Is it possible and where to start?

solvencyseeker

Hello,
I am a newbie to posting but I have been reading the boards for some time (thanks for all the posts that have kept me going!). To give you some background - we have been through some very difficult years. OH was main earner but has had 12 months unemployment and then took a minimum wage job - this led to a better but still much lower paid job than before. We have been left with a lot of debt - here are our current debts:

Natwest overdraft £1,000
Nationwide overdraft £2,000
Marks and Spencer Credit Card £11,414
Barclaycard £7,624
Bank Loan £10,340
TOTAL £32,378

On the positive side we are now both in good full time jobs (OH started a new position with the same organisation in January) and at last I think we are in a position to start paying off these debts? (I did the MSE budgeting tool this time last year and ended up contacting the Debt Counselling service who, at that time advised us to open a basic bank account and decide on a DMP - we didn't do that as we knew this job opportunity was coming for OH - though it has taken longer than we realised it would).

We are a family of 4 with 2 dogs. Son 21 lives at home (has mental health issues) but is doing well and has been in full time work since December so is contributing to the budget. Son 18 is in full time education and hoping to go to Uni later this year. He has (at last!) got some part time work starting next week. I have been giving him £20 a week (he does jobs to earn it) so am hoping I can stop that when he gets his wages.

I think we should tackle the overdrafts first - starting with the Natwest one as they now charge £6 per month plus the interest. I have been selling things on EBay and managed to pay off £300 last month. I tried that snowballing tool but it didn't seem to take the overdrafts into account?

I used to juggle the credit cards so that I paid zero interest but they are now too close to the limits to do that and we are paying interest on those, and only paying the minimum monthly amount. Both are in my name so OH could apply for a new zero interest one but I doubt he would get a high enough credit limit to transfer either of the balances.

Basically, I need advice on how to tackle this situation. I have posted a SOA below. Please help me get my head round all this!


Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 3,398.30
Income from Self Employment (before tax). . . . . . . . . . . . . . . . . . . . 0.00
State Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Pension / Annuity Payout. . . . . . . . . . . . . . . . . . . . . . . . 0.00
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 87.97
Income From Savings & Investments . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gifts From Family / Friends . . . . . . . . . . . . . . . . . . . . . . . . . . 300.00
Monthly Expense Details
In Your Home
Mobile phones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.00
TV licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.12
Internet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Home phone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.78
Cleaning products/Cleaner . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Garden maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Household maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96.00
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.00
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.20
Council tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193.00
Overdraft cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.00
Bank account fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Home insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.75
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 895.00
Plumbing/Boiler cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage payment protection . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.68
Food and household shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 650.00
Drinks for home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Motoring & Public Transport
Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200.00
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.33
Car insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.83
Car maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
Rail/Buses/Taxis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Breakdown cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Motorbike Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77.65
Motorbike finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.78
Debt Repayments
Credit card repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421.00
Hire purchase repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Personal loan repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 372.40
Car loan repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Savings & Investments
Pension payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Buying shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cash ISAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Lump sum saving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Regular saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family
Pet food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
School trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School meals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pocket money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80.00
Nappies/Baby extras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Laundry/Dry cleaning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Children's travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Baby-sitting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Childcare/Playgroups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Travel insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Entertainment
Satellite/Digital TV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family days out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cinema/Theatre trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Books/Music/Films/Computers . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big days out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Shopping for fun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86.67
Hobbies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
IT/Computing (antivirus, etc) . . . . . . . . . . . . . . . . . . . . . . . . . 4.17
DVD rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Drinking out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Eating out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Clothes, Health & Beauty
Complimentary therapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Optical bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Beauty treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Healthcare cash plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dental insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private medical insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Fitness/Sports/Gym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Work clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New children's clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Education & Courses
University tuition fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Your courses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big One-Offs
Funeral expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Wedding expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Sofa/Kitchen/TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Winter holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Summer holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Odds & Sods
Newspapers and magazines. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.00
Tax & NI Provisions (self-employed only). . . . . . . . . . . . . . . . . . . . 0.00
Regular charity donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Meals at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Smokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Coffees/Sandwiches/Snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,786.27

Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,589.35

chelle1981

Hi and welcome - debt it was of those scary subjects so even acknowledging that you are in debt and need to sort it is a huge step.

