Smash These Debts - The MR2Jay debt busting mission

mr2jay

Welcome one and all....

This is the captains log of the SS Debt Free....

OK, so that is a bit tragic but the main message coming across here is my mission to make us debt free and learn how to stay debt free.

For many years, I have been guilty of thinking "I earn a good wage so I can afford it" when, in truth, I can't. Call this my lightbulb moment but I have realised that I am behind with the most important bill (The council tax :silenced: ) and we have maxed the credit cards and live on the limit of the overdraft.

True, maybe we aren't in as bad a position as many other I have seen on here but regardless of this, we are still in a position where things could be a whole lot better.

My motivation has come from us finally deciding that we would like to start a family. Now, the last I want is for us to be in a weak financial position when Mini MR2Jay comes along so the time for change is now. Plus, any tips and tricks we can learn along the way now will put us in a stronger position for financially supporting a family.

So, the aims of this exercise?

1. Clear off our £13,000 debt
2. Learn how to live effectively
3. Train myself to realise that if I want something, work my butt off to pay for it.

So, task 1......

I have been on here for about 3 weeks now (after a long period away when I needed advice of a mis-sold PPI policy) and I have already made headway into tackling this issue. I have joined the "Pay off as much as you can in 2012" Challenge and set myself a realistic target of clearing £5,000 off our debt by the end of the year. Our first major target in our sights is the arrears and 2013 bill for the council tax. I consider the bill for the current year also a debt so intend to hit this hard to wipe it out by the end of August. The balance at the start of this exercise was just a gnats sneeze below £2,000 but already I have started hitting this one and taken £200 off the balance, with £100 minimum coming off every week.

We also transferred our energy bills from NPower to EON with the thought that we would be saving money - probably a ill-advised move by EON which has left us with a final gas bill of over £400 and a final electricity bill north of £130. I have already cleared the electricity side but the gas is still to go.

Other than this, the remaining debts are traditional ones (2 credit cards and an overdraft) that will be tackled as and when we can afford that bit extra. Once the utility bills are gone, then the cards will be hit hard followed by the overdraft.

Task 2....

It is no myth that the largest expense in anyone's year is Christmas. We all want to provide gifts for people that they will love.

By starting now, we are able to hand make all of the gifts for the adults in the family. The main part of the hamper will come from home grown fruit and vegetables with chutneys, jams and fancy oils from chillis, tomatoes, onions, strawberries and the like that are all being grown in our garden.

The second part of the hamper is coming from my love of home-brewing. I have several wines on the go as well as ciders and ginger beers (see my other topic for recipes and tips)

For the ladies in the family, my OH has a real talent for making jewellery. By using sterling silver and semi precious stones, she is able to make jewellery that easily is as good as anything you will spend a small fortune on in the high street stores.

This leaves just the children to buy for, cutting our christmas bill considerably.

The next area to tackle is our living expenses, mainly the weekly shop. By buying one meal a week in bulk, it means I am able to stock a load of home-made ready meals in the freezer making our weekly shop a lot cheaper. We have already gone from spending £80 a week down to around £50 making a large monthly saving.

So, this is our target and this post is my journey. The day I make that final payment will be the day I celebrate but in the meantime, I am re-training myself in living well within our means so I am able to build us a nest egg to give us the life we want. At the end of the day, this exercise is clearing all of our debts will set us up for our (hopefully) long lives together.

I'll keep this post updated hopefully as a means to inspire others and show that with determination and some careful planning, showing that no matter how bleak it looks, there are ways to free up that bit more to clear the ball and chain that is debt.

please-let-me-be-lucky

Hi :hello:, Happy New Diary Day!!

You cedrtainly sound like your head is in the right place, and I wish you all the success in clearing your debts and starting a family.

PLMBL Xx

mr2jay

please-let-me-be-lucky wrote: »

Hi :hello:, Happy New Diary Day!!

You cedrtainly sound like your head is in the right place, and I wish you all the success in clearing your debts and starting a family.

PLMBL Xx

Thanks for the kind words - truth be told, I should have done this years ago but better late than never eh?

Just come back from shopping - Total (including 1.5kg of raspberries for my latest wine for the hampers) - £49

Still, skint this week with my sisters wedding just gone but no more major expenses on the horizon for quite a while - can really get my heels dug in now

mr2jay

This should be an interesting exercise....

Made a decision today to do something with those silly coins you end up with.

£1 coins are useful so those will be kept in my pockets as a "My God, I could do with an Ice Cream" fund but 50p coins and £2 coins are a bit big....

