Brainfreeze's DFW diary

brainfreeze

Hi everyone

Lightbulb moment today – well in truth the lights been on but nobody’s been home for a while if you know what I mean.

Below is our SOA – which on the face of it is not too bad as the incomings exceed the outgoings – just! A little history behind our problems. My DH and I both earn well, but I have been on long term sick leave with cancer since early 2005 and my income suffered drastically – hence living off credit cards and borrowing from Peter to pay Paul. Fortunately I have now gone back to work and my income is back at full pay. However, we have only scraped through by the skin of our teeth and our two amazingly supportive sons.

We managed to make repayments on everything up to Christmas 2006 (by borrowing on cards) but after that we were sinking and I dreaded every time the phone rang. We had hidden all this from our boys but they are obviously far more mature than we are as they sat us down and told us it was obvious something was wrong and they wanted to help. They gave us £2,500 to catch up with everything and start on a clear footing each month. They insist they don’t want this money back and it just their way of repaying the support we gave them whilst they were at uni.

Anyway – we are now on an even keel – payments for everything up to date and on time, two salaries coming in and we can manage. But we want to more than manage – we want to be debt free. I think when my DH first started using the cards, my prognosis wasn’t good and perhaps it was a case of – well the life insurance will sort that out. Believe me we are over the moon the life insurance wasn’t needed, but now we have to face up to reality and sort this mess out.

We recently tried swapping to interest free cards but were rejected – presumably because of the recent missed payments and also because of the high level of total credit we have.

We are just at the end of a three year tie in for our mortgage, but don’t think we will be able to remortgage very easily because of my health problems and lack of income over the past two years – I don’t have three months good payslips or a P60 which has anything more than sick pay on it.

Other things to note:

• I cycle to work so can’t reduce my transport costs
• DH works 40 miles away so petrol costs would be difficult to reduce
• TV/PHONE/INTERNET – we have Virgin VIP package of 10mb broadband, all the movie channels, and two phone lines, but my son pays for this as we were going to cancel or reduce it – he wants so he will pay.
• AA breakdown – again my son pays for this as he wants to know that we are covered.
• There is an allowance in this lot for emergencies, car maintenance, car tax etc and I have just made a best guess for this, but may need to adjust it. I only started putting this away this month.
• Electric costs are extortionate. I was paying £88pm direct debit until two months ago when British Gas wrote and told me they had not been collecting enough and the revised monthly collection needed to be £150pm – to cover arrears which have built up because we weren’t paying enough apparently – very irritating as we were paying what they asked for.

Anyway – enough rambling (embarrassment does that to me!). Here is our SOA
Monthly Incomings:
My Salary £2,036.00
Partners Salary £1,900.00
Rent from son £340.00
extra from son for AA & internet/TV/phones package £150.00
Total £4,426.00


Monthly Outgoings:
Mortgage £932.00
Council Tax £125.00
Gas £50.00
Electric £150.00
TV License £11.41
Mobile phones (son pays for 2 @ £15ea) £30.00
Phone/Internet/TV (son pays for this) £95.00
Food/general shopping £380.00
Car Insurance £59.64
Petrol £100.00
Life Insurance £40.26
Water Rates £30.00
AA breakdown cover (son pays for this) £28.49
Buildings & Contents insurance £28.59
British gas home service agreement £10.50
Car tax, maintenance £40.00

Loans & Finance
Direct Line (borrowed £8k, bal £761.84) £190.46pm 6.5% ends June 07
Nor Rock (borrowed £25k Apr 04, bal approx £19k) £395.86pm 8.6% ends Apr 2011
Black Horse £106.33 0% finishes Dec [STRIKE]2007[/STRIKE]2008 ([STRIKE]9[/STRIKE] 21 more payments)

