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Woke up, Smelt the coffee

Hi All,

I have been lingering for far too long and need to sort this out now!

I have the following debt that I took out when I moved in with my partner to complete our house extension, I am managing to pay these back -

£3900 Bank Loan - £210 PM repayment for 3 years
£5000 parents £100 PM repayment
£1300 CC £60 PM - on interest free till July 2015

My partner had debts that he took on as part of his divorce settlement 6 years ago.

They stand at around £5000 each X 2 so £10,000 in total, that is being paid back at just £1 PM

His mortgage is interest free for the next 4 years and we pay £200 PM off of that.

My hope is that we can get totally debt free in the next 4 years so that we can get a good deal on the mortgage.

Mortgage is £115,000

I am about to do a SOA and use personal budget software.

Am I right in thinking starters would be to pay the bank loan and CC off that are in my name, to keep my credit rating up.

Then focus on tackling my partners debt, meanwhile keep paying my parents £100 per month to keep that debt going down?

I feel so positive, but so nervous at the same time!

Thank you for listening
«1

Comments

  • Statement of Affairs and Personal Balance Sheet
    Household Information
    Number of adults in household........... 2
    Number of children in household......... 5
    Number of cars owned.................... 2
    Monthly Income Details
    Monthly income after tax................ 1900
    Partners monthly income after tax....... 0
    Benefits................................ 600
    Other income............................ 0
    Total monthly income.................... 2700
    Monthly Expense Details
    Mortgage................................ 200
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 0
    Electricity............................. 45
    Gas..................................... 45
    Oil..................................... 0
    Water rates............................. 50
    Telephone (land line)................... 0
    Mobile phone............................ 60
    TV Licence.............................. 0
    Satellite/Cable TV...................... 42
    Internet Services....................... 0
    Groceries etc. ......................... 300
    Clothing................................ 0
    Petrol/diesel........................... 250
    Road tax................................ 30
    Car Insurance........................... 70
    Car maintenance (including MOT)......... 40
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 25
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 120
    Haircuts................................ 0
    Entertainment........................... 100
    Holiday................................. 50
    Emergency fund.......................... 0
    Total monthly expenses.................. 1427

    Assets
    Cash.................................... 0
    House value (Gross)..................... 140000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 140000

    Secured & HP Debts
    Description....................Debt......Monthly...APR
    Mortgage...................... 115000...(200)......0
    Total secured & HP debts...... 115000....-.........-
    Unsecured Debts
    Description....................Debt......Monthly...APR
    Old Credit Cards...............12000.....1.........0
    Bank Loan......................3900......210.......0
    Current Credit Card............1200......0.........0
    Family Loan (Parents)..........5000......100.......0
    Total unsecured debts..........22100.....311.......-

    Monthly Budget Summary
    Total monthly income.................... 2,700
    Expenses (including HP & secured debts). 1,427
    Available for debt repayments........... 1,273
    Monthly UNsecured debt repayments....... 311
    Amount left after debt repayments....... 762
    Personal Balance Sheet Summary
    Total assets (things you own)........... 140,000
    Total HP & Secured debt................. -115,000
    Total Unsecured debt.................... -22,100
    Net Assets.............................. 2,900


    Here is my SOA, I am conscious that I have forgotton something!
  • Hi,

    Not sure your income is correct on that SOA, income is £1900 and £600 not sure if I have missed something but I make that £2500.

    Is there any way you could cut down to just the 1 car?
  • Ooops, yes that is wrong!

    need 2 cars as my partner is a builder and needs a work van to transport tools and works 7-6 and children go to school opposite ends of town, and getting rid of car would incur 3 lots of bus fare per day and mean we cant go anywhere as a family...

    I just don't know which debts to tackle first :-(
  • ~Beanie~
    ~Beanie~ Posts: 3,043 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Usually the advice would be to pay minimum on everything and then throw whats left at the debt with the highest interest rate.

    Do you mean that your mortgage is interest only, rather than interest free? Also, you don't have anything down for TV licence.
    :p
  • Yes interest only!

    Surplus money is £148 after bills and debts. I never really see this though as there is always something else cropping up that 'takes' this money - school uniforms, school shoes, new clothes for growing children, school trips, broken car.

    We are managing payments on every debt, I think my goal is to tackle my bank loan, just checked and it is at £3600 now, as once that is paid off, that will allow another £210 to be towards another debt, if we just pay the £210 off that will take 17 months to pay off....
  • You really feed 7 people on £300 a month? That's fantastic.
  • You really feed 7 people on £300 a month? That's fantastic.

    3 of the children are only here 50% of the time, that probably helps!
  • ~Beanie~
    ~Beanie~ Posts: 3,043 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Surplus money is £148 after bills and debts. I never really see this though as there is always something else cropping up that 'takes' this money - school uniforms, school shoes, new clothes for growing children, school trips, broken car.

    You need to add these into your budget then. Even if you only allocate £10 per month for each category (and don't spend it!!), it soon adds up. I started doing that a few months ago and will actually have the money put aside to pay for my car tax at the end of this month, for what is probably the first time in 20 years :rotfl:
    :p
  • ~Beanie~ wrote: »
    You need to add these into your budget then. Even if you only allocate £10 per month for each category (and don't spend it!!), it soon adds up. I started doing that a few months ago and will actually have the money put aside to pay for my car tax at the end of this month, for what is probably the first time in 20 years :rotfl:

    Thank you - I think I will allow for an extra £50 per month miscellaneous, to cover things like new clothes, hair cuts, school uniform, school trips, the odd family swimming trip!

    Bring on being debt free :-)
  • hi, good luck with the debt busting :)
    could you get a part time job?
    I'd cut out the luxuries- satellite TV & holidays.
    reduce the mobile phone costs, the entertainment costs and the amount on presents .
    put something away in an emergency fund.
    pay any spare money to highest charging debt until it's gone, then move onto the next-look up the snowball calculator-it'll tell you which debts to tackle first.
    be aware you may get a penalty overpaying a loan?
    wishing you well, you sound so positive, am sure you will get this all sortd.
    LIVE SIMPLY * GIVE MORE * EXPECT LESS * BE THANKFUL

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