So, I have an empty biscuit tins in the garage that I am going to seal up and cut a slot in the top for 50p bits and £2 coins. This will stay sealed up until we can't fit any more in then open them up, count it up and hopefully that will pay for something major for us.....

never_too_old

Good luck
we all wish we had our lightbulb moment earlier as it would have made life so much easier .
I will follow you and hopefully be able to give a bit of support.I dont have a diary ,i have a blog you can find it by going into my user name thingy so if you want a bit more reading i would be grateful for a bit more support.:)

mr2jay

So this morning I have sat down and worked out a spreadsheet for the remainder of 2012 and I have to admit, it makes good reading

What I have done is broken down my spending on a weekly basis up until the 14th December, basing it on a minimum weekly income after tax of £600. This varies considerably as I work on a contract basis and my weekly income depends on the amount of hours I work. Having said that, I have taken my last 6 months pay slips and £600 is the least I got paid in a week. A majority were north of £650 but by basing it on the minimum, I know the worst case scenario.

So, each week, I have set aside money for bills that are due, a figure of £60 a week for food (which is more than we have been spending but better safe than sorry), included fuel, car insurance, car tax etc when it is due and left myself a figure each week for debts which I have spread about amongst the outstanding balance, concentrating on the Council Tax and the NPower bills first before hitting the Lloyds Credit Card hard.

So, with this in mind, my figure that I should have cleared by the 14th December is £4854.68 as a minimum My target for the year is £5000 though but with some good weeks, I should be able to clear this easily.

I have also worked out that I can put aside some money before Christmas so we don't end up in the situation we were last year where Christmas put us behind with the rent and was the start of our Council Tax problems.

What I haven't factored into this is the payment I am claiming for the whiplash injury I sustained last November which I have been through physiotherapy etc. This has just been sent to court but, considering the tests, treatment etc I have been through, my solicitor is 90% confident I'll be getting about £2,300. Obviously, this will also be thrown at the debts meaning that there is every opportunity to clear off one of the credit cards before Christmas as well.....

So, all is good in camp MR2Jay - I have a plan, I have the figures and I have the capability to hit these hard. This means I should be debt free by the middle of 2013

FlacosFloozie

Well done on the forward planning. You sound really organised.
Can I suggest that if you have extra left each week you put a small amount away for emergencies? This has been one of our biggest issues in the past as everything was going to the debts but then something unexpected came along and we had to borrow money again, knocking us further back.
Also I would recommend signing up to some of the survey sites as a way to earn gift vouchers. It takes a while but its not tricky and all mine are going towards this years christmas fund.
Good luck on your journey

mr2jay

Good tip - I have kind of done that in the spreadsheet.

What I'll be doing is splitting the extra I earn each week between debts and savings, so that will give us 30% of the additional money each week going to debts, 30% going to savings and 40% on buying luxuries for us (like clothes, haircuts etc)

That way, I can effectively budget to clear off a minimum before Christmas but also having a nest egg just in case.

mr2jay

Fantastic - yet another result.....

The wardrobe we have decided this morning that the weight of the clothes was just too much for the brackets holding up the bar.

OH first reaction? "We need a new wardrobe"

My reply? "Let's pop down to B&Q first and see if I can get something to refix the bar up"

Just got back from B&Q armed with 2 new pole holders. Cost of new wardrobe? £80 minimum - Cost of pole bearers? £3.50

Result

mr2jay

Hmmm - while in the interest of making big changes, I think it is high time I lost some weight and got fit as well....

I have a large selection of gym equipment here (weights, cross trainer, rowing machine as well as a funky game for the PS3 with heart monitor for general fitness)

Now, my current weight is 16st 8lbs at a height of 6'2" which puts me on the cusp of being obese (eeek!!!!) However, I can safely say that when i started with the equipment, my weight was 18st 2lbs and that was in the new year. At least I have kept off the weight I lost before

Ideally I want to get to 14st through eating well and exercising lots. Mights as well add this to this diary as it seems I am going through a complete lifestyle change....

Onwards an upwards and all that

mr2jay

So, finally had confirmation through from the Council accepting our payment plan...

Been paying for the past few weeks at £100 a week to clear it but they hadn't even acknowledged the letter. So I called them yesterday after we recieved a "notification of intent to employ bailiffs" for the full amount not including what I had already paid. Was not impressed to put it mildly...

So, called them up and asked what was happening. I didn't expect to see this. The lady on the phone was REALLY helpful and went digging for me and called me back an hour later offering full apologies. The letter they HAD received but promptly done nothing with. She checked through the payment history and found 2 payments sat on the system waiting to be credited to our account and promptly sorted that.

Although the incompetance is obvious, I can't blame the young lady on the phone who was extremely helpfuland sortd everything out for us. She has officially accepted the payment plan I offered and has now confirmed it in writing.

At least I can breathe now. Don't really want Bailiffs turning up when I am making payments already after all