Finally - deep breath - Zulu Dawn SOA

Zulu_Dawn

Hi All,

I've been scared of doing this for nine months. I've finally plucked up the courage. Please don't be too harsh with me.

Firstly a bit about me. I am married with two children at primary school. My wife and I both work.

I am a recovering compulsive gambler and this part of my life has been going really well since my personal LBM last year.

We live in a lovely big house. I suspect it is worth in excess of £500k but basically it is our home (as well as security for my wife and children). I have recently renegotiated our mortgage on a three year variable deal (1.75% below standard) and don't plan to move for a while if at all possible.

My personal unsecured debt is astronomical (£146k). I am on a self-administered DMP and have managed to get interest frozen on all my unsecured debt. The minus sde of this is that I am paying back more than I can really afford. I also still have a loan with my bank but this has been kept as I have a substantial overdraft facility and one credit card which I pay off in full each month. I have never missed any payments on anything, communicated extensively with them all and have thus far received a relatively easy ride from my creditors.

I am after advice in two areas. My current situation is potentially unsustainable and so I would be grateful for any help on how to proceed. I am currently slipping into overdraft or selling stuff/ earning extra each month to get by. Secondly I would like peoples views and opinions on my SOA. What stands out - what is good what is a no,no etc.

The details are as follows. Everything has been averaged out. I should stress that this is what we have spent - not what we should have. We are getting better!

INCOME
My salary 4,400
OH 1,100
Child tax 120
Sundry income 200
Total 5,820

EXPENDITURE
Mortgage 2,030 (£333k outstanding)
Council tax 221
Electricity 90 (catching up as previously undercharged)
Gas 63
Telephone 25 (BT recently renegotiated)
Mobile 30 (very old O2 contract)
TV 11
Water 25
Car costs 125 (two old cars/insurance/MOT tax etc.)
Petrol 174 (wife drives to work)
Travel 65 (annual season ticket)
Childcare 185
Child clubs 100 (mainly piano lessons)
Clothes 220 (all family)
Food/provisions 540 (covers all supermarket purchases)
Holidays 250 (committed before LBM - will not happen again!)
Ironing/cleaning 100 (A luxury we can't really afford)
Home insurance 28 (recently negotiated)
Bank charges 12 (the price of a big overdraft facility!)
Cash expenditure 200 (covers everything else - socialising etc.)
Health club 55 (recently reduced)
Gifts/presents 200 (unbelievable!!)
Personal care 70 (hairdressing/Boots that kind of stuff)
Total cost 4,819

Available for creditors £1,001

UNSECURED DEBTS
Car HP agreement 282 (0% interest £4,515 outstanding )
Bank loan 234(9% interest - £12,963 outstanding)
11 Credit cards 826 (0% interest all in DMP - £85,800 outstanding)
3 Other loans 260 (0% interest all in DMP - £42,300 outstanding)
Monthly commitment £1,602
Shortfall £601

blackangeluk

Hi there ZD - well done for posting your SOA - its scary but a relief at the same time.

I am no expert but my DFW mind would look at the following:

EXPENDITURE
Mortgage 2,030 (£315k repayment over 25 years)
Council tax 221
Electricity 90 (catching up as previously undercharged)
Gas 63 quite high have you looked around for a better deal
Telephone 25 (BT recently renegotiated)
Mobile 30 (very old O2 contract)
TV 11
Water 25
Car costs 125 (two old cars/insurance/MOT tax etc.)
Petrol 174 (wife drives to work)
Travel
Childcare 185 do you claim childcare vouchers
Child clubs 100 (mainly piano lessons)could you stop these
Clothes 220 (all family)have you tried ebay for childrens clothes - is this a monthly figure as it's quite high if it is. You can pick up really good bundles off ebay for kids and I have even got myself a few things from there as well
Food/provisions 540 (covers all supermarket purchases)this is very high, do you do a menu plan. This could easily be reduced to about £250 for food with a menu plan and strict shopping list -
Holidays 250
Ironing/cleaning 100 presumably you pay someone - this would be better paid towards your debt
Home insurance 28 (recently negotiated)
Loan interest 90
Bank charges 12 (the price of a big overdraft facility!)
Cash expenditure 200 (covers everything else - socialising etc.)

