New Debt Free Wannabe

blackdogonline

I've finally done it, finally biten the bullet and worked out how much debt my partner and I are in and wait for it - £34,776.58 (excluding Studentl Loans)!!!

We both earn pretty decent money, around £90,000-95,000per year so I know we have no excuse to be in this mess but it just seems to mount up. We both had credit card debit left over from university and what with buying a house, furntiture, two cars and generally having quite extravagent lifestyles, the debt has just got completely out of hand.

Now we are both determined to get rid of this asap but monthly expenses are very high and can't seem to squeeze any more money out for overpaying the debt.

This is what we are paying now - any advice would be very gratefully received:-

Moneyback Loans - £17,000 (£345pm x 60mths - APR 8.3%) - Just taken this out to repay existing loan which had 112mth left. APR's not great but neither's credit rating.

Abbey Credit Card - £2620.17 (0% until Mar 2008)

Egg Loan - £7646.93 (£405.67pm x 18mths - APR 7.66%)

Citroen Finance - £6309.48 (£259.77 x 24mths - APR 10%)

HSBC Student Overdraft - £1200 (0% until June 2008)

The Egg Loan was to replace my partners car loan from BMW which had a stupid interest rate. As I mentioned before neither of us have a great credit rate so switching providers isn't really an option.

I've just put everything into the snowball page which says we can be debt free in 28 months which would be fantastic but am a little confused. I think that mostly depends on us just making the minimum payment of the Abbey Card and overpaying the Moneyback loan.

However, not sure if they will allow monthly overpayments - the conditions just say it is possible to repay early with one month interest as penalty. As far as I understand if we don't overpay monthly the interest won't come down as quick so repayment will take longer.

So there will go, any advice please

chunky79

If you put up a SOA (statement of affairs) all money in and out the clever moneysavers wil be able to take a look where the cutback can be made.

blackdogonline

Here goes SOA:-

Money Incoming:-

My Wage (Minus Student Loan) - £1750pm
Partners Wage - £3000pm (Self-employed so this is variable)

TOTAL - £4750pm

Money Ougoing:-

Mortgage (Fixed Until May 2008) £1,185.31
Council Tax £124.00
Electric Bill (Amount in Credit - normally approx £35) £16.00
Gas Bill £44.50
Water Rates £20.81
TV License £11.37
Home/Contents Insurance £24.43
BT - Phone/Internet - 12 month contract expires Aug 2007 £45.00
Sky £37.00
Mobile Phone - (Partner) £30.00 (Moneyback deal so actually much less)
Mobile Phone - (Myself) £20.00
Petrol - (Partner) £90.00
Diesel - (Myself) £75.00
Life Insurance/Mortgage Protection (Partner) £45.50
Life Insurance/Mortgage Protection (Myself) £43.36
Legal Cover (Partner) £151.00
Income Protection (Partner) £66.00
Income Protection - Top up policy (Partner) £21.99
Professional Subscription (Partner) £37.75
Class 4 NI Contributions - (Partner) £10.50
Private Pension (Myself) £200.00
Gym Membership - Contracted until Aug 2007 £75.00
Food £200.00
Spending Money (Partner) £200.00
Spending Money (Myself) £200.00
Annual Expenses £220.00
Holiday Savings £150.00
Total £3,344.52

Debt Repayment:-
Moneyback Loan £345
Egg Loan £405.67
Citroen Finance £259.77
Abbey Card £295.00
HSBC Overdraft £100
Total £1405.44

Grand Total - Approx £4750 per month

pania

Hiya there,

Sorry to hear of your troubles and welldone for posting such a good SOA first time round, think i had to have three goes before i got it right!
You seem to have a really good concept of money, just in need of a little guidance to get shot of that debt! :rolleyes:

Reason snowball calculator says to pay minimum amount on abbey card is as you have quite a long 0% rate on it which is great. IS this at it's limit or are you able to transfer some if not all of the citroen finance balance to it?
Reason i ask this is Citroen and moneyback loans are the two debts that need dealing with first as they have such high APRs.
Yes, just pay the minimum to the abbey and the overdraft that you have to pay, from what you save, if the companies won't allow overpayments whack it into a savings accunt until you have a lump sum to make the months interest penalty worthwhile! concentrate on the highest apr loans first, get rid of them then work your way down the ladder from there.

i've added some suggestions to the SOA below. Please don't take offence at anything i've said, it's just a point of view and i hope it helps.
I'm in the same boat as you guys but with a lower income and the debt is mine all mine! i have to be serious about getting shot of my debt, my job depends on it. having a different lifestyle takes some getting used to but eventually how much you can save becomes and obsession believe me!