Credit Cards
MBNA (Balance £7,600) Limit £7,700 £190.00pm 24.9% APR
Lloyds TSB (Balance £5,900) Limit £6,000 £165.00pm 26.5% APR
Halifax (Balance £9,850) Limit £10,200 £255.00pm 20.65% APR
Halifax (Balance £3,875) Limit £4,000 £98.00pm 17.95% APR
Lloyds TSB (Balance £6,500) Limit £7,000 £175.00pm 14.8% APR
Barclaycard (Balance £6,800) Limit £7,500 £163.00pm 20.8% APR
Home shopping catalogue (balance £450) £35.00

Total expenditure £3,884.54

Therefore our monthly situation from this point on is as follows
Income £4,426.00
Outgoings £3,884.54

Available funds per month £541.46

HFC £1340 buy now pay later due to start in June 07 @ 29.9% - 0% if we can pay it off before 1 June!

Other points - mortgage of £150k with £139k outstanding. House is worth approx £250k. Bank charges....never paid any (DH cancelled DDs before they were due if we didn't have the money to cover them) so can't reclaim them.

I work in a financial role and so do not want to do anything with regard to making financial agreements that may affect my career - but hopefully we are not in a situation where that would be necessary.

So - I make it we have [STRIKE]£63,033[/STRIKE] £64,309 of unsecured debt:eek: :eek:

Well that's me and mine as they say:o Any advice, guidance, support will be gratefully received....but actually being brave enough to write it all in a list is a huge thing for me. Looking at it...it is awful - but at least we have money over each month to throw at it.

Scottishmummy

Didn't want to read and run but others will be along to give further advice. Main thing I would say is get the money together to pay HFC before that extortianate (sp) interest rate kicks in. Two months of what you have left over almost covers it and with a bit of tweeking here and there you should be able to come up with the rest. Have a look at the 'old style' boards for way to cut down in the house.

Congratulations on getting through your illness and welcome to these boards.

**purpleprincess**

Hello and welcome to MSE.

Firstly well done on posting and putting it in black and white so to speak, that's often the hardest bit, that first huge step. As you say, you have some money over each month to throw at it, this is good.

One thing I can suggest, looking at your outgoings, is trying to cut down on your food shopping spends. Take a look at the Old Style board, terribly friendly people and a mine of information. Tonnes of ways to cut your spending down therefore increasing the amount of money you can pay off your debts.

It won't take forever, realistically if you look at it in terms of trying to pay off £500-£600 a month it'll only take 8 years.

Good luck and I hope you get to where you want to be and stick around on MSE

elsien

I can't offer any helpful advice, but I just wanted to say good luck, and your sons sound lovely.

Mindy_2

I agree with the others to cut down on your food bills, I have managed to almost halve mine for 2 adults, 1 child and 2 dogs from over £100 pw to £60pw (thats what I spent this week).

Have a look round the house and see if you have anything that you can sell on Ebay or books to sell on Amazon, or bits and pieces for a car boot sale, now the nice weather is here there will be loads of car boot sales around. Hopefully you will make the difference that you need for that HFC loan.

Go onto https://www.whatsthecost.co.uk and do a snowball (enter all the cards and interest rates and how much a month you can afford to pay off them all).

I know what you mean about the unsecured debt, we are in much the same boat (see my sig) but working hard on getting it down.

cookie9

Well done for posting. The HFC interest is high so ideally you want to pay this by June before it sets it.

Electricity is high - look at uswitch to see f you could get a better deal. (Check pigback and quidco to see of you could get points/cash back). Try switching items off rather than leave them on standby. Turn your heating down. Use engery saving light bulbs.

Food - look at what is in your freezer and store cupboard. Menu plan and start using these items up. If necessary change supermarkets - I find my shopping bill is always less if I use Tesco rather than Waitrose. Don't be afraid to look at the reduced section as you can get some good deals there. By having a month using freezer food and store cupboard up you could probably half your bill albeit if only for one month but once you get used to menu planning it should still be substanially lower.

If you have books you no longer read or old dvds or cds look at selling them on Amazon. Ask your sons if they have any of these items they don't use any more.

Sign up to quidco and pigsback ( refer your family members to gain extra points).

