My debt free wannabe diary

cat4772

Hi, my name is Catherine and I need to get my (our) debts sorted out. I'm 34 (35 in July) and personally between us, my husband and I have £75000 debt (including the mortgage of £50,000.

I’m really p*ssed at this because we were going to try for a baby again, but we do not have enough spare cash to pay for childcare, and we’d certainly not manage on just his wage (:eek: ).

I’ve checked on http://www.whatsthecost.co.uk/snowball.aspx to see how quickly we can become debt free (January 2010). If I then save that repayment money, I'll be mortgage free in December 2016.

At the moment, we each have £20 a week to ‘spend as we please, no questions asked’, but out of this we’ve got things like each other’s birthday / valentine / anniversary cards & presents to buy! We’ll see how we go with that!

Our SOA

Joint:
Mortgage £30000 @ 4.99% fixed until November 2012, then variable for 2 years
Home Improvement loan £40000 @4.99% fixed until November 2016, then variable for 5 years

Husband’s:
Welcome Financial Loan £2500 @49.7% (!!!!!!:mad:!!!)
HSBC Credit Card - £3800 @23%

Mine:
[STRIKE]Halifax Credit Card - £300 @23%:[/STRIKE] Paid off June 2007:D

Total joint debt at lightbulb moment: £76,600.00

Total going out on debts each month: £1017

Monthly bills:
Buildings & Contents Insurance - £87.00 (will check to see if I’m tied in with mortgage and if not that’s getting changed to a cheaper supplier)
Council Tax - £85.00
Water Rates - £26.00
Gas Bill £52.00 (will check MSE for cheapest supplier)
Electricity Bill £31.00 (will check MSE for cheapest supplier)
Home Phone Rental £11.00*
Internet Bill £5.00*
Mobile Phone Bill(s) £37.00 (Tied in contract until November 2007, but will change to cheaper supplier)
Mortgage Term Assurance £67.00 (will check to see if I can get this any cheaper)
Travel Insurance £6.67 (have already cut this from £12 per month by checking out MSE, but at renewal in November will shop around)
Food & Household Shopping £216.50
Smokes £181.86 (Husband is stopping on 1st July, I’m stopping on 28th July – too stressed at work with organising examinations to consider stopping before)
Car Breakdown insurance - £5
Car Maintenance - £16.67 (service twice a year and MOT comes to about £200 per year)
Car Insurance £19.58 (was £50 per month, but I’ve swapped through MSE)
Car Tax £10.00
Husband’s Pension - £53.00
Sky Subscription - £26.00*
TV Licence £12.00
Cost of Christmas £41.67 (We spend about £500 at Christmas on presents etc)
Cost of Winter Holiday £58.33 We are renewing our vows and taking a (belated) honeymoon in Feb 2013 and need about £5K saved so this doesn't get us into more debt
Cost of Summer Holiday £66.67 We usually spend £200 to £250 on flights, £60 on transfers and £400 on food, drink etc. Balance is used for weekend breaks, day trips, trips to visit family etc, and includes petrol
Dentistry £11.00
Optical Bills £8.33
*was previously paying £60 a month for phone, calls and dial up internet, but changed to sky broadband subscription and now paying £42 a month (including calls to my sister in Ireland and parents in Spain each week)
Total: £1134.28

My personal expenses
Course fees - £25 (I’m saving this so I can do a course next year)
Petrol - £30 a month

Husband’s expenses:
Travel - £60.62
Saving for a bike - £21.65

Personal expenses Total: £137.27

Our income each month is £2500, and after everything above we have… £30 to cover unexpected emergencies!! Please God, don’t let the washing machine break!