Do you keep a spending diary? I have had mine for only a few weeks and it really makes me think about everything that I buy and if I need it - since starting it, as well as the unnecessary challenge thread, I have spend hardly anything compared to my usual spending habits.

Menu planning is brilliant - we have cut our food bills down from about £400 to £250 and I know I can still reduce this with more effort - I have two children and three animals.

Only my thoughts, hopefully I've not been harsh. Unfortunately I am learning the DFW journey means cutting back on luxuries until I can afford them.

Good luck

Karmacat

Hi ZD
Just popping in, and dittoing what Blackangeluk has said - Martin has a thing with childcare vouchers where they become worth a *lot* more than their face value, I saw it in one of his programmes, people who were already claiming the vouchers had them increased way beyond their face value.

The clothes, food and ironing/cleaning all seem very high or not absolutely essential. And, £250 a month towards your holiday? Since you say your situation is only *potentially* unsustainable, I understand that you may want to keep most or all of these amounts in your soa - but if you need it, or you want your debt to come down before you're old and grey, so to speak, these are the areas with the most immediate "give" in them.

Many, many congratulations to you for posting and for your journey recovering from gambling addiction, thats something to be really proud of. I hope this post doesn't seem harsh to you; we all have different standards of what's necessary, but holidaying at home, for instance, could save a thousand pounds a year - thats a *lot* of money!

All the best

Zulu_Dawn

Thanks Blackangel/Karmacat

You managed to post before I had even finished which is impressive!!!!!!!

Food shopping is definitely an issue. We are used to eating very well and are targeting this figure heavily. I think just our wine bill used to be £100 per month!

I do have a spending diary hence the detail here. It has been invaluable in identifying where the money really goes.

Gas - I have shopped around. We have a big house and probably very poor insulation. I don't know much about how you can get your bill down short of not heating your house or water.

Childcare vouchers are sadly not an option for me as our childminder is not registered.

Clothes is an awful number as are gifts. We really need to look at those and thank you for your suggestions.

Trust me you are not being harsh at all. I really want to get things down but we are a family and we need to all work together - something which can be hard when the reason for the mess is down to just one of you. I hope this makes sense.


ZD

PanickingHARD

Hi mate,

I'm a right one to talk , but you spend WAY too much...

I have spent best part of two years living WAY beyond my means and have come to the realisation that it simply HAS to stop... It's been hard... even in my VERY short journey so far, and I've made mistakes... LOADS (so please don't think I'm being preachy... I'm not!!) - I earn £37k a year, personally, and I just worked out that I spent £61k last year... :eek:

The thing that helped me was a reality check from the people on here, so I'll do my best to do the same for you... Please understand that I know I am asking you to do as I say, not as I do... and I fully realise the irony of that, but just typing what I am about to will help me as well as you...

