Where to start to cut down and decrease debt?

[Deleted User]

Hi MSE's,

I am feeling very lost and confused as I have reached a point in my life where I don't know what to do financially. I have gone through life, gaining small amounts of debt on top of each other and without budgets and I am now in a position where I want to turn it all around but don't know where to start.

What budgets should i put in place? Or what debt should i get rid of first? Where to start?

Any advice or experience would be greatly appreciated.

Thanks in advance.

moohound

Start by posting an SOA, and the smart people here will have a look.

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

Well done on taking the fist step to getting your finances sorted

As for what to get rid of first, it is usual to start with the one with the highest interest for consumer debts.

[Deleted User]

Thanks for your reply!

This is my results but i didnt include food or shopping

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 0
Benefits................................ 412
Other income............................ 0
Total monthly income.................... 1412

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 110
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 155
Electricity............................. 40
Gas..................................... 20
Oil..................................... 0
Water rates............................. 55
Telephone (land line)................... 15
Mobile phone............................ 60
TV Licence.............................. 24
Satellite/Cable TV...................... 0
Internet Services....................... 30
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 127
Road tax................................ 10
Car Insurance........................... 105
Car maintenance (including MOT)......... 5
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 19
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 7
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1382


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<
cu loan........................832......(17).......0<
other loan.....................1485.....(55).......0<
barclays loan..................570......(38).......0
Total secured & HP debts...... 2887......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................900.......18........18.9
overdraft......................300.......5.........12
Total unsecured debts..........1200......23........-


Monthly Budget Summary
Total monthly income.................... 1,412
Expenses (including HP & secured debts). 1,382
Available for debt repayments........... 30
Monthly UNsecured debt repayments....... 23
Amount left after debt repayments....... 7

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -2,887
Total Unsecured debt.................... -1,200
Net Assets.............................. -4,087

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

double_mummy

is only one of you working? with that wage either one of you is working or both are part time. if it is only get the other to get a part time job which then entitles you to working tax credits and the extras in wages as well

tibawo

is your road tax 120 a month... that seems high

also is your council tax based on ten or twelve yearly payments?

[Deleted User]

Double mummy, my partner is currently looking for a job. Also, I was recently on a higher wage but have taken a job with a lower wage so need to contact benefits so may be entitled to more now.

Tibawo, my mistake, meant £10 per month, I'll change it now thanks.

tibawo

not meaning to be picky but trying to make your balance look a bit better but why is your tv license 24? i pay mine monthly and is not this much.

mobile phone and internet seems high too... are you tied into contracts? other posters might suggest you ring to see if you can change plan.

noticed my council tax comment does not quite make sense. my council bill is split over ten months but you can ask for it over twelve. this frees up a little more.

[Deleted User]

tibawo, no problem im glad your picking up on things like this.

My tv licence is so high because i cancled the direct debit and now pay in cash with the card and they said the first so many payments would be 5.50 a week then drop down to 3 a week.

Mobile phone bill used to be 115 a month and I have recently found the cause which was going over on the internet so spoke to them and they upgraded my contract from 1gb to 8gb for £5 more a month. Also, I pay for my iPad on the same contract and it ends in January so will go SIM only from then.

Internet actually includes my home phone package in it which is unlimited home calls which lowers our home phone bill. Will be contacting them soon though about the lowering the price if poss.

Yeah, i get what you mean about the council tax, something actually happened to my council tax direct debit recently and i missed 2 months payment so called them up and payed up to date and asked them to reinstate the direct debit but said now it has to be paid by January which means I'm paying 775 in 5 months meaning 155.

Nenen

You've done the right thing in taking the first step towards getting income and outgoings to balance. I'm no expert but a few things strike me from your POA:

Your TV licence should only be £24 for the first 6 months then £12 per month after that. More info here: http://www.tvlicensing.co.uk/pay-for-your-tv-licence/payment-methods/how-would-you-like-to-pay-for-your-tv-licence-pay8?WT.ac=home_banner_wtp2#Monthly

You are paying a HUGE amount for car insurance - have you tried following Martin's tips for getting this for less? If that's not possible, would it be possible for you to manage without a car for a while?

You've budgeted for £19 per month for prescription charges - have you checked if you are entitled to free prescriptions (depending on the benefits you are on or if you/partner have a condition such as diabetes)? If not, (assuming that either you or your partner need more than one prescription per month) have you considered buying a prescription prepayment certificate (PPC)? More info here: http://www.nhs.uk/nhsengland/healthcosts/pages/ppc.aspx


Re your food costs - if your partner has the time to read and follow the MSE Elite thread (https://forums.moneysavingexpert.com/discussion/comment/66281177#Comment_66281177) you can save a HUGE amount of money on food, toiletries etc. The wonderful people on that thread are really good at helping people to play one supermarket off against another in order to get the cheapest possible (sometimes free) groceries. It does take some time and effort to get your head round how to do this (I only stumbled into the thread a few weeks ago and am still learning) but it's already saved me a great deal of money.

If you or your partner are having problems finding work that pays enough then try some of the ideas on the 'up your income' thread, e.g. babysitting, cleaning (reliable house cleaners earn £12 in my area) doing online surveys.

Best of luck.

mrsd1984

Hi, first thing that stands out is that your car insurance is v high. I realise this could be dependent on age/previous claims, but have a look into reducing this. We pay £23 a month for ours and I'm sure others get it cheaper.

Between your home phone/internet you're paying £45 a month, again this can be reduced. Have a look around at different offers etc, don't necessarily stick to the same company. £60 on mobile phone is a lot. I think I read you've increased your internet. Can you decrease it again until the contract ends, and not use the internet on your mobile. If you were to go sim only, using your internet would increase your bill by a lot so practice not using it now. Same with the iPad, I use mine at home through our home internet, do not pay monthly for it.

There are many good threads on food. I follow the monthly challenge one, budgeting £160 a month for 2 adults and a toddler. It's tough, but we've got debts so they need paying. We eat fruit and veg every day and cook from scratch. I found keeping a store of herbs and spices can give meals lots of flavours.

Best of luck, it's not easy and it takes time but definitely worth it &#55357;&#56835;

ChopinonaBudget

Are you claiming housing benefit? Your overall income looks awfully low to me and with a rent of £600 to find I'd be surprised if you weren't eligible for a percentage of your rent paid. You might even be able to get some council tax benefit although that usually gets cut off long before HB does.

I can't post a link from my mobile, but google turn2us for a benefits calculator