Debt free at last...?

koselur

Hi everyone - I have had my LIGHT BULB MOMENT today - sounds stupid but I have been researching pension schemes and it hit me that I should really sort out my DEBT and stop wasting so much on pointless interest payments and charges to get myself sorted for the future. Anyway - a bit of googling lead me here and I'm feeling inspired and positive about taking matters into my own hands and clearing my debts before they get worse.

A bit about me - I'm 26 and have been out of uni about 3 years (and working decent jobs in that period) but never managed to clear that student overdraft (or credit card...) and have subsequently managed to get ANOTHER overdraft and ANOTHER credit card (go me :eek:) and despite everything (including defaulting on payments, lying about my finances, borrowing more month on month) I have been in total denial telling myself I will pay it off then borrowing again. I have even managed to py off my credit cards just to run up bills again.

Think my main issues are not keeping track of my money (not even knowing what's in my account) & not budgeting. Living paycheck to paycheck. Am also ashamed of my financial situation so will rarely if ever tell people I can't afford something and just 'find a way' (i.e. borrow money) to pay for it

Anyway - that's (hopefully) all over now and I'm moving forward and trying to develop a positive attitude to my finances. I've done a SOA (which I will post below) and I know I am being dishonest because as with every budget I make I seem to have loads of money left over - however we all know in reality that isn't how it works. I think I will have to adjust this to be more realistic as I get a better idea of how my money is spent (I honestly don't know where it goes.....)

SO according to the SOA I currently owe £3604.41. I'm hoping to be debt free in a year - wish me luck!!

January2015

Hi and welcome

Have a look at YNAB software (you need a budget). A lot of people on here (me included) find it really useful for focussing on what needs to be done with the money you have.

Good luck with the DFW journey

koselur

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.................... 1

Monthly Income Details
Monthly income after tax................ 1339
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1339

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 250
Management charge (leasehold property).. 0
Council tax............................. 50
Electricity............................. 50
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 180
Clothing................................ 50
Petrol/diesel........................... 40
Road tax................................ 12
Car Insurance........................... 36
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 10
Entertainment........................... 300
Holiday................................. 50
Emergency fund.......................... 0
Total monthly expenses.................. 1188


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 250
Other assets............................ 0
Total Assets............................ 250

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax CC.....................592.14....16.55.....25.95
Natwest CC.....................475.75....10.71.....17.4
Halifax OD.....................600.......31........0
Natwest OD.....................1936.42...25........0
Total unsecured debts..........3604.31...83.26.....-


Monthly Budget Summary
Total monthly income.................... 1,339
Expenses (including HP & secured debts). 1,188
Available for debt repayments........... 151
Monthly UNsecured debt repayments....... 83.26
Amount left after debt repayments....... 67.74

Personal Balance Sheet Summary
Total assets (things you own)........... 250
Total HP & Secured debt................. -0
Total Unsecured debt.................... -3,604.31
Net Assets.............................. -3,354.31

Reproduced on Moneysavingexpert with permission, using Firefox browser.

Few bits about the SOA and my current situation... I live with my partner (he owns the house and I pay rent) which means that the bills situation is not straightforward - everything is in his name and I pay him £100/ month - so in the SOA I have just divided this as £50 towards council tax and £50 towards electricity and left the rest as 0. Even though we live together our finances are on the whole very separate. We;ve been living together since June and I have to say my situation has been easier - but I still don't seem to be clearing any debt...

My phone bill is nominally £12/month (sim only) but I usually go a bit over on my data (have been meaning to get this renegotiated for ages - need to stop putting this off!) so I can pay up to £20

Groceries, clothing & entertainment are all total guesses really - could in reality be much higher and fluctuates A LOT. I know these are ALL areas where I can save and will be my first targets!

With my car expenses again these are largely guesses as I don't keep track - I get the feeling the car is fairly cheap to run (me and my partner split these costs 50/50 and it's an old banger) but there are always unexpected repairs etc so I have tried to factor these in... Other travel is taxis which I know is an expense I can DEFINITELY cut out.

Presents again a huge guess - my mum's 50th a few weeks ago I probably spent about £200 but then again some months this is nothing so not sure.

Haircuts I have been generous I probably get it done twice a year and never spend more than £30. I do put £50 aside most months for holidays as me and my partner save for these together (not sure if you can tell but he is a lot better with money than me haha!!).

In terms of debt I have guessed at my Natwest CC interest rate as I don't know and I'm embarassed to say I don't look at my statement just make a payment online each month. Will open my next statement and update this. I have recently been paying off £50/month but always seem to end up putting something back on there. These are getting cut up in a minute! My Halifax overdraft isn't interest based but I pay a flat fee of £1/day I use it (and £5/day if I go over) - usually works out to be about 25 or 30 quid (when I get paid I usually have a week or so when I'm not in it, then go back down into the red). My Natwest account is basically a dead account (I call it the black hole). A while ago I set up a standing order to pay it off £100/month but guess what - I usually end up withdrawing that money at the end of the month.....

Anyway, long post I know... my aim is to set up a budget (have downloaded the trial of YNAB) and try to STICK TO IT. Hopefully this will give me a more realistic picture of what I'm actually spending on.... I will also try to keep a list of my goals and tasks to track my progress.

Thanks for reading! Any tips AT ALL are really appreciated.

koselur

January2015 wrote: »

Hi and welcome

Have a look at YNAB software (you need a budget). A lot of people on here (me included) find it really useful for focussing on what needs to be done with the money you have.

