Help Needed - any advice appreciated

confused_manchester

Hi there,

This is my very first post and I would be most grateful of any contructive feedback.

Myself and my husband are in our early twenties and have recently moved back home so that we can sort out our financial situation. We pay only £80 a month between us in rent as we are living with family.

I have completed our SOA:

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1263
Partners monthly income after tax....... 1878
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3141
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 721
Rent.................................... 80
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 80
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 10
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1121

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

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 0........(546)......19.7
Hire Purchase (HP) debt ...... 0........(175)......5
Total secured & HP debts...... 0.........-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
(Unnamed debt).................8400......200.......0
(Unnamed debt).................3200......75........18
(Unnamed debt).................4500......128.......23.5
Total unsecured debts..........16100.....403.......-

Monthly Budget Summary
Total monthly income.................... 3,141
Expenses (including HP & secured debts). 1,121
Available for debt repayments........... 2,020
Monthly UNsecured debt repayments....... 403
Amount left after debt repayments....... 1,617

we are really serious now about sorting ourselves out and reducing our debts as quickly as possible as we would like to buy a house of our own in the near future.

please can anyone give any advice?

Many thanks in advance

MallyGirl

The SOA makes it look like you have loads of money left at the end of the month but there are a few gaps - car insurance/tax/maintenance?
While your family are being so supportive and generous I would have a frugal few months and not spend £100pcm on 'entertainment'. Throw every penny at the highest APR CC first and once that has gone then tackle the next highest. Make sure you know when the 0% card reverts to normal interest and what that APR is in case it should jump up the priority list at that time.

confused_manchester

Hi Mally Girl,

Thanks for your advice and encouragement.

Car insurance was paid upfront this year so doesnt run out until January 2015 (we will have savings to cover paying upfront again). Car is brand new so no MOT for 3 years or road tax.

Yes seems like the best thing to do is be super strict and save every single penny. I know it can be done it is just hard breaking bad habits I guess, but we are both on track now!

Thanks again

thecassman86

Hey!

Yes, breaking those bad habits is the trick really. You're in a great position at the moment to get debt-free as you're both good earners and your outgoings are small in comparison. You could easily find £1500/pm to pay off your debts. First, plough any spare cash into the card that's 23.5% APR. That should only take 3 months and that will free up a further £128/month to put toward the 18% APR card... Once paid, it's another £75/month freed up to go towards the big one. Hopefully you can get it paid off before the interest-free period is over but, if not, look into transferring it to a new one at 0%.

If you're looking at saving for a deposit on your own place then getting used to not spending every penny you earn is the key thing really. At the moment that £1600 or so is going to debt repayments but, once debt-free, it's that money which will continue going towards a house deposit so, if you're looking at buying a house ASAP, then it could be a couple of years before you're able to freely spend your money as you wish again.

I wish you the best of luck

confused_manchester

Thanks Cassyman,

that is really helpful and great advice. To be honest I am glad that we have realised our problems whilst still being young and it has really opened our eyes as to how easy it is to get into such a situation - its scary really, but we only have ourselves to blame.

Feeling more motivated - thanks guys!!

blisteringblue

What cassman is describing is a Snowball, put your debt details in here and it will work it out for you. Alter the amount of your overpayment and it will show you how quickly/slowly you can pay off the debts.

http://www.whatsthecost.com/snowball.aspx

National_Debtline

Hello there,

There is some great information about snowballing on the Debt Camel site. You can find it here: http://debtcamel.co.uk/debt-options/snowball/

Best wishes,

David @ NDL.