Nearly £20k in debt, time to tackle it...

clumsychaos

Hi,

so i've frequented these forums for quite some time, trying to pick up hints and tips and take inspiration from other peoples stories.

I thought it would be a good time to post up a SOA and finally tackle this snowballing debt. Unfortunately my DW and I have let our finances get a little out of hand and have relied on the credit cards far too much over the years. Unfortunately this all stems back to when I was made redundant and out of work for 8 months, all right in the middle of planning and paying for our wedding. Issues with cars, needing a new boiler and other house problems have all added to the debt over the years.

Now, we have decided, what with it being a new year and myself just getting a rather healthy pay rise, it is about time we do something about it all.

The plan is to take some of the surplus money we have each month and overpay a debt at a time, paying whatever the extra that is needed to up the payment to £150 a month. The loan has just under 4 years left on it so the plan is to get all the cards paid off in time for the loan to end and then reap the benefits of being almost £400 a month better off!

It's going to take time but hopefully with some strong will and frugal living we will be debt free sometime in the next few years.

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1538.23
Partners monthly income after tax....... 529.2
Benefits................................ 136.2
Other income............................ 0
Total monthly income.................... 2203.63

Monthly Expense Details
Mortgage................................ 564
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 113
Electricity............................. 40
Gas..................................... 34
Oil..................................... 0
Water rates............................. 54.18
Telephone (land line)................... 16.4
Mobile phone............................ 27.99
TV Licence.............................. 12.12
Satellite/Cable TV...................... 51.75
Internet Services....................... 0
Groceries etc. ......................... 420
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 11.37
Car Insurance........................... 38.93
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20.44
Buildings insurance..................... 17.51
Contents insurance...................... 0
Life assurance ......................... 13.9
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 50
netflix................................. 6.99
pet insurance 2......................... 14.22
mobile phone 2.......................... 31.8
Total monthly expenses.................. 1648.6


Assets
Cash.................................... 0
House value (Gross)..................... 175000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 176000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 130680...(564)......2.99
Total secured & HP debts...... 130680....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................6056.19...146.6.....6.9
Barclay Card...................3227.08...65........0
Nationwide c/c.................3715.74...30........0
Clysdale c/c...................486.75....5.........0
Sainsburys c/c.................3097.7....62........8.9
Halifax c/c....................719.41....18.2......17.95
RBS c/c........................2146.12...30........0
Total unsecured debts..........19448.99..356.8.....-


Monthly Budget Summary
Total monthly income.................... 2,203.63
Expenses (including HP & secured debts). 1,648.6
Available for debt repayments........... 555.03
Monthly UNsecured debt repayments....... 356.8
Amount left after debt repayments....... 198.23

Personal Balance Sheet Summary
Total assets (things you own)........... 176,000
Total HP & Secured debt................. -130,680
Total Unsecured debt.................... -19,448.99
Net Assets.............................. 25,871.01

twiggy86

Hi


Well done on starting a diary! It really does help keep track of your spending and your thoughts!


I did notice a couple of bits in your SOA so hope you find my feedback helpful!


Mobile phone............................ 27.99
mobile phone 2.......................... 31.8


Why are there two plus a landline? Although appreciate landline may be for internet. Both are quite high - any way you can reduce this? Or consider changing when it's due for renewal EDIT Sorry realised there's two of you!


TV Licence.............................. 12.12
Satellite/Cable TV...................... 51.75
netflix................................. 6.99


Together that's £70.86 a month for TV services. Appreciate you need to pay TV licence but do you really need both Satellite plus Netflix?


Groceries etc. ......................... 420 - This is quite high. Do you meal plan? I've just recently started doing it and I'm finding I'm spending quite a bit less on my shopping plus not wasting as much food.


Pet insurance/vet bills................. 20.44
pet insurance 2......................... 14.22


I love animals - but just checking this is correct that listed twice?


Do you really not spend anything on presents? Nothing aside for car maintenance? Would you use your emergency fund? Would you want to use your "emergency" fund for an flat tyre, annual service, MOT - if not suggest popping something aside.


Hope that helps/gives you something to think about. Good luck!

clumsychaos

Thanks for the feedback twiggy.

Two mobiles is correct, mine and the wife's. Mine is the lower and includes £40 cash back every 3 months that brings down the quoted cost to £20 a month. Her mobile is her one luxury item, and her line of contact to family that really don't live locally. She uses it a lot, and I mean a lot! Mine has a year left on the contract after which I will drop on to a sim only deal as I'm happy with the phone I have. Landline is purely for broadband. No fibre optic here yet sadly.

The Netflix is more for the kids, but a little for us. Is cheaper than renting films or buying DVDs really.

The sky TV is the one I will be looking at to be honest but it does come with free internet at the moment after signing up with sports.

Two pet insurances is correct as we have two dogs. One if which is getting on a bit hence the higher cost. Insurance is one of those things I check every year for the lowest price but the right cover. It is one I hate as it only ever goes up each year as the dogs age.

I put £420, though this is every 4 weeks and usually we do a lot less. It does cover for items like clothes/presents as we are likely to buy items that we need when we do the food shop. This is also covers dog and cat food as well. And one child who is still in nappies and those things certainly are not cheap...

Planning for presents and car maintenance is something we try to do but not something done every month so that's why I don't usually include it in the budget.

