Finally facing reality and wanting to be debt free!

NotoriousREV

Hi Everyone, I've been considering my financial position since moving into a nice new, bigger house with not-so-nice new, bigger mortgage.

We orginally intended to use some equity from our previous house to clear our debt, but we couldn't get a big enough mortgage to cover everything. When we worked it out, we *thought* we'd be OK and we kind of are in that we have some money left over each month, but it's not a lot!

What I'm hoping to get from here is some pointers in the right direction. I understand the right way to do it, but not 100% sure of the best way to get started!

OK, I guess the first thing you need is my SOA:

Income:

Me: £2397
MrsREV: £660
Child Benefit: £69.85
Tax Credits: £42.64

Total Income: £3170

Outgoings:

Personal Loan #1: £61.50
Personal Loan #2: £158.70
Personal Loan #3: £201.19
Personal Loan #4: £40.38
Next Directory (Minimum Payment): £54.21
Catalogue (Minimum Payment): £22.00
Credit Card #1 (Minimum Payment): £35.00
Credit Card #2 (Minimum Payment): £9.00
Credit Card #3 (Minimum Payment): £5.67
Mortgage: £1120.94
Home & Contents Insurance: £24.90
Child Savings Account: £10
Car Insurance #1: £39.33
Life Insurance: £17.00
Water Rates: £42.24
Nursery Fees: £276.25
TV Licence: £11
Gas & Electric: £110
Food etc. shopping: £260.00
Fuel: £300
Sky: £50.95
Council Tax: £150.70
Mobile Phone: £26.31
Phone: £32.95
Broadband: £11.99

Total Outgoings: £3066.54

Difference: £103.46

I'm still gathering all the info about APRs on our debts, but here's the amounts outstanding:

Personal Loan #1: £1702.51
Personal Loan #2: £5420
Personal Loan #3: £7400
Personal Loan #4: £1293
Next Directory: £574.43
Catologue: £88
Credit Card #1: £3093.73
Credit Card #2: £360.92
Credit Card #3: £189.22

Total: £20121.81

I also have savings of £4000.

Obviously, I need to use my savings to pay off some of the debt. I know that it makes financial sense to pay off thos things that are costing the most in interest, which would be the credit cards, Next and Catalogue which comes to £4306.30 so I'll be doing that in the next few days.

I suppose the next question is: what happens next?

liz105

NotoriousREV wrote: »

SOA:

Income:

Me: £2397
MrsREV: £660
Child Benefit: £69.85
Tax Credits: £42.64

Total Income: £3170

Outgoings:

Personal Loan #1: £61.50
Personal Loan #2: £158.70
Personal Loan #3: £201.19
Personal Loan #4: £40.38
Next Directory (Minimum Payment): £54.21
Catalogue (Minimum Payment): £22.00
Credit Card #1 (Minimum Payment): £35.00
Credit Card #2 (Minimum Payment): £9.00
Credit Card #3 (Minimum Payment): £5.67
Mortgage: £1120.94
Home & Contents Insurance: £24.90
Child Savings Account: £10 - how old are your kids?
Car Insurance #1: £39.33
Life Insurance: £17.00
Water Rates: £42.24
Nursery Fees: £276.25
TV Licence: £32.87 this is very high, how come? ours is £11 p/m
Gas & Electric: £110
Food etc. shopping: £260.00 - how many ppl is this for? there are families on here eating for £100 p/m, get tips from the old style board
Fuel: £300 - I guess you travel quite a way to work?
Sky: £50.95 - this needs to go. Its £611 pa
Council Tax: £150.70
Mobile Phone: £26.31
Phone: £32.95 any deals to search out here?
Broadband: £11.99

Total Outgoings: £3088.41

Difference: £81.59

I'm still gathering all the info about APRs on our debts, but here's the amounts outstanding:

Personal Loan #1: £1702.51
Personal Loan #2: £5420
Personal Loan #3: £7400
Personal Loan #4: £1293
Next Directory: £574.43
Catologue: £88
Credit Card #1: £3093.73
Credit Card #2: £360.92
Credit Card #3: £189.22

Total: £20121.81

I also have savings of £4000.