Do you think you can pay 30k off alone or do you think you should look at a dmp?

Looking at through soa- food £650 is huge- even for a family of 4 and 2 dog- you can chop this in half by being savvy- where do u shop- do u good from scratch, save left overs- take lunches to work etc- there are so many savings here and a board that will help- plan your meals and stick to your plan.

Hopefully you can stop the £80 a month pocket money? What is the £86 for pet expenses- seems high to me on top of pet food- are pets really £100 a month?

Nearly £20 a month for newspapers and magazines- do you need them? You can pick up free metro or read online.

Hope this is a little starter for you and I am sure others will chip in - xx

solvencyseeker

Hi and thanks for your reply.

There are two days a week when we are all out from 8am to 5pm so I pay for a dog walker to come midday (£10 a day). We don't use them every week of the year, son walks them in college holidays. But there are some occasions when they have to go in kennels which is expensive (e.g. family wedding coming up in a couple of weeks) so I have left the £100 a month to cover those occasions. Not to mention vet visits - one dog has epilepsy. They are expensive to keep and we have thought about giving them away but that would be an absolute last resort.

I budget £150 a week for food, household products (e.g. laundry powder) and toiletries. We do a once a month Aldi shop - it's cheaper but nearest one is a long way away so costs fuel. Then I use Tesco online as I like to see the cost as I go along (take a calcukator when we go to Aldi). Most of what I buy is value brand or the next cheapest option. Sons and OH eat like horses - I buy 36 rolls a week for lunchboxes (5 lunches x 2 rolls x 3 people and a couple extra as son 1 needs packed breakfast too). I make batches of homemade veg soup for my lunches and freeze portions. Other than that we make almost all meals from scratch. I do buy things like cheap pizzas (box of 3 for £2.69) for an easy option at the end of the week. We don't buy food out.

That said, I have noticed how much less people on these boards manage to spend so I will look at reducing this amount. I must be going wrong somewhere! Maybe those occasions when we treat ourselves to a 2 for £10 dine in will just have to stop....

The newspapers are being cancelled - just agreed that with OH this morning.

As to can we manage to do this, I really don't know. The amount of debt makes me feel ill. I am just trying to stay positive and think of ways to tackle it.

mrsscattercushion

Well done for taking these steps and looking at your budgets. The things I would look at are:


* Mobile phones ~ how many for and are these the best deals?
* Gas and electricity look high ~ are these on the best tariff/any way of reducing the usage if on the cheapest tariff?
* Pet costs look high ~ what does this cover
* You can definitely make savings on the food budget by possibly switching supermarkets/switching brands, cooking more from scratch and meal planning
*Newspapers/mags ~ you can get most of the content free online now so could look to cut this back
*IT/antivirus ~ what does this cover? if anti-virus, you can get good free programmes
* do you have the £200 left over a month as your budget indicates? if not, may be worth a spending diary to see where this goes, you don't seem to have anything for entertainment/going out in that budget? if you do, may be enough, with the £80 your son currently gets to be able to put a little away in an emergency fund whilst putting the rest to your debts
* Bike insurance ~ sorry, I know nothing about this area, but any way of getting this cheaper as seems a lot of money a year?


wishing you the best of luck

solvencyseeker

Thanks for your interest and questions.

Mobiles - The mobiles are mine and younger sons - contracts run out towards the end of this year and I will look for a cheaper deal for me. Son 2 might be able to pay his own by then.... (OH has work one and son 1 pays his own).

Gas and Electric - I used MSE Energy Saving Club to switch at the end of last year to a fixed tariff. The company asked for meter readings last month and tried to increase my total DD to £277! I "persuaded" them to keep the payment at £168.00 as that's what they had calculated on our actual usage for last year. I am hoping that the deficit we have is just the winter usage and it will be paid off over the summer months. I don't think I can switch again until after the summer as we would have to pay off our winter usage in one go.

The IT anti virus is a package we now use after a horrid experience - our laptop was hacked and money was taken from our bank accounts. All sorted now but I would not use a laptop or any other devise for home banking without good anti virus (we did have anti virus when we were hacked but it was obviously not very good and we now have one recommended by the bank).

Bike insurance is quite expensive but is for a young rider in his first year. We did do a search for the cheapest. It should go down next year.