The other thing that isn't on here is the bonus I get from work every 3 months, 10% of my salary split over 4 payments each year. This is what we usually use for MOT's, servicing etc. This actually works well for us. Also comes in handy for Christmas. Now the plan is to use this extra money to put half away in savings and half towards debt payments.

clumsychaos

Unfortunately, before we can start hitting the debt we have a couple of expenses to pay out for first. The cat needs to be neutered and the car is overdue a service. Just waiting for payday next week.

Thankfully we know that coming up is a couple of council tax free months so that extra money is going straight on the cards.

We're planning on going through the house over the next few weeks to have a clear out and see what we could sell on. What with christmas now out of the way the boys have lots of new toys so there are a lot of old ones, that are still in good condition that we can sell. Also have a Ikea desk to sell on once I have emptied the drawer of random paper work and rubbish.

There are a lot of toys, kids clothes, old PCs, DVDs, books and other pieces we could sell on, but the plan is to wait for the weather to improve and warm up a bit and do a big car boot some time in the spring.

zenshi

Quite often, the Cats Protection will offer neuter vouchers. It may be worth enquiring to save some pennies

clumsychaos

Thank you, I will check them out

clumsychaos

So the plan for today is to look at transferring my balance from my Sainsbury's card that is earning interest to my Halifax card that has an offer of 18 months 0%.

Just checked out whatsthecost.com and that was scary, would take until 2037 to pay off the debt on the Sainsbury's card by just paying the minimum balancepaying over £1600 in interest!:eek:

One thing through the life of my debts I have done is always managed to keep the credit cards on 0% deals.

clumsychaos

So I just put all my debts, including all the 0% interest free dates and correct APRs in to the snowball calculator using my SOA and it gives me a debt free (excluding mortgage) date of April 2018 if I use all our surplus money against our debts.

This is great, although I would imagine it would be quite tough to do as 3 and a bit years with no unforeseen pay outs is unlikely! I would probably say closer to April 2019 would be more realistic.

If I use all of my bonus each year though we get debt free by June 2017! Again, this would be very hard to do but not impossible I suppose. I did have to cheat a little bit as the calculator only allows for 3 lots of one-off payments so I did my annual bonus paid at the end of each year.

Still, this is very encouraging that there definitely is a light at the end of the tunnel!

clumsychaos

Decided this morning to have another look at our SOA. Discussed our food budget with the DW last night and decided we could probably drop it from £420 every 4 weeks to £320. This would be £75 a week, with £20 set aside for the dog food.

I have also included putting money away each month for car maintenance at £20 a month and some for birthday presents at £25 a month. This is something we don't normally do, we used to just buy as and when but hopefully this will help with our budgeting.

My plan for the rest of today is have a look at where else we could save some money on what we currently pay out. A lot of our insurances are due for renewal in and around April so will look then. Also on a fixed deal until May on our gas and electric and would cost £60 to buy out so probably not worth it to just save £10 a year just yet. Sky is probably the main one I could look at, will probably phone this weekend to haggle with them.

Below is a copy of our new SOA.

---

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1538.23
Partners monthly income after tax....... 529.2
Benefits................................ 136.2
Other income............................ 0
Total monthly income.................... 2203.63

Monthly Expense Details
Mortgage................................ 564
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 113
Electricity............................. 40
Gas..................................... 34
Oil..................................... 0
Water rates............................. 54.18
Telephone (land line)................... 16.4
Mobile phone............................ 27.99
TV Licence.............................. 12.12
Satellite/Cable TV...................... 51.75
Internet Services....................... 0
Groceries etc. ......................... 320
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 11.37
Car Insurance........................... 38.93
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20.44
Buildings insurance..................... 17.51
Contents insurance...................... 0
Life assurance ......................... 13.9
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 50
netflix................................. 6.99
pet insurance 2......................... 14.22
mobile phone 2.......................... 31.8
Total monthly expenses.................. 1593.6


Assets
Cash.................................... 0
House value (Gross)..................... 175000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 176000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 130680...(564)......2.99
Total secured & HP debts...... 130680....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................6056.19...146.6.....6.9
Halifax c/c....................719.41....18.2......17.95
Sainsburys c/c.................3097.7....62........8.9
Barclay Card...................3227.08...65........0
Nationwide c/c.................3715.74...30........0
Clysdale c/c...................486.75....5.........0
RBS c/c........................2146.12...30........0


Monthly Budget Summary
Total monthly income.................... 2,203.63
Expenses (including HP & secured debts). 1,593.6
Available for debt repayments........... 610.03
Monthly UNsecured debt repayments....... 356.8
Amount left after debt repayments....... 253.23

Personal Balance Sheet Summary
Total assets (things you own)........... 176,000
Total HP & Secured debt................. -130,680
Total Unsecured debt.................... -19,448.99
Net Assets.............................. 25,871.01

clumsychaos

Just sorted out my savings accounts whilst on my lunch break. Now have two basic savings accounts and a new ISA (closed old one because it was old had nothing in it and had lower interest rate).

Now have £1 in my emergency fund, £1 in my present fund and £0.25 in my car maintenance fund. Well, it's a start!

clumsychaos

Just balanced transferred my balance from the Sainsbury's card that was earning interest over to my Halifax card on 18 months 0%. Should save us a little more money in the long run.

Really enjoying sorting out our money situation and relishing seeing it soon start to reduce!