about time I sorted my money out (again!)

gtanny

nearly 5 years ago i was declared bankrupt, at the time i was really struggling in a job paying about 20k pa trying to support a wife and daughter

nearly 5 years on and i am in a far better place, but im starting to see the old habbits again and i want to stop this before i get into a situation i cant control

i am now in a far better paid job and with a small ammount of overtime was just under 40k last year and i am now supporting a wife and 2 daughters

the problem is i was accepted for a vanquis and aqua card when i was trying to rebuild my credit rating and got into the habbit of enjoying them so i now owe a total of 6.5k over 3 high interest cards plus paying off a car at £340 a month.

now i know this is a lot and i want to greatly reduce my debt, the car loan is a given and ends in just over 2 years and is also a lot lower interest rate then the cards are.

currently i am taking home about £2,000 a month after deductions (fuel card & 3 share options) and have the option to recall a portion of these every month but i cant touch the others just yet, i know saving when in debt isnt a wise decision but the savings rate is 150% on one share scheme and 20-50+% on a second one.

ill hunt down a SOA calculator and update the post is anyone can offer advice it would be great


OK so it may be easier to copy from my monthly outgoings spreadsheet

Rent: £550
Car £340
Water £45
Gas/Elec £97
TV Lice £12.12
Car Insur £32.75
Car Service £17.19
Sky £53.25
Counctil Tax £119
Home Insur £19
Gym £27
W/Watchers £21.45
Phone £40
Mobile x2 £75

Total £1449

thats all the outgoings apart from the card payments which are normally £150 each card and then that card used to pay for food once cleared

the problem is i find it hard to cut back on any of the extras we have, Weight watchers and Gym are very personal for my wife who has so far lost 88lb and wants to get to her gold (making weight watchers then free) phone is including broadband as we live near hull we are limited to a single provider (KC) that has no competition and the mobiles we are stuck with until late next year (stupid i know)

that only leaves sky which is the basic plus movies for the girls and its a tough choice to remove these

i know im basically arguing against the whole point of me saving money but after a couple of years of hell its nice to have some luxury in my life.

i plan to withdraw what shares i can to pay off a chunk of the cards and go from there as i know once i start it will slowly get better.

my current plan is to pick a card (highest interest) and chop it up so once payments are made i cant back out of the decision and make sure any extra cash from overtime is paid on to that card and treat every month as a flat month.

any other advise is welcome such as tips cutting back on food (we currently buy in bulk at makro and freeze - it works out on meat cheaper then asda value meat but is much better quality)

Tixy

Hi

I would try to complete a full statement of affairs (at least for yourself but ideally posting it up). http://www.stoozing.com/calculator/soa.php Does your wife pay for all the costs that are missing from the list, such as food, clothes, presents, car tax(?) etc?

Are you currently paying more than the minimum on all your credit cards? Have you tried to see if you might be able to get a lower rate credit card now? or better still a card with 0% on balance transfers? might be worth a look at that MSE eligibility checker to see if you might be accepted if you haven't tried yet.

Sorry just see you mentioned you are buying food on the cards again, in which case definitely do a SoA to see if you have shortfall each month (assuming you did not reuse any credit on the cards and only paid the minimums on the cards). If you do then you really do need to find either a way to increase income or reduce outgoings somewhere, even if it is things you would rather not give up.

On the costs you have listed a couple of comments-
Have you tried calling sky to see what cost savings there may be (perhaps a bit cheaper but without losing access to all the movies)?
Have you tried reducing your mobile phone costs - see if they will let you drop down a tariff each even though you are in contract?
Have you shopped around for gas & elec supplier to see if you are on the best deal / cheapest supplier for your usage?

BillJones

gtanny wrote: »

that only leaves sky which is the basic plus movies for the girls and its a tough choice to remove these

i know im basically arguing against the whole point of me saving money but after a couple of years of hell its nice to have some luxury in my life.

Hmm. You write about going through hell, but you really haven't been through it recently, have you? You've bought a nice car on credit, have a couple of mobile phones, you have SKY television, have a good wage, and have still racked up thousands of pounds on high-interest credit cards.

It seems, so far, that your idea of "hell" maybe needs a bit of a re-think. I don't think that you've really had your LBM yet.

longtermplanner

gtanny wrote: »

that only leaves sky which is the basic plus movies for the girls and its a tough choice to remove these

i know im basically arguing against the whole point of me saving money but after a couple of years of hell its nice to have some luxury in my life.

You are buying those movies at a high price. Wouldn't real luxury be not having to worry about money?

my current plan is to pick a card (highest interest) and chop it up so once payments are made i cant back out of the decision and make sure any extra cash from overtime is paid on to that card and treat every month as a flat month.

good plan!

any other advise is welcome such as tips cutting back on food (we currently buy in bulk at makro and freeze - it works out on meat cheaper then asda value meat but is much better quality)

Have you looked at ways to increase your household income? I'm not sure if your wife is working, if she isn't, could she get a part time job in the evenings (bar work? baby sitting?) or become a dog sitter?

gtanny

BillJones wrote: »

Hmm. You write about going through hell, but you really haven't been through it recently, have you?