EXPENDITURE
Mortgage 2,030 (£333k outstanding) Nothing you can do at the moment...
Council tax 221 Same
Electricity 90 (catching up as previously undercharged) Same
Gas 63 Get this down... change to cheapest supplier (use U-switch and only heat what you need)
Telephone 25 (BT recently renegotiated)
Mobile 30 (very old O2 contract) Nothing to do
TV 11 Nothing to do
Water 25 Nothing to do
Car costs 125 (two old cars/insurance/MOT tax etc.) Looks about right
Petrol 174 (wife drives to work) 1,740 miles per month? Assuming 10p a mile... if it's not, trade car for better MPG.... ASAP... if it's not, then could she consider alt transport... that is a VAST sum on petrol p.m.
Travel 65 (annual season ticket) Gotta be better than anything else
Childcare 185 See previous comments
Child clubs 100 (mainly piano lessons) See previous, even if only for a short time...
Clothes 220 (all family) I didn't even spend that p.m. on clothes at my WORST point, and I am a joke when it comes to clothes... you need to get this down
Food/provisions 540 (covers all supermarket purchases) Seriously, this is WAY too high... like eveyone has said, this can be halved, EASILY, with planning and not shopping in pricey places
Holidays 250 (committed before LBM - will not happen again!) Can't be helped, don't stress about it anymore
Ironing/cleaning 100 (A luxury we can't really afford) Agreed
Home insurance 28 (recently negotiated) Not bad, based on home value good work!!
Bank charges 12 (the price of a big overdraft facility!)
Cash expenditure 200 (covers everything else - socialising etc.) Shave this where you can... but I know full well how hard this is
Health club 55 (recently reduced) Drop it and road run
Gifts/presents 200 (unbelievable!!) Yup, you know the answer yourself
Personal care 70 (hairdressing/Boots that kind of stuff) Another of my vices... you can save here by only buying from cheaper places/using boots advantage points etc... also, try getting the shampoo/conditioner that's on 2 for 1 in the supermarket (usually Pantene or VO5, both of which are decent)... LOTS of savings to be made here by shopping smart...

I hope you don't mind me just being open and honest, but you seem like a guy who has already done the hard part... WAY more than I could hope to do...

Take MASSIVE pride in the things you have achieved, as they are huge, life-changing steps... You deserve credit for that, give yourself it...

Then move onto conquering the next thing... whatever it is... You, as do i, need to alter the way you view money... I'm trying... HARD... but it's actually quite a lot of fun... in a geeky kind of way!!!

Get a DFW number... Make promises to yourself and KEEP them... Stay positive, stay focussed and challenge yourself... If you can, commit to the Unnecessary Challenge... I AM LOVING IT!!!! It winds me up something CHRONIC now to spend ANY money at all on anything during the day... I begrudge every single penny!

I really hope you can see your own way through this, as that, for me, has been the difficult part... I now realise that I've changed... something in me is different... and yeah, things will go wrong, but just get back on the wagon and get positive... Every penny you DON'T spend, is a penny closer to happiness mate...

All the best... with everything...

If nothing esle, you'll always find support here... and if you read my diary, you'll find something that makes you feel better about your 'little lapses', cos I am the lapse-master!!!!

webitha

hi and welcome dont worry we dont bite (unless you ask lol)
another thing have you installed energy saving lightbulbs?

also i had (now downgraded) a large house so i know whats its like have you got proper loft instalation/cavity wall insulation as this will also keep the bills down i know its spending money but it will save a fortune in the long run i noticed practically straight away when i had this done as i REALLY noticed when the bills came in i also put tin foil between radiators and the wall to reflect heat back into house nstead of it going outside
and turn down thermastats by 1 degree

and get over to the old style board you can still eat very well at a fraction of the cost, in fact we eat better and more healthy now i only spend £200 a month inc household cleaners (thank the lord for stardrops) shampoo etc and that for 5 of use 1 in nappies (night only now :j ) and im handrearing a kitten so need special milk

sorry for waffling on i really need to go to bed lol
and get a spending diary for both of you its a real eyeopener

hope to see you here more often

blackangeluk

Hi ZD, glad you don't think we are all to harsh.

I think to get rid of your debt you simply need to live well within your means - I have lived beyond mine for years and this is the first month in about 5 years (I kid you not) that I have not spent more than I have earned.

Aldis is my new best friend, as is quidco. I have told dad and fil no presents this year for Fathers Day. Rather than buying clothes, I have been selling stuff I don't need on ebay.

I do appreciate your comment on wanting to work together as a family. Although my debt is not all my fault, I was not entirely honest with my husband about our money situation and I do feel the brunt of the blame for it. However, I cannot be a DFW without his help - have you sat down with your OH and explained this - maybe even show her your post. You have made mistakes in the past, you have showed your remorse and you are trying to put it right. You do need to work as a team though. It's quite sad but me and my DH now look forward to sharing how little we've spent and how well we feel we are doing. It has in fact brought us closer I think.

