More going out than coming in, cut spends but still not enough to pay off debt... :(

CleanStart

Hi,

Since I began working at age 15 I have been spending exactly what i get, leaving me with no savings and then when I earned more i got loans for things i couldn't afford yet, again assigning every single pound to spends.

Because of this i have recently had a financial breakdown and seen my stupidity but don't know how to get out of this big mess i have made. There are a couple of things that are making this very difficult for me at the minute.

I have unfortunately had to take a job with lower pay (I am currently trying for a promotion and also looking at other better paying jobs every day and considering a second job). Over the years I have built up £1200 of credit card debt, £500 of overdraft debt and £7500 in a consolidation loan spread across the next 5 years.

Because i cant afford to pay the full amounts of the loan i have had to call them up and lower the payments by £40 a month to stop me from missing a payment all together with the prospects of earning more money to continue the regular payments after 12 months then pay off the lump sum i have accrued in arrears at the end of the 5 years.

I have managed to get our shopping down from £400+ to £200 pounds, reduce our phone, internet, mobile bills dramatically but because of the reduced income we are still short each month, i ahve been doing a lot of overtime over Christmas but this wont be available throughout the year.

If anyone could share any previous experience and how they overcame this, any solutions or ideas I would greatly appreciate it as I don't know what else to do.

GwylimT

Could you post your household income and all out goings, people may be able to identify areas you can alter.

flukeas

Hello clean start.
Congrats you have taken the first step to your debt free journey
We start with a soa http://www.stoozing.com/calculator/soa.php
This allows us to see incoming/outgoing and is the best place for us to give advice on where you can save money.

CleanStart

Thanks for your replies,

A few things to mention, we are currently looking for a cheaper house to try and save on our rent as we realise £600 is a lot. I am also looking for a different job as i would save a lot on fuel as i drive quite a distance to work and back each day. Also, my insurance renewal date is due soon so hoping that my one years no claims should reduce my payments slightly and I will use the MSE advice on lowering car insurance.

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................................ 460
Other income............................ 0
Total monthly income.................... 1460

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 98
Electricity............................. 40
Gas..................................... 60
Oil..................................... 0
Water rates............................. 55
Telephone (land line)................... 15
Mobile phone............................ 38
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 17
Groceries etc. ......................... 200
Clothing................................ 15
Petrol/diesel........................... 150
Road tax................................ 10
Car Insurance........................... 95
Car maintenance (including MOT)......... 20
Car parking............................. 15
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 18
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 15
Entertainment........................... 15
Holiday................................. 0
Emergency fund.......................... 15
Pension................................. 20
Total monthly expenses.................. 1538


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................1280......20........19
Overdraft......................500.......5.........0
Loan 1.........................7200......130.......0
Loan 2.........................480.......38........0
Total unsecured debts..........9460......193.......-


Monthly Budget Summary
Total monthly income.................... 1,460
Expenses (including HP & secured debts). 1,538
Available for debt repayments........... -78
Monthly UNsecured debt repayments....... 193
Amount short for making debt repayments. -271

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -9,460
Net Assets.............................. -8,460

ERICS_MUM

Looks pretty tight, apart from pruning a few pound here and there. Could you get a second job, maybe just enough to raise an extra couple of hundred pounds a month ?

Could your partner get a job - part time if he/she stays home with the child. Personally I would work as many extra hours as is possible between you for a few months and really put every penny toward your debt. Clearly it depends on availability in your area.

Just noticed your water rates. Would your landlord consider a water meter (I don't know if it's poss in rented accommodation).

Good luck - you've made a start, please keep pushing through "the pain"

PS - have you checked for any benefits that might be available ?

EM x

GwylimT

Where in the country are you? I would be moving into a cheaper two bed property.

Why isn't your partner working? Very few people who use childcare are better off unemployed.

flukeas

Few things do you need both a mobile and a landline? Is it a mobile plan? Switching to a prepaid can be cheaper.
Both your gas and electriciy are very high ring around for a better deal. Even ringing your current provider and saying your in financial hardship and they will give you a lower rate.

TV license get rid of it.

Groceries have a look at the old style board they have excellent recipes that save you a heap of money.
Clothing 15 do you need this?

