How shocking is this?? My SOA

FinanciallyUnsavvy

Hi, and welcome to the forum There's lots of great people around here who can give you genuine support and advice. It's been a total lifeline for me since my LBM in January!

Do you genuinely have £900 spare at the end of each month? If not, you need to reassess your SOA; keep a spending diary and see where the money is really going.

Your SOA isn't too bad. Like others have said, the £100pm for gifts seems a little high. You could also reduce your grocery spend down by £50-£100 a month by trying different supermarkets (I LOVE Aldi!) or by downgrading a few brands, meal planning, taking packed lunch to work instead of buying, etc. etc.

What's worked for me is setting a strict budget. I use software/app called You Need A Budget and it's amazing. It's basically the simple envelope/category budgeting system - I input the categories of my spending, how much I get each month and how much I want to spend in each category each month. A pen and paper would work though - even just jotting down each time you spend and knowing how much you have left and what money needs to do what job really does change things up.

Good luck to you on your DFW journey - you've come to the right place x

bsms1147

Don't feel overwhelmed, you're working with a surplus which makes things a lot easier.

Assuming you can throw ~£2084 at your debts (based on what you're paying at the moment and the surplus left over), and assuming that your figures for the debts are correct, and assuming that the SOA is accurate, then you could be debt-free (excluding mortgage) in around 15 months. This assumes that the 0% debts stay at 0%, which they likely won't. So I ran the calculations with them at a rather hideous 40% interest from the outset and you would be debt-free in 17 months instead.

If you don't have £900 spare each month then as others say, keep a spending diary, and analyse where every penny goes.

If you can make cutbacks in your spending then obviously you can reduce this time, but otherwise it's simply a case of just being patient, not spending unnecessarily, and paying off the debts in order of highest APR to lowest APR. Good luck.

Tommy81

Thanks for posts folks.


We do have a healthy surplus although I admit that we often spend the £900 on unnecessary items!! I Know that I should use this towards the debts but then part of me thinks that at least I can make relatively large payments and have some money left to do things with my son etc.


I think I will look at using more of the surplus to pay down debts though as I would love to get rid of them asap!

[Deleted User]

Perhaps use the surplus to pay down he big three (Overdraft, Very and MBNA), then ease back a bit, and pay down the lower APR ones at a more leisurely rate.

At the current rate you are paying those three, it will take 34 months to pay them off, and cost you £1,680 in interest.

Paying an extra £900 pm to those three, will have them clear in 7 months, for just £271 in interest.

Surely 7 months of frugality, is worth it to cut 27 months, and £1,400 of interest, off those three debts?

Out of interest (no pun intended), assuming all debts remain at the current APRs, the way you are currently paying them, will see you DF (bar your mortgage) in 28 months, for £1,946 in interest.

If you put the extra £900 toward your debts (and kept putting it toward your debts, until they are all gone), you would be DF (bar your mortgage) in 15 months, for just £642 in interest.

That's almost halving the period, and saving yourself over £1,300 in interest.

19lottie82

Tommy81 wrote: »

I can make relatively large payments and have some money left to do things with my son etc.

Op, your son is 4, he won't be aware of the difference in cost between a kick about in the park, or a trip to the cinema which costs £30 for you + him, after you've paid for tickets and snacks.

There are plenty of "free" or very cheap activities that you can so with your son that I'm sure he will love!

The things that stick out for me in your SOA, are....

1) Why nothing for car maintenance? Not realistic.

2) £100 a month for presents is huge, given your current financial situation. Cut this down to £40. That's £480 a year. Which is enough for £10 token gifts for immediate family's birthdays (agree not to exchange gifts with adults at Christmas, apart from your wife), and presents for your son / wife at Christmas / Birthdays.

3) £50 a month on clothes, every month? Buy the essentials for your son, and nothing for yourself, unless it's really necessary. For example, holes in your only pair of work shoes.

4) When is your mobile minimum term up? Switch to sim only for £10 a month ASAP


I personally don't think £250 per month is a huge amount for groceries, if it includes all your toiletries, cleaning products ect. BUT you can prob whittle it down a bit more if you want.