You can get rid of your debts but it will take time. Once HFC paid make a start at clearing the next highest rate of interest credit card.

mo1_2

hi,i had a simalar thing off work with cancer,and used cards to pay for everthing,but you live and learn,lol,i hope your better now,the only advice i can give you is focus on getting rid of one card at a time,it seemed to give me a lot of satisfaction,ive got rid of 2 now only 5 more to go ,oh and your food bill looks very high,good luck

auntie_brenda

Hi brainfreeze!

Ok, you need a short term solution to avoid that horrendous 29.9 apr :eek: . You will have at least 1 month of your 'spare money', hopefully almost 2 months. Could you ask your son to pay his board early just this once - if you explain why I'm sure he'd oblige. That would stop that debt in its' tracks. Maybe he could pay 1/2 rent from June till you've 'paid him back' - as you'll be £190 better off it shouldn't make a difference to your overall situation.

Live off your freezer and cupboard as far as possible for a month as well, this will help find some extra for the payment. If you're stuck for inspiration list all the contents on Money Saving Old Style and they'll plan for you.

The good news is then in Dec you'll be another £100 better off - so more to throw at the debts. So that's an extra £300ish a month :j .

I agree with others - chuck your debts into www.whatsthecost.co.uk - this will organise your payments and give you a debt free date - which we can then help you bring down :T . In the meantime, could you do a balance transfter from one Lloyds TSB card to another for £500, saving yourself over 10% interest, so worth paying a fee of 2%. If you can't do Lloyds to Lloyds then do with MBNA.

Re the car breakdown - there is a link on the home page to where to get the cheapest cover - I know your son pays it but lets save him some money.

Welcome, good luck and congrats on being healthy!

benbenandme

:hello: Hi and welcome !!
I am on my way out at the moment so will pop back later, but wanted to say never forget ... whatever your amount of debt, you have your health back and you have the love of a wonderful family - you are truly blessed !

Swishter

Nice to meet you! :wave:

Your electricity really is excessive! Especially if your water and heating are provided by gas. Are you sure that its correct? I've had a faulty meter in the past, it took a while to sort out as the Electricity Company kept insisting that it was impossible for the metres to be faulty, but I eventually got a new metre and compensation for the overcharging. Check your past bills and also ask for a breakdown of costs/payments etc from your supplier, if useage has suddenly and unaccountably increased at some point it may indicate a fault. In my case switching off all the electricity in the house but my metre still registering a useage of over 20 units in an hour followed by a complaint to EnergyWatch finally got Southern Electric to sort the problem out.

Other things you can do is try and reduce your useage, don't leave immersion heaters,don't use electric showers for long showers, TV's on standby and the like. Better for the environment and your pocket.

Good luck.

brainfreeze

Hi all

Many thanks for the advice - all taken in and will start to work on it all straight away.

Regarding excessive electric - I agree and British Gas are installing a second meter to run alongside mine to check that mine is calibrated correctly, as I'm arguing it must be wrong. The good news is that if it is wrong they will go back over the bills and recalculate them. The bad news is that if it is okay and we really are using huge amounts of electricity then they will charge me £60 for having to have installed a second meter to check it all out. I figure it is worth the risk. Anyway - we can't switch until we've sorted it out. The heating and water is all run off gas as we don't have an immersion or anything like that.

Food bills - I am going to aim for £300pm - I think that's achievable and if I can do better then I will be really chuffed.

Regarding the HFC payment which is due by 1st June - we are going to throw everything at that in the first instance and we have the cushion of an overdraft if we need it. An overdraft is better than that horrendous interest rate.

We already use Quidco and Pigsback whenever possible.

I'm going to go through the house a room a week and give it a thorough clear out and ebay everything we don't use or need. We need a life laundry anyway!

I'm just off to visit the whatthecost website and plug in our numbers and see what it produces.

Thank you all so much for the advice. It really does help to 'talk' it through. I'll keep you all posted with how we get on.