2013 is THE year....

TomHarcourt

Hi all,
even though I say it every year, next year really is THE year I drastically reduce, if not eradicate my debts.
I earn a good wage (just under £50k a year) but every month we seem to be skint. It's depressing.
The past year has been a particularly tough one. Not just for me but my wife too. Which is maybe part of the reason why we haven't concentrated as much on debts. If anything, we've made the school boy error of increasing them slightly.
The past month or so, my wife has budgeted so we each have our own 'spending money', this has worked relatively well and I haven't felt so bad enjoying a Costa coffee every day . But I'm going to grab the debts by the dangly bits, and shake them till they're gone .
We haven't been on holiday for about 4 and a haf years, we've been married just over 3 and have never had a honeymoon so this is my aim when we have more money.

Now, the main reason for this thread is this; where is the best place to start? Sit down and thoroughly work out our income and outgoings? Work out the exact level of debt (at a guess it's about 10k!)? Or plan on the amount I want to pay out in total (i'm thinking £300 a month in total).
Help!!!!

Thanks in advance
Tom :cool:

Treadmill

Give up the Costa and save yourself 50 quid a month there's a start seriously though. Good luck, I earn about the same as you and have slightly higher debt, I think it's about changing attitude towards money, easy to tell yourself that because you are on 50k that you deserve stuff, that 50k soon gets swallowed up though.

purple.sarah

Hi,

Great New Year's Resolution! I've subscribed. I would advise working out the exact level of your debt, it really opened my eyes when I did this. Then you will know what you are dealing with. Then a good step would be to do an SOA (Statement of Affairs) detailing your income and outgoings. There is an SOA calculator here. That will give you a good starting point to plan your payments. I found MSE's Demotivator tool really useful for showing me how much I could save by cutting out unnecessary spends like coffee. Why don't you try taking a flask to work instead? Good luck.

YORKSHIRELASS

TomHarcourt wrote: »

Now, the main reason for this thread is this; where is the best place to start? Sit down and thoroughly work out our income and outgoings? Work out the exact level of debt (at a guess it's about 10k!)? Or plan on the amount I want to pay out in total (i'm thinking £300 a month in total).
Help!!!!

Thanks in advance
Tom :cool:

Hi and welcome. All three of these are essential. First off you cant plan your budget going forward if you dont know where you are now - and you need to know how much the debts are and APRs to plan how to tackle them.

Doing the SOA and posting on here is good because people will give you helpful advice. Trouble is I sometimes see SOAs where there are things missing and I wonder how accurate they are. I would get the last 3 months bank statements and go through them properly then do the same with the credit card statements. It takes a bit of time but will be so helpful.

Moving forward you need to record every penny you spend. I bet you will get a shock at how much you spend on things you dont need. Start a spending diary and set up some spreadsheets to record ins and outs. Doing this alone has helped me massively because seeing it in black and white makes it real and stops me spending.

If you have some cash spare after you have budgeted for the essentials you need to decide how much you will allocate to debts and how much you will allow to live on. This might take a bit of time to get right.

Good luck - if you are prepared to change your lifestyle in the short term for the long term gain of being debt free you will do it.

TomHarcourt

Wow!! Just did the demotivator on my coffees.......£ 575 a year. That's a lot. Far more than I realised. I know I have to give them up, but it'll be really, really tough because its my only real vice. I don't smoke, don't really go out and drink much anymore (mainly from being a dad, getting old and not being bothered too!!) so it'll be really tough to. However, I know it's a necessity so ill have to bite the bullet for a while
At the start of January (want to get Christmas out of the way without worrying too much (although we're pretty much done!)) I'm going to sit down and properly budget every penny we spend and earn. Hopefully the DW will start selling a fe more bit on eBay to help out. Gonna try and shop once a month too and see if that makes a difference. Very tough to do that though with 3 kids.
I seem to be making excuses, which is going to negate any hard work.
Right; no more excuses. I'm going to be strict on all of us. We'll get there.

YORKSHIRELASS

TomHarcourt wrote: »

Wow!! Just did the demotivator on my coffees.......£ 575 a year. That's a lot. Far more than I realised. I know I have to give them up, but it'll be really, really tough because its my only real vice. I don't smoke, don't really go out and drink much anymore (mainly from being a dad, getting old and not being bothered too!!) so it'll be really tough to. However, I know it's a necessity so ill have to bite the bullet for a while
At the start of January (want to get Christmas out of the way without worrying too much (although we're pretty much done!)) I'm going to sit down and properly budget every penny we spend and earn. Hopefully the DW will start selling a fe more bit on eBay to help out. Gonna try and shop once a month too and see if that makes a difference. Very tough to do that though with 3 kids.
I seem to be making excuses, which is going to negate any hard work.
Right; no more excuses. I'm going to be strict on all of us. We'll get there.

If the thought of cutting the coffees out completely seems a bit drastic you could always just have one a week in January and sort of wean yourself off them. Same with the grocery shopping, cutting down gradually is easier and you are more likely to stick to it.

Shopping less often is a good plan though. Have you heard of mealplanning? This works really well for me. I sit down once a fortnight and plan out 14 main meals, then I just buy the ingredients I need. Lots more tips on the old style board for this kind of thing.

TomHarcourt

To be honest, I'm willing to try anything and everything. I've got one CC with about £7000 on it. I think I'm going to aim to knock a minimum of £1000 off of it. Not too shabby considering the interest rate is about 15%.

TomHarcourt

Quick update; I've started looking at all my direct debits and cancelled a few that I wasn't sure what they were for. This has saved me about £50 a month. I'll also have an extra £50 a month from April. So all in all, I've saved us about £100 a month. However, that will ploughed straight onto my credit card debt which currently stands at about £7000.
I'm looking at moving it, but my credit is so bad, from missed payments etc, that I'd never be able to get the desired amount. SO have to see this through for a while still.

bargainbetty

I found the best place to cutback was on food and household goods. Most households waste food recklessly without even realising it, or rely on stop gaps of ready meals and frozne packet stuff. I did. Now, I make my own ready meals and my homemade oven chips kick McCains backside.

Why not pop over to the Old Style board and look at the tips for improving your grocery shopping? You might find that an online shop for the main stuff is more practical (you won't have to drag the kids past the sweets) and you can often get voucher codes for free delivery.

Try for a fortnight first. Do a meal plan, working out what you already have in the cupboards/fride/freezer to use up. Build the plan around the existing supplies! Then work out the staples you would need (rice, pasta, potatoes, root veg etc) and the meats and start cooking from scratch. Make extra portions and freeze them for days when you can't be bothered to cook (Surprise Sunday used to be an end of month party treat when no two people ate the same dish).

Big savings can be made on household stuff too, but the starting point is to see what you already have and use it wisely.

lauradora

Hi Tom,

It looks like you've made a good start already by admitting you have a problem :beer:

I know all the temptations. I was a single parent for years living on very little income and paying off a lot of debt so nowadays I allow myself a little treat now and again. We haven't had a holiday in all the time we've been married so were going to Florida in March. A lot will say that I shouldn't because of my debts but I think i've earned a break!!

But your in the right place. This website has been my best friend for the past 5 years or so. Its now become my therapy.Wwhen I cant go out or cope with the outside world I come here, look back at how much I've paid off and achieved and it gives me back my sens of control.

Good luck! :beer: