I've got myself into a MASSIVE debt in 9 months...

weebit

rogue999 wrote: »

£1400 on food, travel and general spending is huge. I know travel can be expensive if you are in London (sorry didn't read where you were), but food is an easy one to cut down on - £200 for 2 should be easily enough. So what is the £100's in general spending? I would be breaking that down and doing a full SOA.

I agree having an emergency fund can be very useful though. I only have £500 but am sticking with that and throwing everything else at my balance as am very keen to get rid if it!

To clarify, the £1400 a month goes on food, travel and general spending, plus extra payments to the credit cards. Please ensure you read the full sentence before criticising me. Plus, I don't need to do an SOA because I know what I spend my money on and don't need to share that information with the public.

rogue999

weebit wrote: »

To clarify, the £1400 a month goes on food, travel and general spending, plus extra payments to the credit cards. Please ensure you read the full sentence before criticising me. Plus, I don't need to do an SOA because I know what I spend my money on and don't need to share that information with the public.

That's fine - I did read it all, between £200-£400 extra a month. Still £1000-£1200 is a lot but I wasn't criticising at all, just suggesting a breakdown might identify potential savings.

You are the one asking for help on a public forum. I was under the impression you'd like some suggestions?

dirtycredit

Whoa just read this whole thread. Scary stuff! The £11K party made my eyes water.

I'm not here looking for advice,

£50K? I'd take what I could get!

dirtycredit

How old are you if you don't mind me asking?

snowqueen555

My wife has also taken some extra shifts at work, the equivalent of 1 and a half extra days a month at time-and-a-half, giving us around £250 more a month after tax.

Thats a lot of money for 1.5 days worth of work. Is she able to do more
of that?

I think the biggest saving you can make is moving into something cheaper, I'd rather do that save knock of a few years of debt than to prolong the agony, because you did say you have been in debt since 2003 or something like that.

Any chance of a new SOA as I assume your circumstances have changed, and you did mention you are both earning more. Thank you for updating your thread through all this time.

weebit

Hi,

So a lot of people are asking to see an SOA, so I decided to make one. What it shows is basically what I've mentioned previously, that I have a small surplus at the end of each month. I've included a few explanatory notes within the SOA.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1982
Partners monthly income after tax....... 1843 (basic wage before overtime)
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3825

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1300
Management charge (leasehold property).. 0
Council tax............................. 116
Electricity............................. 71 (gas and electric combined)
Gas..................................... 0
Oil..................................... 0
Water rates............................. 35.48
Telephone (land line)................... 16.99
Mobile phone............................ 68 (£15 for me, £53 for wife - 9 months of contract left)
TV Licence.............................. 12.12
Satellite/Cable TV...................... 10.75
Internet Services....................... 4.99 (for 12 months)
Groceries etc. ......................... 250
Clothing................................ 40
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 225 (tube/bus)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 83.33
Buildings insurance..................... 0
Contents insurance...................... 9.34
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 15
Entertainment........................... 250
Holiday................................. 0
Emergency fund.......................... 100
Bank Account Fee........................ 10
Total monthly expenses.................. 2648


Assets
Cash.................................... 1100
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 1100

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
ALL DEBT.......................49337.....864.......
Total unsecured debts..........49337.....864.......-


Monthly Budget Summary
Total monthly income.................... 3,825
Expenses (including HP & secured debts). 2,648
Available for debt repayments........... 1,177
Monthly UNsecured debt repayments....... 864
Amount left after debt repayments....... 313

Personal Balance Sheet Summary
Total assets (things you own)........... 1,100
Total HP & Secured debt................. -0
Total Unsecured debt.................... -49,337
Net Assets.............................. -48,237

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

I've lumped all my debt into one because I owe money to about 15 different accounts and didn't fancy typing them all out! The monthly payment is the estimated minimum payment for next month.

For income, I've included my wife's monthly wage before overtime. For budgeting I assume she'll not have overtime any at all, but in reality she usually has between £50 and £400 of OT each month. The extra is a bonus.

I know our grocery bill is high and I've tried many times to cut back, but it never works. The little 'top-up' shops increase it a lot. We usually do one big monthly shop online, mostly for heavy, bulky and non-perishable items like tins, pasta, washing powder etc, then top-up the fresh food like milk and vegetables throughout the month.

Entertainment - again, I know this is probably quite high and we can look at cutting this back. It's also something that's hard for me to put a price on because it will include things like drinks at the pub which is usually in cash and you never get receipts for!

I've just switched my phoneline to Virgin and am considering taking the line rental saver for £164 a year rather than paying the £16.99/month

The £10 bank fee is for the Nationwide FlexPlus account which gives phone insurance and travel insurance for me and my wife, so it's a really good deal and would cost more to buy separately.

So there you have it. Large debt, big bills, income just about covering it all and big ambitions to pay it off but in reality I'm struggling to do so.

thegreenone

My heart sinks every time I read an SOA for peeps with big debts and it includes pets and vets. I know people love pets but.........


I'm guessing you live in London so everything else is spot on (apart from our wife's phone, which I'm sure you'll change as soon as you are able). You just have to make sure you stick to your food and entertainment money. Can you take it out in cash as soon as you get paid and once it's gone...... Then make sure the £313 goes to the debts and you're on the road to DFD.

snowqueen555

Thank you for posting.

I am wondering about your rent, it was £830 only two years ago in your previous SOA, and is now £1300.

At that current rate of payback what is the estimated debt free year (or is that just covering interest?) Is any leftover cash going to the debt, with the overtime? You've quiet on that bit.

And how old are you?

Thanks

weebit

snowqueen555 wrote: »

Thank you for posting.

I am wondering about your rent, it was £830 only two years ago in your previous SOA, and is now £1300.

At that current rate of payback what is the estimated debt free year (or is that just covering interest?) Is any leftover cash going to the debt, with the overtime? You've quiet on that bit.

And how old are you?

Thanks

You must have missed a bit earlier in the thread, but we used to live with someone else but she moved out earlier this year and we decided to live here without her. I know it sounds crazy, but we're 32 and and 36 years old and at a stage in our lives where we no longer want to live with other people.

All the overtime my wife works and any extra cash we make (e.g. ebay sales, quidco cashback etc), goes onto the debt.

I do live in London so most things do cost more than outside of London, but we do earn more than I would outside of London so the extra costs are more or less cancelled out by this.

According to my calculations (the perfect scenario), we'll be debt free by the end of 2020. Assumptions made when calculating this is:
1. All debt stays where it is with no changes to interest rates
2. Paying an extra £350/month on top of the minimum payments and gradually increasing this as the minimums reduce
3. Our income remains steady throughout the next 5 years

It averages at £10,000 a year which is a nice round figure to aim for. Things would would help bring forward the DFD are being offered balance transfer deals on existing cards, plus I hope to be earning at least an extra £250/week within the next 3 years, something easily achievable in my industry. This has the potential to being forward our DFD by over a year.

Lemonsqueezer78

I noticed in your latest SOA that you put down "Entertainment" as £250 - which is an increase from your original SOA where you put down £150. I think I am probably not alone in thinking that the £150 figure you put down in your last SOA was probably unrealistically low. Fair enough.

So my question is this; is your new figure of £250 on entertainment a month actually accurate? You've mentioned drinks/meals out as well as occasional gigs etc in previous posts... You have acknowledged that you think this is maybe high - but I'm actually worried the number you are giving here is not high enough.

I guess I'm saying I'm dubious as to whether that much actual analysis has gone in to this £250 figure. It still seems very low to me - especially for two people in their 30's living in London. And please don't take offence to this, however you and your wife have not exactly presented yourselves as people who necessarily like to deny themselves when an opportunity presents itself to spend money on things you enjoy.

So be honest, have you actually sat down and tracked this category of spending over a month? What have you included in there - or if no real analysis has gone in to this, what assumptions have you made to come up with £250 - and crucially, are these really realistic? £250 a month for two people barely covers drinks for a couple of (pretty tame) nights out a week drinking in London...

Given the state of your finances, rather than vaguely paper over this category I think you need to really track your spending here and confront this a bit as I strongly suspect all is not what it appears here.

I'm not calling you a liar, by the way - I'm just suggesting your estimates may be out....