It seems, so far, that your idea of "hell" maybe needs a bit of a re-think. I don't think that you've really had your LBM yet.

I went through a stage of pay the mortgage or food, I had a house of my own that ended up getting repossessed and going bankrupt for the shortfall with 6 months of avoiding all knocks at the door 2 months off work with depression and insomnia due to the fear of my debts building up, I was working 300 hours a month at times just to pay for the food for my youngest daughter.

Yes my life is a different thing now and I am far from a bad position, I have nearly 10k in shares that I have to wait for the eligibility period to clear before I have access (in 2016 I have 4k extra per year) but I dont want to use this money to pay off debts, my target is to be clear of this by this point.

As a note the car is my dads but I am paying him back due to reasons I am not willing to discuss but this money is not negotiable.

I have cut up my card so one is getting paid off until its clear and it has been removed from PayPal to avoid online purchases.

I will have a look into the SOA and see if I can get a change on my sky package maybe look into alternatives

My wife doesn't work but is looking for work at the moment in the hope we can get things clear but as she doesn't drive limiting her options to places local to us.

Please don't take this is a plea for help, I know my position is far from hell as I know what that's like I'm just after advice from people who know how to control money better than I do.

Tixy

gtanny wrote: »

I know my position is far from hell as I know what that's like I'm just after advice from people who know how to control money better than I do.

Budgeting is definitely the key. And the more detailed the budgeting the better in my experience. So for example if someone doesn't budget for their car tax and has little disposable income then when their car tax renewal hits they probably find they put that purchase on a credit card. Same as with christmas, many people don't budget for the extra costs and then end up buying presents etc using cards/an overdraft etc.

Once you have a detailed budget in place and know that it should work financially and have enough to reduce your debts then it is then worth keeping a track of what you are actually spending each month (using a spending diary or app or whatever).

Kate_fixing_it

Some good advice above and I'm glad to see you have cut up the cards.

I'd definitely get shot of the sky, switch to Netflix at 5.99 a month (your girls can watch what they want when they want) and there's absolutely loads to compensate for the lack of sky channels. There's £46 per month that can go to the debt and no pesky adverts to watch

You are also spending £115 per month on phones, try to cut this back using USwitch and/or calling your provider and asking for discounts.

Are your children in school? Check to see if they are eligible for free school meals, we've been informed one of ours qualifies for the universal free school meals from Septembe. Saves £380 a year if you pay currently but even if they have packed lunches it'll reduce your grocery bill a little.

As Tixy says a full SOA will give us a clearer idea and plenty more suggestions will fly your way.

Kate x

gtanny

Been working so not had much time to sort much else out but I have managed to sort out with my dad and reduce payments to £300 so that's £40 better a month which will go on the cards.

Tomorrow morning is the time I plan to sort stuff out as we are going to cancel or at least greatly reduce sky then decide on Netflix or now TV entertainment package as we watch a few things on sky Atlantic

I'm also going to ring 3 and try negotiate contracts but I don't think I'll get far for some reason as we use more data then minutes.

Our phone is limited to KC due to location and internet is a must for most things in life now including budgeting a shop on asda

Hopefully by the end of tomorrow I'll be up about £100 a month which would be nice

StressedSteph

Hiya


In all honesty your SKy etc probably isn't the problem, it is more likely to be misc spending throughout the month on bits that definitely add up over time.


Do you use a proper Budgeting system?. If not, I recommend YNAB (You Need A Budget), If you look at the Steam website you can often get it for a one off payment of about £22.


BUT....You get a free trial (No Direct Debit instructions needed). the free trial last 1 month and during that time you will find out if its for you or not.


The good thing about YNAB is it helps tell you if you have ANY spare money RIGHT NOW? You enter your wages and then fill in the outgoings, either done weekly or monthly depending on how you get paid. Then you must get into the habit of both you and your wife, checking YNAB to see if you have any spare money NOT the bank statement.


If you operate this system you will be surprised at how much extra cash you have. You and your wife could allocate yourselves £10 - £20 per week FUN money to spend on whatever you both want, and after that you DO NOT touch the account for anything what isn't in the Budget.


We allow £60 per week for Groceries and £20 each for week for fuel. when that is spent, you do not spend anymore.


Its an amazing system and has turned our life around this year. I have managed to pay off £5,500 of debt since January.


Good luck xx

gtanny

That's a hell of a saving Steph

I've cancelled sky and signed up for a free month of Netflix to see how it goes

I have 3 days off starting Monday where I plan to sit down with statements and do a full budget to maximise our savings

I'll update once I'm done

AngryDog

Good luck to you, its not easy giving things up. I am making a lot of sacrifices right now, downsizing the car, phone etc. It will be worth it in the long run though.

I feel your pain about KC internet - I used to live in Hull, and despite getting Fibre Optic, it was still expensive!