Mental Health Nurse in need of a cure for spending!!

rachyroo1985

Hi there,

It's taken a while of lurking and reading on this site to finally pluck up the courage to write this.

Let me start with our situation:

I met my boyfriend nearly 8 years ago and we both had a small amount of debt each i.e about £1000 each from store cards, phone bills etc. We were both at uni and started renting a house pretty quickly.

After a couple of years we decided to take out a loan for a car (not a new one) and to consolidate debts and of course we had to add that extra bit "for treats"! We ended up with an £7000 loan in 2009 which we took on for 8 years to keep payments low.

Last year we on a whim decided to buy a house which came up really quickly. We got a loan for the deposit which was £9000 over 5 years.

We had a few "issues" at the end of last year and nearly split up. So to get myself out of a pit of self despair i had the bright idea of getting a CC from Tesco which is 0% for 16months. I decided we "needed" a holiday and paid to go to America to visit family. Altogether we managed to max out the £3800 balance!!

I had the famous 0% student overdraft of £2000 which I just left. (I graduated 3 years ago)! However, this has now been paid off and closed.

We both had OD's on our current accounts of £600 and £500 and also an OD of £950 on our joint account.

I have now paid off the £500 OD and have half towards the £600 OD.

I also have a next account which only has about £100 on it.

We have now come to the conclusion that we are in a good financial position to sort things out We earn £3500 per month take home between us so can in theory work through our debts quite quickly which puts us in a lucky situation.

We want to start a family an get a bigger house so would like to get rid ASAP.

Any tips or advice would be appreciated as I feel "in the zone" and really motivated.

Thanks in advance for your help and support on this long journey!!

rachyroo1985

One thing I forgot (in the words of Columbo).

My boyfriend had the use of a company van with personal mileage allowance so we didn't have to pay for fuel. We have another car which we hardly ever use as I don't drive.

He has just got a new job so he has to give the van back.

The car we have is now officially dead and we have no savings to buy another one. We really need a decent reliable car so have just entered into a 0% finance no deposit deal for £9595 for 5 years. The thought of this is really disappointing but at the same time i am please we aren't paying interest on this and we can overpay if we want to. I also feel more confident now we have a more reliable, newish car which is only 2yrs old.

Igamogam

Hi - just popping in to say hello and good luck. You will find some very helpful people on these boards - ignore the very critical ones! Most people will say post a SOA - state of affairs found here
http://www.stoozing.com/msoc/soacalc.php Whether you make this public or private is up to you........like I said some people can be very critical but mostly people will be able to point you in the right direction and help you see things you haven't! Also snowball calculator useful http://www.whatsthecost.com/snowball.aspx.

Good luck!

rachyroo1985

Hope I have done this correctly

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 1600
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3600

Monthly Expense Details
Mortgage................................ 473.7
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 106
Electricity............................. 31.5
Gas..................................... 31.5
Oil..................................... 0
Water rates............................. 31.57
Telephone (land line)................... 32.5
Mobile phone............................ 37
TV Licence.............................. 12.54
Satellite/Cable TV...................... 62.5
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 0
Petrol/diesel........................... 150
Road tax................................ 20
Car Insurance........................... 75
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 21.63
Buildings insurance..................... 39.06
Contents insurance...................... 0
Life assurance ......................... 67.5
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 0
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1732


Assets
Cash.................................... 0
House value (Gross)..................... 95000
Shares and bonds........................ 0
Car(s).................................. 9995
Other assets............................ 0
Total Assets............................ 104995


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 77000....(473.7)....4.99
Total secured & HP debts...... 77000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
tesco cc.......................3698.54...37........0
next...........................106.7.....10........24.99
loan 1.........................5191.09...141.......6.7
car finance....................9595......150.......0
loan 2.........................7140.14...205.1.....6.7
Total unsecured debts..........25731.47..543.1.....-


Monthly Budget Summary
Total monthly income.................... 3,600
Expenses (including HP & secured debts). 1,732
Available for debt repayments........... 1,868
Monthly UNsecured debt repayments....... 543.1
Amount left after debt repayments....... 1,324.9

Personal Balance Sheet Summary
Total assets (things you own)........... 104,995
Total HP & Secured debt................. -77,000
Total Unsecured debt.................... -25,731.47
Net Assets.............................. 2,263.53

Igamogam

You must have been beavering away whilst I was posting

rachyroo1985

Hi Igamogam,

Thanks for your reply. Feels a little less daunting to know someone is reading and have not passed out from the shock of my stupidity with cash!!
Think its gonna be a long slog but I'm ready for it.