Good luck with the DFW journey

Thanks January & good luck to you too!! I have downloaded YNAB and it seems like a great tool... just need to figure out how to use it

January2015

koselur wrote: »

Thanks January & good luck to you too!! I have downloaded YNAB and it seems like a great tool... just need to figure out how to use it

You can sign up for the webinars - I watched a youtube version :beer:

January2015

You might get more response and advice to your SOA on the main forum - not everyone delves into diaryland

It's definitely worth continuing your diary to keep track of your progress - but try posting your SOA and asking for advice on the main forum.

koselur

So I've been ignoring this section of the site and getting advice and lurking on the main forum.... however, a few setbacks this month have got me thinking it would be a good idea to keep track a bit better.

This month has not been the greatest so far... but will start with the positives!

I set up a budget on YNAB which seems like a great tool.. I have already put some money into my budget for next month to pay for it but hopefully I can get a discount so won't need the full amount.

I have been bringing lumch into work most days which is already saving me loads of money. I've also been doing MUCH better with grocery shopping - cut this to about £15-£20 /week. We have been drinking home-brew too which has saved A LOT on beer money and has meant we have been having people round at ours more rather than going to the pub. Have also bought nearly all our pet supplies in bulk which saved a TON of money - only reason I hadn't done this before was that I didn't realise how much cheaper it is!

I've spoken to some of my friends about needing to save money and they have all been really understanding. I've also had a chat with my OH about finance stuff - while our finances aren't joint we obviously do a lot of things together that we pay for equally - he earns more money than me and is often wanting to go out for meals etc. These are the kind of temptations which lead to me spending (wasting!!) hundreds each month on entertainment. So we are doing more at home dates and finding cheap and free things to do for fun

I have set up various savings accounts through my online banking to set money aside for Christmas, holidays, emergencies, car stuff etc. I'm still seeing how things go budget wise since I was paying so little attention to what I spent I actually don't know how much a lot of things cost and where my money goes. I still haven't been brave enough to go through my bank statements further back than the last couple of months which I KNOW I need to do...

Which brings me to my next point..... after a few weeks of doing really well I seem to have gone back into denial about the spending I had a trip to York planned at the weekend and it had been on the horizon for ages. I knew it would be expensive but I went STRAIGHT back into my old habits of spend spend spend and don't think about it. I know it's only a weekend but I'm SO disappointed in myself to have such a set back so soon after I started trying to get my finances in order I haven't even had the courage to look at my bank account but have set aside some time this evening to balance the books. I'm dreading it. I've checked my balance and have enough to see me through the month but am not looking forward to seeing what that money was wasted on.

Added to this I have just found out my car has a problem with the engine. My mechanic advised that it's not worth getting the work done and just to keep driving it until it stops working!!!! (My car is vv old and I only paid £475 for it). No problem in one sense since it means that there are no costly repairs that have to take place right now, but the car could pack up any time over the next few months so I really need to bear in mind that I will need a new car in the near future. I have about £90 in total in my car and emergency fund so will need to work hard to bulk this up in April & May so that buying a new car won't be such a hit (this will be 50/50 with my OH and we will probably get another banger). It's also my birthday in a few weeks and my granny has very kindly said she will give me a little money towards the new car which is really generous of her.

So ups and downs but definitely better than a normal month of spending.... have managed to pay about £200 off my debt (will do a stock take at the end of the month) and actually have some money in an emergency fund for the first time in my life!!!!! And am definitely sitting down this evening and getting strict with myself again.

It is really sinking in how vigilant I will have to be with myself until I get into good habits *sigh*

koselur

so have just balanced the books - it's bad but not too bad. have managed to juggle things on YNAB and i should be ok to the end of the month - it's a five weeker for me between paydays so would have been tight anyway.

think i need to get myself out of the mindset that i can carry on having/doing all the same things but with less money eeeek!

next two weeks (until payday) have been planned out and there are a lot of no spend days in there so i'm thinking this will all work out ok. next month i'm not going to take my eye off the ball at all, my aim is to check internet banking every day...

koselur

So have been doing really well after my set back last week.

I did go out on Friday evening which cost about £20 but it was something I had planned months ago and my friend had already bought tickets so I didn't want to let her down. I had budgeted for this at the start of the month so I don't feel too bad about it..

Apart from that me & OH had an at-home date on Saturday night for which we spent a grand total of £2 on a tub of ice cream - we had a nice meal with stuff we bought for groceries.

Apart from that I spent nothing! OH owes me a little for groceries which will cover what I spent at the weekend so my bank balance is looking more or less the same as this time last week.

Bad news is that my rabbits both went in to be neutered this week (budgeted in advance) and both had complications from the op due to a genetic abnormality (shared by both as they are brother). Apparently it's incredibly rare and very serious. Luckily the vets have been brilliant and operated straight away free of charge and have organised the follow up appointments free of charge also. We do however have to pay extra as they were in overnight and there is various medication which they need to take this week. It's such a shame on top of the car going - my first month of emergency saving and I have two emergencies! Typical! I get paid next week so will have to have a tight month to make up for it. I've got no 'extras' planned in terms of long arranged weekends away or nights out so it should be pretty easy to live on the cheap (here's hoping....).

koselur

SO payday today and I am staring down the barrel of my first full DFW month!

March had some ups and downs but I feel so much more in control. Sadly only managed to reduce my debt by £13, but that's £13 more than tha month before. I'm hoping to knock about £200 off this month if everything goes to plan. I'm just so happy that even with the emergencies I didn't borrow more and made all my payments on time, didn't go over my overdraft limit etc.

I have drawn up my budget for April and feel confident I can stick to it. Have come clean about my situation to most of my mates so my social plans for this month are much more modest (my big night out will be £5 for ice skating haha) - everything else is nights in with wine & films, or walks in the country (if it EVER stops raining).

I've also been reading about decluttering techniques and so am going to spend some time over the BH 'kondoing' my house eeeek!

koselur

Oooh also have talked with OH about how much we actually need the car and we are thinking of not replacing it when it packs up and see how that goes for a while...