Obviously, I need to use my savings to pay off some of the debt. (yep) maybe keep back a bit £1k or so for emergencies? No savings terrifies me. QUOTE]

Use the snowball calculator to see what order you should be paying your debts off in.

Cheerio

GirlRacer_2

I agree with Liz105 here. The sky definitely needs to go. Telephone and broadband - I'm with Talk 3 it costs £19.99 per month and I get free unlimited broadband and free calls.

p.s How rude of me I should have started the post with Welcome to debt free wannabee and congratulations for seeking help.

NotoriousREV

Hi Liz,

Some good questions!

How old are your kids?

Dylan is 2 and a bit. We started this account with the cheque from Gordon Brown and need to pay in £10 a month for some reason or other.

TV Licence: £32.87 this is very high, how come? ours is £11 p/m.

Good point. Asked the wife (this goes out of her account). Apparently this is quarterly and I've been paying her that amount every month for as long as I can remember. Divorce proceedings have been started, although I may forgive her as she's currently making a cooked breakfast.

Food etc. shopping: £260.00 - how many ppl is this for? there are families on here eating for £100 p/m, get tips from the old style board.

This also covers clothing and houshold stuff. There's 3 of us plus a cat. We might eat the cat if we get desperate, he's fat enough for at least 2 meals (a roast and maybe a curry?)

Fuel: £300 - I guess you travel quite a way to work?

This is for both mine and the wife's cars. We both travel the same distance to work, just in completely opposite directions.

Sky: £50.95 - this needs to go. Its £611 pa.

Aaghhh, don't make me! Actualy, I'm thinking of dropping the multi-room as we don't use it at the moment. I've done a "channel diary" and although we don't watch many channels, we need the full package to watch all of our regular programmes. Sky know this and I hate them for it. I'll re-do this exercise and be really hard on myself and see if I can save anything.

Phone: £32.95 any deals to search out here?

Currently half-way through a 12 month contract. Will be searching out deals for phone and broadband once the 12 months is up.

oops_a_daisy

Hi there and welcome to DFW. I have made a few suggestions on your SOA but there may be a few things missing like chirstmas & birthdays, holidays, haircuts etc - also have a look at the buget planner on this site to fine tune it a bit to get a full picture of your outgoings per month. Try to get your APR's as soon as possible and then edit your original post with the details. There are many alternatives - can you phone your crecit card providers and try to get the interest rates lowered ? or move onto a 0% credit card or even a lower life of balance credit card ? Have you had any bank charges in the last 6 years ? if so start claiming them back now, go to consumeractiongroup.co.uk for details or use the links from this site.

NotoriousREV wrote: »

Hi Everyone, I've been considering my financial position since moving into a nice new, bigger house with not-so-nice new, bigger mortgage.

We orginally intended to use some equity from our previous house to clear our debt, but we couldn't get a big enough mortgage to cover everything. When we worked it out, we *thought* we'd be OK and we kind of are in that we have some money left over each month, but it's not a lot!

What I'm hoping to get from here is some pointers in the right direction. I understand the right way to do it, but not 100% sure of the best way to get started!

OK, I guess the first thing you need is my SOA:

Income:

Me: £2397
MrsREV: £660
Child Benefit: £69.85 check entitledto.com to see if you are getting everything that you are due
Tax Credits: £42.64 as above

Total Income: £3170

Outgoings:

Personal Loan #1: £61.50
Personal Loan #2: £158.70
Personal Loan #3: £201.19
Personal Loan #4: £40.38
Next Directory (Minimum Payment): £54.21
Catalogue (Minimum Payment): £22.00
Credit Card #1 (Minimum Payment): £35.00
Credit Card #2 (Minimum Payment): £9.00
Credit Card #3 (Minimum Payment): £5.67
Mortgage: £1120.94 is this interest only ?
Home & Contents Insurance: £24.90 this seems quite good but always try to shop around for the cheapest and try to go through Quidco for cashback when renewing
Child Savings Account: £10 may need to throw this at your debts for now then set up again when you are debt free - it would be a whole lot better for your child to have debt free parents
Car Insurance #1: £39.33 see comments for home & contents insurance
Life Insurance: £17.00 as above
Water Rates: £42.24 look into a water meter - a saving can be made here
Nursery Fees: £276.25
TV Licence: £32.87 is this per month ? seems high
Gas & Electric: £110 these seem high - look into switching via links from this site to earn cashback for switching - does it include arrears ?
Food etc. shopping: £260.00 this is always an area that can be cut back by meal planning and budgetting - have a look at money saving old style for tips and try to cut in the first month by £60
Fuel: £300 this is very high - shop around for the cheapest and limit usage of car in the nice weather walk or bike instead
Sky: £50.95 ditch it now - thats approx £600 per year you can throw at your debts
Council Tax: £150.70 check to see if you are in the correct council tax banding - info available on this site and it is easier if you have only moved into your property in the last 6 months - not sure how you stand with previous properties ?
Mobile Phone: £26.31 move over to pay as you go and limit to £10 per month
Phone: £32.95 look into a deal with the likes of Virgin for £30 per month I get phone, digital TV and broadband
Broadband: £11.99 as above saving can be made here

Total Outgoings: £3088.41

Difference: £81.59

I'm still gathering all the info about APRs on our debts, but here's the amounts outstanding:

Personal Loan #1: £1702.51
Personal Loan #2: £5420
Personal Loan #3: £7400
Personal Loan #4: £1293
Next Directory: £574.43
Catologue: £88
Credit Card #1: £3093.73
Credit Card #2: £360.92
Credit Card #3: £189.22

Total: £20121.81

I also have savings of £4000.

Obviously, I need to use my savings to pay off some of the debt. I know that it makes financial sense to pay off thos things that are costing the most in interest, which would be the credit cards, Next and Catalogue which comes to £4306.30 so I'll be doing that in the next few days. wait to see what you can do with the interest rates on your credit cards - it may be better to move debt around a bit then pay off the highest APR. Well done on having savings as you will be able to make a huge dent in your debts straight away. There is a site to help with 'snowballing' which is paying off your highest debts first the link is whatsthecost.com/snowball.

I suppose the next question is: what happens next?

Im sure others will be along soon with more advice. Well done on posting and you really have come to the right place for help.

all the best and good luck - OOPS

oops_a_daisy

NotoriousREV wrote: »

Good point. Asked the wife (this goes out of her account). Apparently this is quarterly and I've been paying her that amount every month for as long as I can remember. Divorce proceedings have been started, although I may forgive her as she's currently making a cooked breakfast.

LOL a wise woman :rotfl:

GirlRacer_2

When you phone sky tell them your going to cancel altogether, to try to keep you they more often than not offer either discount or free packages. Worth a go

oops_a_daisy

the other thing to start up immediately is a spending diary for you and your DW ( Darling Wife ) there are a few ways of doing it but basically you both need to write down everything that you spend every time you spend - this shows where your money is going. For instance when you take a twenty out of the cash machine and a few hours later you have no money left because it has been frittered away on sandwiches, coffee, newspapers & magazines and the odd choccie bar here and there it soon all goes on 'nothing'

now I want a cooked breakfast

findingmyownway

mmmmm cooked breakfast

findingmyownway

Maybe i should say something more constructive than drooling over your breakfast!


I agree with what the other posters have said about renewing insurances etc through quidco. Im not sure how this works if you are mid-contract with them, maybe have to wait til renewal

Head over to the Old Style board for tips on reducing shopping bills.

Definatly start keeping a spending diary - and get your wife to do one too

Another thing - what did the debt get spent on? Do you have anything you can sell to pay chunks of debt off?

You have made a good start by posting on here

findingmyownway

I've just noticed you have 'car insurance #1' on your SOA but no #2?