Kaz2904

Ah but you've said it now and washing machines can hear you!
Is there no way you can get a low interest card - either life of balance or 0% and tart?
Presumably you are a teacher or something? I think that once you have had these holidays then you need to knock them on the head for a while.
What is your Mortgage Term Assurance £67.00?
Buildings & Contents Insurance - £87.00 at that price I would want them to come round and clean/decorate for me!
Gas/ electric too high!
Mobile Phone Bill(s) £37.00 When you do swap check around for the cheapest deal- ie a clearance phone with cheap tarrif, sometimes cheaper than PAYG!
You can cut your shopping bills without too many problems.
I think hubby needs to put his bike savings on hold until the 49% loan is cleared at the very least. Is there no way you can borrow this from elsewhere?
Your overall debt is not too severe, it is the interest rates that you are on which are crippling.
I was going to do a working out but don't know how much each debt costs you monthly. For the purposes of debt clearing I would focus on the unsecured loans not the mortgage or the home improvement loan, they can come later.
Have you applied for any other credit? I really hink you should be able to get some of this at a lower cost but if so then why were you paying so much in the first place, I wonder if it was a case of not reading small print or do you have marks on your credit history?
Hope my ramblings may help you, ttfn, K.

cat4772

Kaz, my husband is so bloody useless with money it is untrue. When we started dating, he had loans and credit cards all over the place. Shortly after we married in '98, I paid off all his debts (about £2K). We moved into our house in 2000 and it needed loads doing to it; I had some savings and we'd planned to do the work in 2001/2, but I found out he'd maxed out his credit card and took a loan out to buy me a birthday present and pay off some debts. The loan didn't even cover one debt, so he was left paying to three creditors instead of one:mad: I used my savings (AGAIN) to pay off his loan, his overdraft and part of his visa, however that left nothing for the repairs to the house.
In 2005?, the house took a hammering in some storms and the roof leaked badly, since then water drips through the lights when it rains heavily:eek: . Took out the home improvement loan and got all the work done.

At Easter, I was doing some spring cleaning and found a loan application. It has taken us since then to work out just how much we do owe. TBH he also had an overdraft, accruing fees and charges etc but I used the last of my savings to pay this off, but I can't keep paying it off for him - he doesn't learn any lessons! He is going to find out if he can make overpayments on the 49% interest loan and if so, all extra money is going on that! Snowballign will mean that we'll be able to pay things off much quicker!

You might wonder why we're still together; I gave him the option about three weeks ago of selling the house, paying all debts with the equity and getting divorced, or we'd make getting debt free our number 1 priority. Quite pleased he chose to work at it!:p

cat4772

Kaz2904 wrote: »

Ah but you've said it now and washing machines can hear you!

Don't say that, please. Actually, my parents live quite close by and I'm sure they'd be happy for me to use their washing mahine once or twice a week!

Kaz2904 wrote: »

Is there no way you can get a low interest card - either life of balance or 0% and tart? For the purposes of debt clearing I would focus on the unsecured loans not the mortgage or the home improvement loan, they can come later. Have you applied for any other credit? I really hink you should be able to get some of this at a lower cost but if so then why were you paying so much in the first place, I wonder if it was a case of not reading small print or do you have marks on your credit history?

Husband's credit history is appalling, whereas mine is just a little bit better. I'll be looking at sorting out a new credit card and transferring balances in the next couple of months (August / September), possibly to a life of balance card, rather than keep trying to move credit every six months or so. I've done a bit of a calendar thing to try to switch providers for the insurance, gas and electric, but I don't want to *hit* my credit all in one go, so I'll be spending a day doing initial sums, then tackling the biggest savers first - Buildings and contents seems like a good place to start! Mortgage assurance is life cover & critical illness cover for both of us rolled into one.

Kaz2904 wrote: »

You can cut your shopping bills without too many problems.
I think hubby needs to put his bike savings on hold until the 49% loan is cleared at the very least. Is there no way you can borrow this from elsewhere? Your overall debt is not too severe, it is the interest rates that you are on which are crippling.QUOTE]
Shopping has been cut from £400:eek: to £220, but I've a challenge to get it down to £100 a month:cool: , but this isn't going to happen overnight.
Hubby is going to check with loan company if we can make overpayments and what the settlement figure would be. Once we know that, I'll have a better idea of how to proceed.

Seaxwyn

Hi and welcome Cat

I'm sure you can get both home insurance and gas cheaper - we pay less than this. We are a family of six with a badly insulated old house and we pay about £40/month for gas.

also - the Snowball calculator does take account of introductory rates finishing. Have another look and you'll see that for each date it has a 'standard rate' (the APR it will revert to) and 'introductory rate' (the one you're paying now).

It's great that your husband chose to work together to get out of debt. There are lots of us on here struggling with partners who are either uncooperative or just rather useless on the money front, so you will get lots of support on here. My own OH has gone from being completely useless to only a bit useless so there is hope!

cat4772

Well, Rome wasn't built in a day, and we're not going to get out of debt in a day, but I have a plan...

by the end of July:
1) SORT OUT UNSECURED, HIGH INTEREST CREDIT: We're going to find out what a settlement figure for the hubby's Welcome Financial loan would be; currently interest is at 49.7%, for £2500 borrowed over 36 months. (The last time he took a loan out with the Associates, they added the interest right at the beginning, so no matter how much you overpaid, you'd still pay them the same amount:mad: ).
If we can settle it for less than £2500, then I'll see about putting it on my visa (currently at 23%, but still a lot less than 49.7%)! Once that's done, I can consolidate our visa cards (both at about 23% interest into one (lower) interest rate - hopefully for life of balance! Only caveat is that with the home improvement loan, I've borrowed 3.6 x my annual salary and his credit rating is non-existant, so to get any chance it has to be credit in my name! I'll try to consolidate by the end of July but I have the feeling I'll have to wait until Jan/Feb next year before I'll have enough 'equity' in my personal finances to do that!

2) STOP SMOKING: Hubby is stopping smoking on July 1st, I'm stopping on 23rd July (hopefully enough time for the worst of his cravings to die before I get cranky; otherwise we'll have killed each other.:eek: )

By the end of August:
sort out & change utilities for cheaper options; Gas, electric and water

By the end of September:
Sort out and change the buildings and contents insurance to a cheaper one.

By the end of October:
Cut shopping bill down to £140 a month, but this will be done by £10 a month until then, so it isn't a mountainous challenge!

By end of November:
change his mobile contract to a cheaper one

December:
Do Christmas and New Year in budget (£500) to include all gifts and postage to my family abroad, food, travel, cards (and stamps) and postage costs. Also to have bought 10 presents in the Sales ready for some of next year's birthdays and Christmas presents!

I'll obviously be setting myself new goals for 2008 (not resolutions as I have NEVER kept a single one of those in my life):o

Shineyhappy

Hi Cat,

Can you switch to roll ups until you have quit? This should save you a fair bit.

I would also think about whether you need two holidays. If those are the monthly amounts that comes to 1500 a year. If you want to get yourself into a better financial position before you have a baby then these luxuries might have to go.

As others have said I would look at your insurances and get them through Quidco to try and get cash back and make sure you follow Martins rules on buying things like that.

Have you visited the Old Style board to have a look at tips on reducing house hold bills?

cat4772

Woohoo. I've paid my visa off. I didn't *intend* to pay it off other than by snowballing my debts, but I came into a little bit of money.

I received some money for some private work I'd done 2-3 years ago (had forgotten all about it, AND as I'd already paid self-assessment tax on it in 2004, every penny is mine). So cheque arrives for £180, I put it straight into my account and decide to pay it off my visa. Hang on, I hear you cry, you owed £300 on your visa, paying £180 off it means you now owe £120! Well yes, but I'd queried several things (duplicate charges on bank statement) and they were refunded (£115), so I paid that off the visa. Balance now £5. This morning, I decided that because I'd saved £20 from the shopping bill, that I could funnel £5 of that to paying off my visa.

All that means that I'm 2 months nearer being debt free - yay!

Smashing

You go on holiday twice a year - might want to consider knocking the winter one on the head. That's a £700 saving a year, not to mention the additional spending that comes with being on holiday.

do_it_today!

Smashing wrote: »

You go on holiday twice a year - might want to consider knocking the winter one on the head. That's a £700 saving a year, not to mention the additional spending that comes with being on holiday.

I agree with freezing one of the holidays but if it were me I would knock the summer hols on the head... it's sooo depressing being in the cold that a nice hot winter hols would keep me going! and you could always go camping inthe summer

the Bike fund could be baby fund instead!

Well done for paying off the card - I think you guys are going to be on track in no time!.... please make sure hubby gets fully involved as it seems a bit of a pattern of you having to sort things out! let him take some responsibility - I have had similar issues with my DH

Good Luck :T

Penny2myName

Hi Cat, :T for getting CC paid off, now dont forget to call and cancel it and shred the card up.