You could make some amazing savings and be debt free probably a lot quicker than you ever thought possible.

When you fill that spending diary in now, it should be - "do I really need this".

Also, as you have two children, I'm sure there must be stuff lying around that could make a good profit on Ebay or carboots - it could be a family effort - raise as much money as you need e.g. to finish off paying for the holiday to free up that £250 a month.

Good luck and hope you keep posting.

Karmacat

Hi ZD
Just seen your amended soa as BAUK's post bumped the thread. I now realise you have a shortfall of £600 a month!!:eek: :eek:

Sooooo....yep, I understand that you'll be asking the family to make cuts when you feel totally responsible for the overspend. But look at it this way. You haven't been going off to the south of France on your own and spending on hotels and casinos (uh, have you??? lol). A lot of the spending has been going on family things. So its the family things that have to give. If you're £600pm short of your minimum payments, changes have to be made, and the sooner the better - food, clothes, cleaning, gifts, health club, and personal care are where you have the most immediate room for manoeuvre. There's enough in there to find that £600, which is the most important thing, and will not only stop your debt getting bigger, but will gradually start to reduce it. Then you can do the one-offs like amazon and ebay, mystery shopping, all the rest of it.

:T Go Zulu Dawn :T

Zulu_Dawn

There are some great things for me to think about. Thank you.

I will absolutely share this with my OH. She was not aware of any of this 12 months ago. She went from thinking we were wealthy to realising I'd blown everything in a very short space of time and it is has been incredibly hard for her.

I cannot condone her for spending money like she does. The truth is she spends a lot less on clothes/products than all of her friends already. However the reality is that she still spends a lot more than we can afford and is just not that good with money.

She spent £100 at the hairdressers last month. I bought a set of clippers for £15 and now spend nothing.

The other thought I can't get away from is the length of the battle. If I can cut my costs by £600 per month, I will have cleared my debt in 12 years!!! If I could persuade my creditors to take a little less, this would enable me to put my bank into the DMP and reduce interest and bank charges.

Selling the house would enable me to clear everything. We would then have a great wage coming into the house each month so could hopefully rebuild quite quickly. Even at our current spending level, I am putting £3,600 towards my mortgage and debts and could comfortably afford £3,000 per month. However this is converting unsecured to secured and I am frankly more comfortable having not much money personally because of my past indiscretions.

It is also entirely conceivable I would be able to get some F&FS settlement deals when we sell as the equity is not all mine and my creditors are not going to get paid for a very long time otherwise.

My other thought is around say the ironing/cleaning. We pay £8 per hour to our lovely cleaner. I really should look to use the time I would otherwise spend doing these things to do something productive rather than just take those costs on. My job pays me £45 per hour - surely I can come up with something that will get me more than £8 per hour.

Anyway better get back to my job and earning that £45.;)


Thanks again



ZD

Zulu_Dawn

But look at it this way. You haven't been going off to the south of France on your own and spending on hotels and casinos (uh, have you??? lol).

Not any more!

But that is the core of the problem. How can i expect my wife not to spend £12 on getting her nails done (or give up her home) after I have blown a six figure sum on the spin of a wheel or the turn of a card.

I'm totally committed to the DFW way of life but then I'm the one who got us into this fine old mess.


ZD

Seaxwyn

Hello Zulu Dawn

Well done for posting. You come over as a thoughtful person who has realised the implications of this and I'm sure you'll find a way to pay off your debts in a shorter time than 12 years.

With earnings like yours you are clearly a highly qualified or talented person. Could you earn extra by consulting or coaching in your field?

As you've clearly spent a lot on clothes, I suggest you sell anything you can do without on ebay or find a dress agency nearby that will sell things on commission.

Good luck