Make use of amazon and ebay et al to get rid of the luxuries purchased that are since unused. it's amazing how much this money adds up. join in the challenges and how much will you spend threads each day, they set your mind for the day first thing and keep you focused.

Go for it with all my support and if theres anything i can do to help by all means let me know.

Kind regards
P:D
xx





Money Ougoing:-

Mortgage (Fixed Until May 2008) £1,185.31
Council Tax £124.00
Electric Bill (Amount in Credit - normally approx £35) £16.00
Gas Bill £44.50
Water Rates £20.81
TV License £11.37
Home/Contents Insurance £24.43
BT - Phone/Internet - 12 month contract expires Aug 2007 £45.00
Sky £37.00, This appears a little high, are you able to trim this to a lesser and therefore cheaper package? most of the channels are dross, who needs more4 anyway!:o
Mobile Phone - (Partner) £30.00 (Moneyback deal so actually much less)
Mobile Phone - (Myself) £20.00
Petrol - (Partner) £90.00
Diesel - (Myself) £75.00
Life Insurance/Mortgage Protection (Partner) £45.50
Life Insurance/Mortgage Protection (Myself) £43.36
Legal Cover (Partner) £151.00
Income Protection (Partner) £66.00
Income Protection - Top up policy (Partner) £21.99

Re all your insurance policies. Would it be more cost effective to replace your single life insurance policies with one joint policy? (ensure like for like cover first of course!) With the income protection, again would it be more cost effective to replace the two policies with one for an equal amount?

Professional Subscription (Partner) £37.75
Class 4 NI Contributions - (Partner) £10.50
Private Pension (Myself) £200.00
Gym Membership - Contracted until Aug 2007 £75.00
Food £200.00
Spending Money (Partner) £200.00
Spending Money (Myself) £200.00
Annual Expenses £220.00
Holiday Savings £150.00

I really hope you don't mind me asking this but you seem to have allocated a lot of money for personal spending. This really needs to be trimmed if you are serious about getting rid of your debt. even if you can only bear to cut £50 per month each on your spending budget you'd still get rid of the debt a lot quicker! Also £150 a month on holidays, put this towards your debt, have great holidays when you can relax and not worry about the debt! also £220 on annual expenditure, is this a calculated amount for things like car servicing boiler servicing etc or an estimated amount? see if anything can be trimmed from this also.
Suggestion below

spending money (partner) £150
spending money (myself) £150
Annual expenses £100
Holiday savings £50

extra money towards debt per month =£320

Total £3,344.52

Debt Repayment:-
Moneyback Loan £345
Egg Loan £405.67
Citroen Finance £259.77
Abbey Card £295.00
HSBC Overdraft £100
Total £1405.44

Grand Total - Approx £4750 per month[/QUOTE]

pania

oops just noticed glaring typo on word account above, completely accidental and somewhat embarrassing! apologies!

blackdogonline

Thanks Pania, I guess we really don't need that much personal spending money each month so that is an area we can really cut back on. We've down graded our Sky package as much as poss but stuck with it until the contract expires in August when we will seriously think out just getting a Freeview box or similar.

Insurance policies are the best value we can get as they are own occupation and for quite a high mortgage. Annual expenses are again quite high but have worked this out taking as much into consideration as poss so we done build up more debt:-
Employment Annual Retention Fee (Partner) £420.00
Employment Annual Retention Fee (Myself) £72.00
House - Annual Maintenance Fee £280.00
Car Tax (Partner) £125.00
Car Tax (Myself) £50.00
Car Insurance (Partner) £450.00
Car Insurance (Myself) £500.00
Car Service (Partner) £100.00
Car Service (Myself) £100.00
Mother's Day/Father's Day x 2 £50.00
Family/Friends Birthdays & Misc. Presents £250.00
Christmas £350.00
TOTAL - £2697.00 (Approx - £224pm)

Our holiday is already booked so needs to be paid for - will review this in future though.

So will definitely try to say an extra £100pm for now and hopefully when we can switch some of the bills in August - Phone/Internet/Sky this will increase then.

pania

excellent, sounds asthough your making good progress. did the bit about paying minimum on the abbey etc make sense? good to see you budgeting for the pressies etc, something to ponder, would your family and friends get joy from a pressie you'd spent £50 on if they knew you were in such serious debt or would they worry about you spending money on them?
Glad my advice could be of help, grab a copy of martins book online or at the library, shows how to prioritise debts re interest rates and get them payed off. might help somewhat.
ANything else i can do other than say GO FOR IT! and i'll be right alongside you then let me know.
Best wishes
P

whatatwit

Hi, I note your partner is self employed, is the income figure quoted after an allowance has been made for tax and class 4 nic.