Petrol is unbelievable high. Can you public transport or car pool?
Car insurance is high shop around for a better deal.

Presents/haircuts/entertainment. Atm you really can't afford these. Cut them till you move to a cheaper place.

Dobbibill

CleanStart wrote: »

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
Does your partner not work? Is this why the benefits below are so high?
Benefits................................ 460
Other income............................ 0
Total monthly income.................... 1460

Monthly Expense Details

Water rates............................. 55
Ask your landlord about a water meter

Mobile phone............................ 38
PAYG? or ring provider, asking is always worth a try

Car Insurance........................... 95
This is high - don't forget to check TCB/Qu1dco too on renewal

Car maintenance (including MOT)......... 20
Car parking............................. 15

Contents insurance...................... 0
You should have this



Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................1280......20........19
Can you get a BT card to pay more off the capital rather than interest?

Overdraft......................500.......5.........0
Loan 1.........................7200......130.......0
Loan 2.........................480.......38........0
Total unsecured debts..........9460......193.......-


Monthly Budget Summary
Total monthly income.................... 1,460
Expenses (including HP & secured debts). 1,538
Available for debt repayments........... -78
Monthly UNsecured debt repayments....... 193
Amount short for making debt repayments. -271

This budget is very tight, there are only a few things I have suggested which may be possible but it is not going to free up enough in the budget so a 2nd job may be the only other solutions

Wishing you the very best and well done for posting a SOA to take the first steps to being debt free

DB

When_the_going_gets_tough

I think you need to seek urgent advice about your debt with the view to a DMP or possibly a DRO. At present you are living beyond your means every month. Go to CAB for a benefits check and debt advice or speak to National Debtline. Yopu need to balance your budget before paying off your debts either by increasing your income or redcing your spending - sorry to sound so harsh but the position you are in is unsustainable at the moment.

FatVonD

CleanStart wrote: »

Thanks for your replies,

A few things to mention, we are currently looking for a cheaper house to try and save on our rent as we realise £600 is a lot. I am also looking for a different job as i would save a lot on fuel as i drive quite a distance to work and back each day. Also, my insurance renewal date is due soon so hoping that my one years no claims should reduce my payments slightly and I will use the MSE advice on lowering car insurance.

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................................ 460
Other income............................ 0
Total monthly income.................... 1460

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 98
Electricity............................. 40
Gas..................................... 60
Oil..................................... 0
Water rates............................. 55
Telephone (land line)................... 15
Mobile phone............................ 38
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 17
Groceries etc. ......................... 200
Clothing................................ 15
Petrol/diesel........................... 150
Road tax................................ 10
Car Insurance........................... 95
Car maintenance (including MOT)......... 20
Car parking............................. 15
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 18
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 15
Entertainment........................... 15
Holiday................................. 0
Emergency fund.......................... 15
Pension................................. 20
Total monthly expenses.................. 1538


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................1280......20........19
Overdraft......................500.......5.........0
Loan 1.........................7200......130.......0
Loan 2.........................480.......38........0
Total unsecured debts..........9460......193.......-


Monthly Budget Summary
Total monthly income.................... 1,460
Expenses (including HP & secured debts). 1,538
Available for debt repayments........... -78
Monthly UNsecured debt repayments....... 193
Amount short for making debt repayments. -271

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -9,460
Net Assets.............................. -8,460

I know you are looking for another job but in the meantime, since you are looking to move somewhere cheaper, I think you should consider moving close to where you currently work as that will shave the £150 petrol money off your outgoings too.

pmlindyloo

Looking at your SOA it seems that your benefits are quite low. Of course I do't know what hours you are doing at work.

Are you claiming child tax credits and working tax credits? You need to work 24 hrs a week to claim working tax credits.

Put your details into the calculator here:

http://www.moneysavingexpert.com/family/benefits-check

to check your entitlement.

Of course it may be that your rented accommodation is much higher than the local housing allowance rate for a 2 bed place ( Have you checked what this it? ) so looking for a cheaper place seems sensible.

I agree that you should be consulting Stepchange/CAB/or other free debt advice charity as there is very little room for reduction in your expenditure.

Increasing income (other than the steps mentioned) seems to be the only way.