DFW newbie needing help!

lilybride2018

Hi all,

I am a newbie to this forum (but a long time lurker)... I've got myself into a lot of debt over the past three years and it's scaring me now; my fiance is also in a bit of debt but nowhere near to my level and we also have a joint overdraft. I have created a snowballing calendar and intend to stick to it with literally everything we can afford going onto the debt repayments, and if that's the case then hopefully we will be debt free by 2017. Just come on here to see if anyone had any ideas for how I could reduce my spending!! (I was very reckless with it when younger, sorting my life out now as we are desperate to get married but have agreed it's more sensible to do this when the debt is all paid off!)

Here is my breakdown...

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0


Monthly Income Details
Monthly income after tax................ £1200
Partners monthly income after tax....... £1000-£1200
Benefits................................ £0
Other income............................ £0-£350 (depends on whether I sell things on eBay)
Total monthly income.................... £2400-£2750: £2575 as average


Monthly Expense Details
Mortgage................................£0
Secured/HP loan repayments..............£0
Rent....................................£795
Management charge (leasehold property)...£0
Council tax.............................£175
Electricity............................£80
Gas.....................................£0
Oil.....................................£0
Water rates.............................£0 (included in rent)
Telephone (land line)...................£0
Mobile phone............................£65 (mine and fiance)
TV Licence..............................£20
Satellite/Cable TV......................£30
Internet Services.......................£0 (package deal with TV)
Groceries etc. .........................£150
Clothing................................ £0 (hardly buy clothes any more)
Petrol/diesel...........................£0
Road tax................................£0
Car Insurance...........................£0
Car maintenance (including MOT).........£0
Car parking.............................£0
Other travel............................£0
Childcare/nursery.......................£0
Other child related expenses............£0
Medical (prescriptions, dentist etc)....£16
Pet insurance/vet bills.................£0
Buildings insurance.....................£0
Contents insurance......................£0
Life assurance .........................£0
Other insurance.........................£0
Presents (birthday, christmas etc)......£65 (as an average... not every month sometimes 0 sometimes a lot more)
Haircuts................................£3.50 (average again... I do it usually!)
Entertainment...........................£200
Holiday.................................£200 (we go on three holidays a year so this is average plus mini breaks are included in entertainment, although these have previously been going on credit cards so don't know whether this is accurate or not)
Emergency fund..........................£0
Total monthly expenses..................£1799.50

Unsecured Debts
Description....................Debt......Monthly.. .APR
Sister - £53 - all paid off next month - 0
Next - £60 - all paid off next month - 17%
Parents - £700 - £200 - 0
Post Office CC - £752 - varies - 0
Nationwide CC - £1,300 - varies - 17%
Fiance Student OD - £1,800 - 19.9%
Tesco CC - £6,460 - varies - 19.9%
Joint OD - £900 - 0 - not sure but get £31 bank charges PM
My student OD - £1500 - 0 - 0

Total unsecured debts... £13,525... currently plan is to pay £550 PM off them! We don't always get the ebay money depends if I have clothes etc to sell (I bought a lot when i was at my worst!) and fiance's income is weekly so if a 4wk month we struggle; this is worst case scenario underneath:


Monthly Budget Summary
Total monthly income....................£2,400
Expenses (including HP & secured debts) £1799.50
Available for debt repayments...........£600.50
Monthly UNsecured debt repayments.......£550
Amount left after debt repayments.......£50.50


So we literally have £50 a week. I know our entertainment bill could be cut down and we've already given up smoking, drinking in the house every night and having so much of a social life (the majority is just together as well!)

Any help appreciated

Tixy

Hi and welcome to the forum

Are you happy with the snowball debt free time scale of sometime in 2017? Is that based on repaying just the £550 a month? Will you then save up for a wedding - or will you just get married ultra cheap soon after that?

If you are happy with the current debt free timescale then you could carry on spending as the SoA shows, but I think you could easily cut back more without feeling like you are hermits.

So the £50 spare on a worse month and £400 spare on a best month - will you be putting all that towards your debts as well? to bring forward your debt free date - if not where else are you going to spend it on top of what you have already listed?

Personally in your position I would drastically cut your outgoings and set yourselves a target or maybe 18months to get debt free.

Areas I'd look at first would be
Holiday.................................£200 (we go on three holidays a year so this is average plus mini breaks are included in entertainment, although these have previously been going on credit cards so don't know whether this is accurate or not) - I'd have no more than 1 cheap holiday this year
Entertainment...........................£200 - I'd try to drop this by maybe £60 to start and then see if you can get down to £100.
Satellite/Cable TV......................£30 see if you can get a cheaper deal or switch to freeview and get a cheap internet deal
Electricity............................£80 is your heating all elec? have you recently shopped around for providers? do you try to minimise usage?
Presents (birthday, christmas etc)......£65 (as an average... not every month sometimes 0 sometimes a lot more) I'd reduce this. Cut right down on presents to each other, and try to trim what you spend on others.

hohum

I take it you're somewhere in the South/ London? We have a similar joint income level (averages at £2200 a month) and I winced when looking at your rent but if that's the market rate, moving is probably not viable as it costs to move. If there are places that you can live with that are £100 less a month, I'd consider it I think.

Actually I think the plan looks viable, although you don't appear to have anything in for travel? No public transport? I'd personally reduce to one holiday this year. If you don't have contents insurance (and we don't, I have to admit) do put something aside for emergencies. Make sure you actually put it aside though. Some people say throw everything at debt - my point of view is that you need to keep a small cushion in order to stop emergencies and unforseen/ unprepared for expenses sending you back in the debt cycle.

