Debt Advice Please Help - SOA

MrsCautious

If you cancelled satellite TV, keep fit classes, charity payment and fridge freezer insurance, this would give you a fair bit extra to pay off debts with, also you could cut your grocery bill to £200-£250 a month, that would also help and is doable, there are lots of ideas and guidance to help do this in the Grocery Challenge part of this forum. Also the trust fund for your son may not be viable really? If you owe money which is costing you to continue to owe, the money going into the trust fund may be better spent to help clearing debt?

hettiecarro

Hi
Having read all the above and without meaning to be harsh/rude, I am not sure you have had what we call the LBM,{Light Bulb Moment) when it becomes crystal clear what difficulties you are in.
The reason I say this is that you appear to think that approx. £80.00 spend on a weekly night out is o.k.
Unfortunately - if you genuinely want to get rid of these debts you need to take a harder line on your expenditure.
It may seem hard in the short term, but once you start getting to grips with your finances and bringing those debts down, you will start to feel the benefit.
The SoA need to be as accurate as you can possibly make it so that others can advise you on any suggestions for change/savings.
Sadly, the truth is that to get into debt takes time, and to get out of it ALSO takes time & discipline.
I hope you re-look at this and carry on posting for further input from other DFW's.:)

-MRS_T-

hettiecarro wrote: »

Hi
Having read all the above and without meaning to be harsh/rude, I am not sure you have had what we call the LBM,{Light Bulb Moment) when it becomes crystal clear what difficulties you are in.
The reason I say this is that you appear to think that approx. £80.00 spend on a weekly night out is o.k.
Unfortunately - if you genuinely want to get rid of these debts you need to take a harder line on your expenditure.
It may seem hard in the short term, but once you start getting to grips with your finances and bringing those debts down, you will start to feel the benefit.
The SoA need to be as accurate as you can possibly make it so that others can advise you on any suggestions for change/savings.
Sadly, the truth is that to get into debt takes time, and to get out of it ALSO takes time & discipline.
I hope you re-look at this and carry on posting for further input from other DFW's.:)

Hi Hettiecarro thank you for your honesty. £80 for a night out is for both of us maybe once a month/every 2nd month we do not go out much, very rarely do we buy clothes for ourselves so I feel we cannot stop living altogether.


However you are right I do have to start excersizing discipline as I do not want to go through my life like this any longer, and I want to create a better future for our son, and get to the point where we can decorate our home, go holidays etc all the things I long to be able to do with my family.


I am going to have a harsh look at my finances today, I know I could save quite a few pounds each week on the shopping, maybe even as much as £20 per week as currently I buy all convenience food like ready meals, pizza, biscuits crisps etc so I am going to start learning to cook, my mum will help me with that and freeze dinners for the full week/2weeks this will also help us eat better/healthier.

-MRS_T-

MrsCautious wrote: »

If you cancelled satellite TV, keep fit classes, charity payment and fridge freezer insurance, this would give you a fair bit extra to pay off debts with, also you could cut your grocery bill to £200-£250 a month, that would also help and is doable, there are lots of ideas and guidance to help do this in the Grocery Challenge part of this forum. Also the trust fund for your son may not be viable really? If you owe money which is costing you to continue to owe, the money going into the trust fund may be better spent to help clearing debt?

Hi


I would not want to cancel the sky tv as this is just the basic package. The £50 is made up from appx £16 phone line rental £10 broadband and £22 basic tv package so I would not be able to reduce this further unless I ended up with no broadband and I would end up insane If that happened lol


The charity payment is such a small amount to me but can make such a difference to a charity so I will leave that for now.


But your right keep fit classes/fridge freezer/trust fund are all going to have to go and I am going over to the grocery thread to get some inspiration there.


Thank you

Pepperoni

Hi.

You definitely need to find out the APR of your debt - ring the debt providers etc to find this information out if you have too.

I think you might benefit from using You Need A Budget (YNAB). It might help you budget more - but you need to budget for everything - that includes your window cleaning, your fitness classes, etc.

Good Luck.

MrsCautious

-MRS_T- wrote: »

Hi


I would not want to cancel the sky tv as this is just the basic package. The £50 is made up from appx £16 phone line rental £10 broadband and £22 basic tv package so I would not be able to reduce this further unless I ended up with no broadband and I would end up insane If that happened lol


The charity payment is such a small amount to me but can make such a difference to a charity so I will leave that for now.


But your right keep fit classes/fridge freezer/trust fund are all going to have to go and I am going over to the grocery thread to get some inspiration there.


Thank you

No worries, good luck with it all. I've never had satellite TV so don't really understand why it's needed, especially when someone is in debt with interest mounting, we have Freeview, there are broadband packages out there that could be cheaper? I totally understand about wanting to contribute to a charity but find it a bit nonsensical to be paying to a charity and prolonging your own debt which costs you money! You could put payments on hold and contribute more in the future? It is a small amount but every little helps could you offer an hour or two voluntary work a month instead? (Or perhaps that would cost you!) Sounds like you are making good progress with starting to budget more xx

getmore4less

The thing you need to do is proper planning budgeting.

Best to think on a year and put the averages(total/12) on the SOA.

For each category of spend decide how much you want to plan to spend on it for a year
eg going out £80 every other month is £40pm but do you add in a birthday meal or a xmas one, that's 2 more, 8 a year so £53pm

Do this for each category of spend so that the budget/plan balances over a full year.
Include a spend as debt repayment(that's the one on the SOA money left over) make that a real amount.

Decide how you want to allocate the income in advance then track that you are spending what you planned, overspend one month on going out, less to spend for the rest of the year underspend more to spend the rest of the year.

Another thing that is worth doing is go back and do a 2012 review, add up the total income and any increase in debt and try to work out where it all went.

The real issue for people is that step one is cutting back to stop the debt going up that often means things they think are essential, then further cutbacks are needed to start reducing the debt.

To do this you have to know where every penny goes so you can prioritize, something has to give.

Spending diary and a SOA that has everything on it.

getmore4less

Another 2 exercises worth doing...

Debt analysis,

Lets say your debt is £20k, how long has that been climbing, are there specifics, non recurring events like buying one offs(remember some things are not one offs like a fridge it will need replacing at some point), how much of the debt was just regular overspending, this is the hard one as you have to cut this by giving up things you have got used to spending.

The key is identifying what caused the debt and avoid it happening again, we don't need to know, but you do.

What's it costing.

if you bought something with credit work out the total cost.

Part of the resolution is making choices, essentials cut to the bone, look for better deals, then that leaves the discretionary spending.
This is where you have to look at value for money as you make the choices, part of this is knowing the true costs of the choice to spend it rather than pay of part of the debt. Prioritize everything and decide the max you want to spend on things.

Eg
If you have a £1000 debt at 15% that costs £12.50pm just interest, £750 over 5 years and still have £1000 debt.
Chose to spend another £12.50pm on something or allocate to debt then in 5 years the debt will be paid off, save you £355 of interest, have just over £100 in savings and £25pm free from then.
The saving is around £6pm on average so that £12.50 spend is really costing around £18.50pm.


Bottom line is you decide where to spend you money you can only spend each £ once, the more you allocate to debt now the more you free up for the future.