seems to be working well so far (we are on week 3) but I just wish we could make some extra cash to throw at our debts.

Anyway - have a lovely day!

Jonny_Debt

Just made £58 on ebay! Going to use this to make an extra payment to Halifax card.

piglet39

Good morning!

Congrats on the ebay sale. I shall be sorting DS2 and DS3's rooms at the weekend and selling whatever isn't nailed down! Well...shall leave them with the beds obv lol but at 18 and 14 they don't really need all that Brio and Knex!!!!

How's the cutting down/no smoking going? I didn't buy any yesterday so I was able to PAD that spend today.

Have a good day

Piglet

Jonny_Debt

Hi! Thanks for the message Piglet - it is good to know someone is reading! Have you got a diary I can follow?

Anyway - yes, I was really pleased with the ebay sales - just need to get it all packed up now. Got some more items listed at the moment and plan to list more stuff over the weekend - it is actually a good feeling getting rid of stuff, I find when it has gone you don't miss it. We also sold an old phone on envirophone yesterday, only got £10 for it but every little helps.

We have still managed to both stay smoke free! Day 3 now, it is difficult and we are both a bit moody but it is all worth it. I am just thinking of the money we are saving. We had a friend round last night - we would normally have had a bottle of wine each and smoked a fair bit, but last night we just drank tea. In fact - in the last 2 weeks we have only had a drink on one evening - I used to drink nearly every night so this is a huge saving.

We are still trying to think of ways to make extra money - we are going to run out of stuff to ebay soon!

Wednesday is a good day for us as we get to take out the £100 for the week. Will be doing my meal plan before shopping - we have to be extra careful this week as it is both of our Dad's Birthdays (luckily we have already got Mother's day cards and presents ready to post)

Right - have a lovely day all.

Jonny_Debt

Wow - I forgot I started this thread. I may resurrect it to keep me on track.

I am still here paying off debts - seems to be never ending at times but I am glad to see that I have stuck to it now for over a year.

We are moving out of our flat next month - we have decided to move into a flat share with a friend to save money. Not ideal when I am almost 40 - but we will be saving a fair bit of money on both rent and bills - and that flat is lovely so I am sure it will be fine.

As soon as we have paid off all this debt - we can start thinking about saving for a deposit to buy our own place. I think it is the thought of that which is keeping me going.

Anyway - have a lovely day and weekend all!

little_miss_muppet_face

Jonny_Debt wrote: »

Wow - I forgot I started this thread. I may resurrect it to keep me on track.

I am still here paying off debts - seems to be never ending at times but I am glad to see that I have stuck to it now for over a year.

We are moving out of our flat next month - we have decided to move into a flat share with a friend to save money. Not ideal when I am almost 40 - but we will be saving a fair bit of money on both rent and bills - and that flat is lovely so I am sure it will be fine.

As soon as we have paid off all this debt - we can start thinking about saving for a deposit to buy our own place. I think it is the thought of that which is keeping me going.

Anyway - have a lovely day and weekend all!

So, have you got an update on how much you have managed to pay off in the last year ? Hows the no smoking going..? Still going ?