Do you know how you ran up the debt? Simple living beyond means? Or shopping/ holidays on cards? That's also going to help you stay out of it as you pay it back.

Sazzie23

Hi LilyB

Well done for making a start at sorting your debts.
It's not your income /expenses that's the problem, more that you can't make any inroads into the debts.

I think your OD sounds quite high and likely to be expensive if you are paying any sort of charges as well as interest. Often it's difficult to get OD down as it's sort of like a floating debt with money in and out. Get yourself a spreadsheet so you can enter in max amount your OD went to each month, try to make sure this coming down each time.

Like the others said, cut to the holidays and entertainment, you can still have time off together, just do free things, it can be fun challenging yourselves to find free things to do. Another cheaper option I've discovered is to tag along to friends holiday cottages for a weekend, I.e they rent the cottage, you turn up for a couple of days, just pay part of the rent or you'll lose your mates !

Look at your mobile phone costs, if you went down a tariff would it save money, do you spend money on non essential things like picture messages?
Can you go sim only with giffgaff or Tesco?

Keep your ebay money to support you on the 4 week months, offer to sell friends and families stuff for a commission, they might be grateful for the offer.

Is your council tax on 10 or 12 month plan, if you have 2 'free months' use this as extra cash and save it for those 4 week months or put it towards your overdraft, don't just let it wash away. This year mine will be going half towards an outstanding gas bill, quarter to save and quarter on new trainers for work, a treat as I don't get many new things.

I don't suppose you can get a 0% credit card but if you could it would help as long as you make a big effort and pay back as much as you can. Have you done the snowball calculator ?

Cutting your expenses for one year, I.e. Instead of £2400 on holiday, spend £400, instead of £2400 entertainment £1000, plus the other little savings would pay almost a third of your debt, in one year !!!

I'd recommend spreadsheets for keeping track,of your debt and watching it go down. Good luck

lilybride2018

Hi guys,

Thanks so much for all your help and advice. I definitely agree that cutting down on holidays and entertainment (a large part of this is train fare to see friends who live around the country) will be a massive part of snowballing the debts and hoping to pay more. I'm hoping we can sometimes pay more than the £550 using the cutbacks and all your ideas!

Things I don't want to lose are my Sky (if we can't afford to go out every night we need some luxuries! ) and my house. We live in Manchester and the prices are all similar in the centre of the city. We both work city centre and if we moved to the surrounding areas I don't think the sacrifices would be worth it as I don't think they're as nice/safe. Plus I walk to work at the minute which saves money (fiance pays £80 PM for trams)

My mobile phone contract is up in June so I'm stuck till then; then I will look at reducing it to maybe sim only and keep this phone as long as I can still get my free texts / calls or it will end up costing more in the long run)... is this possible does anyone know?

I think our council tax is 12 months; (we live in a very expensive area for it!) and electricity is quarterly so we don't really work things out on a montlhy basis although we probably should. One thing to mention is that my fiance used to live in a house with housemates who were students (he worked). This was like 2/3 years ago and he paid all the council tax bill. Whereas when I was a student my housemate who worked got a reduction. Is there any way he could claim this back??

We are going to pay off debt then get married in 2018 (hence the name!) pretty cheaply, hoping to come on here for plenty of ideas for a design your own wedding!

Next couple of months we have already booked holidays so going to need spends (out of our own money NOT credit cards) then after that I am going to do a montlhy budget like you guys suggested!

Regarding heating, my ex colleague works for Utility Warehouse and said she can cut our bills... does anyone have any experience of this? Worried it's a bit of a pyramid scheme and don't want to get scammed - heard horror stories! We live in a ground floor flat so need the storage heaters on low pretty much always in the winter!

I ran up the debt through shopping, holidays, a brief period when I went travelling, moving into my first home... all before I met my fiance! Stupid but I am learning my lesson and will NOT do it again! :A

Thanks again all xxxx

Tiggy_Wiggy

Good luck with the debt snowballing.


With regards to your wedding dress, I recently went to a masquerade ball and if you are thinking of something 'themed' for a dress/wedding, I couldn't recommend this website enough. Such high quality for the price and they are original.


http://dawnsmedievaldresses.co.uk/


Just to clarify I have nothing at all to do with this seller apart from having bought a dress from them to go to a masquerade party last November.

Sazzie23

Don't wait to do your budget,it'll never be the right time - do it now. You can make a start saving some money which might encourage you when you come back and have the post holiday blues.

lilybride2018

Hi,

I am doing the budget from next payday; however what I was saying was due to holiday spends there is no room to save any money (like, physically save!) we will still make cutbacks and pay the required £550 though!

KirstyO

Hi Lily


Well done on facing your debts and getting a plan together to sort them out. Lots of really helpful suggestions that will mean you can maintain a certain standard of living and also throw your leftover cash at these debts to get them gone as soon as possible!


I heartily recommend Ovo for electricity. We (myself + housemate) switched to them back in September/October and are on what I think is a fixed tariff of £35pcm. We are 100% electric in our building and eon before them were taking 70-90 depending on usage.


(Note - this is only based on the experience in my current flat. I've not read customer reviews of Ovo and my housemate did all of the legwork, but she read somewhere that they have won awards for customer service/being recommended)


Good luck with it all, I'm sure if you've been lurking you'll know what a great place this is to chat over the often-stigmatised bits of being in debt, it is truly a godsend


I look forward to seeing your updates and how you get on!

lilybride2018

Kirsty,

That would be an excellent saving - eon are charging us a similar amount; I just presumed it was because it was winter and I've always been with eon with various properties / housemates! I'll definitely have a look at OVO - I'm looking forward to getting the ball rolling and seeing the debt go down! Roll on 2017!