Start a "spending diary" and work out where all your money goes. After 2 weeks look at what you've spent and on what. Work out what you really NEEDED, and what you could have done without.

FireWyrm

19lottie82 wrote: »

I personally don't think £250 per month is a huge amount for groceries, if it includes all your toiletries, cleaning products ect. BUT you can prob whittle it down a bit more if you want.

I think we might have had this conversation before Lottie. I have two more children and £300 less a month to play with than Tommy, but my food bill is under £250 a month. It is entirely do-able with a little effort. Tommy, the trick is meal planning. I have a small white board which I got from Staples for about £10 which has compartments for the whole month. I put a meal plan up there at the beginning of the month and I only buy what is necessary and nothing else. I shop bi-weekly as the big monthly shop was causing all kinds of logistical problems (cant keep food, running out etc). Aldi will save you about 50% on the cost of your normal basket and if you buy meat in bulk and split it into meal parcels, you will find your money goes way further.

19lottie82 wrote: »

Start a "spending diary" and work out where all your money goes. After 2 weeks look at what you've spent and on what. Work out what you really NEEDED, and what you could have done without.

This is where you will have your true lightbulb moment. When you start to add up all those little trips to the local supermarket, that is where your £900 is going and then some probably. You need to get control of this. I dont participate in the 'no spend days' challenges simply because most days are no-spend days. I plan every spend, I know exactly how much it is going to cost before I step in the shop and if you are organised, you find that you simply dont need to spend on a daily basis.

19lottie82

FireWyrm wrote: »

I think we might have had this conversation before Lottie. I have two more children and £300 less a month to play with than Tommy, but my food bill is under £250 a month. It is entirely do-able with a little effort. Tommy, the trick is meal planning. I have a small white board which I got from Staples for about £10 which has compartments for the whole month. I put a meal plan up there at the beginning of the month and I only buy what is necessary and nothing else. I shop bi-weekly as the big monthly shop was causing all kinds of logistical problems (cant keep food, running out etc). Aldi will save you about 50% on the cost of your normal basket and if you buy meat in bulk and split it into meal parcels, you will find your money goes way further..

I think it's all down to what is a "good standard" of living for people. Some people will want good quality meat every night, where others will be happy with it twice a week.

Meal planning is definitely the way to go tho!

I would consider "groceries" to cover more than just food though. I'd include all cleaning products, toiletries and general household items in that too tho. Plus the couple of beers a night that my OH likes to have after work....

FireWyrm

19lottie82 wrote: »

I think it's all down to what is a "good standard" of living for people. Some people will want good quality meat every night, where others will be happy with it twice a week.

Aldi do very good quality meat. I never deign to buy sausages, burgers or other processed meats. I buy whole unprocessed meat and fish. It is not necessary to compromise one's quality of life, just one's preconceived notions. We eat meat every night and a roast every Sunday.

19lottie82 wrote: »

I would consider "groceries" to cover more than just food though. I'd include all cleaning products, toiletries and general household items in that too tho. Plus the couple of beers a night that my OH likes to have after work....

With the exception of the beer which we brew ourselves from kits you can buy on the internet (works out to 50p a pint or less and £1 a bottle for wine brewed this way), our budget includes everything for the house. I'm not sure why people keep including the cost of cleaning or stating that it is somehow expensive, because it isnt. Just how many bottles of bleach or dispensers of cif/jif type substances do you need a week?

[Deleted User]

FireWyrm wrote: »

I'm not sure why people keep including the cost of cleaning or stating that it is somehow expensive, because it isn't.

I agree.

Check out your local market.

At mine, I get 5L of bleach and Washing Up Liquid, at £2-50 each.

That's 50p a Litre.

Then I go to the £ shops for bathroom and kitchen sprays, wire wool soap scourers, floor cloths, etc.

tallyhoh

Is your SOA really correct? just wondering how you came to owe £30,000 on credit cards. Was it just putting the odd meal etc on your CC or was it for large purchases.