Igamogam

Try that snowball thing - it will bring it all into sharp focus..................

Just a few things form the SOA - car maintenance - do you intend to have it serviced? Grocery bill - you will have people coming along saying they can feed a family of 6 on half of that - and they can believe you me!£300 seems high. No haircuts no clothes? What would you spend in a year on these then divide by 12 ( of course you may cut your own hair and have no need for new clothes this year!) No dental or medical costs through the year ? Can you find cheaper pet insurance - in fact do they need it? I have pets too but would rather insure the contents of my home:eek: And £200 a month on entertaining...........

Sorry see what I mean about someone coming along and pointing things out....:)

Your Next card has the highest APR - pay that off, in full if you can as its a relatively small amount - then either cut it up or drastically reduce the limit on it to something you can pay in full

rachyroo1985

My sister cuts and colours my hair for free so that is zero cost.
I bought lots and lots of new clothes last year so I don't really need anything new for a while.

I really want to cut down on our entertainment budget s I know along with groceries that is an area we could save lots. We have kinda both gone from being absolutely skint at uni to thinking "I'm gonna spend everything we have because we work so why shouldn't we?!". We need to find a happy medium I think. I am also, like many others before me, a Tesco junkie!! This need serious attention.

The car was serviced before we bought it this week and is still under dealership warranty until October next year as it is under 3 years old, so no service or MOT costs until then.

Thanks again for any help and advice.

P.S. is my signature showing up as it was a bit technical for me to create it as I am a bit of a technophobe. x

Igamogam

Well that all makes sense:) Know exactly what you mean about being skint then having decent salaries and go spendy spendy spendy:) If you cant wean yourself off T*sco then try online delivery - I always spend less when its delivered to the door - if you havent done it before first time can be onerous but after that its easy and there often good deals for first time users. Due you put anything away for emergency fund - if you dont use it then it could always turn into the 'baby fund ' when the time comes.

Food and entertainment : set yourself a budget and stick to it - if it comes in under budget put the extra on one of your debts. If you go over budget then dont beat yourself up over it - it happens:) Spending diaries are always good - write everything down ( EVERYTHING) that you have spent - it will be a revelation
Signature looks fine although orange is not a great colour on screen - on here it always looks a bit insipid - maybe its my monitor! But it reads OK

Next thing to do is snowball and see how long those debts are going to take to pay off whilst you are just paying the minimum

rachyroo1985

Have tried the snowballing calculator and am happy to find that I am going about the debts in the right order ish!! Have been making over payments every month even if they have been small on the following:

Tesco CC
Next

I have paid off 2 OD's and will pay off Next and partner's OD next month as well as reducing the joint OD by £350. This means that if I stay on track I will be OD and Next account free by Xmas.

The 0% on the CC runs out in January so would you suggest working to pay that off before the biggest loan (I can't make over payments on the smaller loan due to taking it out in 2009).

If I have a smaller CC will it give me a better chance of a balance transfer in January?
Or do recommend banging any spare cash on the loan? A bit confused.:eek::eek:

On the other hand today is my 2nd NSD in a row so I am quite proud of myself and i have £68 to last me until OH gets paid next Wednesday so we should be OK.:j:j:j:j:j

rachyroo1985

Igamogam, we don't put Into an emergency fund at the moment as we want to concentrate on getting the debts clear. however, as soon as we can we definitely will start saving as I would only get stat maternity pay. This means I would be losing about £1000 to £1500 after the first 12 weeks. We really would need to save at least £1000 for every month I want to be off after the first 12 weeks. Hope that makes sense!?:o