No we don't ever have any money left at the end of the month! We make a budget and then fail to keep to it. I have a spreadsheet were I am tracking our spending but haven't quite completed it. This is definitely an area we need to improve on. Have been in denial about our spending I think...

I think my other post answered the dog and newspaper question.

We've just had a nice long walk across the fields with the dogs. They may be expensie but they keep us happier, healthier and saner (most of the time!).

I'm just about to list some more items to sell on EBay.

I do feel determined to sort this out once and for all. Thanks also for your good wishes.

consultant31

As others have mentioned, the food costs are huge. Have a look on the Old Style board for canny ways of bulking out meals cheaply

Gas and electric are also very high but should go down a little now we're getting to the better weather (hopefully), but I would still suggest turning the thermostat down a couple of notches, putting a jumper on indoors if you're chilly and making sure that all the family are in on your light-bulb moment (ie: they switch off lights in empty rooms, switch off appliances that are not in use, not just put them on standby etc etc).

I would never suggest you got rid of your dogs, they're family members (would be cheaper to get rid of the kids, lol) but could you not find some kindly local person who would happily take them for a walk occasionally for free? I notice you don't seem to have pet insurance - would it be cheaper to pay that than all the vet bills if and when the dogs are ill?

There are some clever people on this board who will find ways of cutting your weekly outgoings and give you the courage to carry on towards your goal of being debt free. Good luck

Fmess

Hi

I agree with others and think your food budget is the main area where you could save. We currently spend about £200 a month on food/toiletries/household products for 2 people.

I do all our shopping at Ald! and then go Asdar for anything I can't get from Ald!. We aim to spend no more than £40 a week on food and drink and then a max of £10 on other items. I find meal planning the week ahead (or even a month ahead) to be essential to ensure you use up good and don't have to throw stuff away.

We do 'normal' dinners like spaghetti bolognese and sausage and mash. A pack of mince usually makes 4 portions so should be able to feed your family. I add lots of tinned tomatoes and have a biggish portion of pasta if we're extra hungry. We definitely eat better at the start of the month though. With 2 days until payday we only have pasta (and sauce) and soup left so these will be dinner for the next two days.

Good luck on your journey

solvencyseeker

Hello and thanks for your advice.
Yes the food costs are a large part of our budget. I make big meals with the intention of making them last two days or freezing the leftovers but they just eat it all! Feels like I am living with a plague of locusts at times. Son 2 drinks at least 2 pints of milk a day (he is 6ft 4 and very skinny and needs to eat more calories really). We have had a long chat tonight about cutting down food costs and are going to try to eat more cheaply. Oddly enough this was easier when my OH was at home unemployed. He made bread (three loaves from a 60p bag of bread flour) and had the time to plan and cook healthy but cheap meals. More difficult when we are both working full time.
What I really want to know is how to tackle our debts - in what order. I think we need a pan of action so we know what we are aiming for.
Can anyone advise on this?

Fmess

It terms of paying off debts, I would pay the one that has the highest interest rate or charges first and then the second highest etc. The other option (which may work out similar/the same as the first option) is to pay them off from smallest to largest, so you owe to less companies. I found this a good motivator as it feels like a big accomplishment each time you finish paying a debt, and this spurs you on to continue tackling the others.

Thistlewhistle

Hi SS

I'm on an economy drive at the moment after a big unexpected bill and I'm bulking all my meals out with cheap ingredients like lentils and rice.
I managed to make 1lb of mince do 8 meals by using lentils!!!!
Admittedly, I wasn't nice to know for a while but hey! Needs must!:rotfl:

The old style board is a must for you. I was amazed at all the things you could do with a 75p bottle of Stardrops!!!:D

Good luck
Thistle

[Deleted User]

Gas and electricity seem high, at over £2,000 pa.

Likewise Council Tax.

If over 10 months, swapping to 12 months will reduce it by about £33 pm.

Food and household shopping is about £21 per day, which is :eek:

You should be able to take at least a couple of hundred off that.

Motorcycle Insurance is not far short of a grand per year. Check comparison sites and, if no better deal available, I think you need to consider selling it.

Any chance you could redo your SOA, using the regular tool, as it's easier to follow?

http://www.stoozing.com/calculator/soa.php