Newbie post-lightbulb

seraphelle

Hello,

I hope I am doing this right and not breaching any 'netiquette'. I have had what I believe you refer to as my 'lightbulb' moment. My husband and I have finally faced our situation and last week we contacted StepChange who have advised us to have a Debt Management Plan.

As we have both proven to be completely untrustworthy with money and lacking any sense of sane judgement whatsoever, we decided this was our best option. We have tried and failed at both the snowballing and avalanche methods (we just end up using the cards again.....) so we bit the bullet. I've completed a SOA as I believe this is required as a new member. Its ridiculously embarrassing and I'm mortified that we've let things get so bad. We were on top of things until a few 'emergencies' arose one after the other, and we don't seem to have managed to get back on our feet after them.

The Debt Management Plan is for £458 per month, and I'm hoping we'll be able to put more to it than that. I'm currently selling a load of stuff we don't use / need on eBay (have already made £150 in last fortnight) and selling my old books on Amazon (made around £40 so far on there) so we are doing what we can. We don't smoke and barely drink, so its not as if we can cut out the pub or anything. We don't do take-aways very often and eat as cheaply as possible already. The only big splurge really is the kids after school stuff but we're trying to hang on to those as much as possible as its not their fault we've been so irresponsible.

Anyway, here is our 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.................... 2
Monthly Income Details
Monthly income after tax................ 1587
Partners monthly income after tax....... 750
Benefits................................ 137.6
Other income............................ 0
Total monthly income.................... 2474.6
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 525
Management charge (leasehold property).. 0
Council tax............................. 85
Electricity............................. 55
Gas..................................... 40
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 9.5
Groceries etc. ......................... 250
Clothing................................ 20
Petrol/diesel........................... 170
Road tax................................ 40
Car Insurance........................... 80
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 150
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 30
Buildings insurance..................... 0
Contents insurance...................... 19
Life assurance ......................... 20
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1651.5

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2350
Other assets............................ 0
Total Assets............................ 2350

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
My Capital One.................2000......0.........34.9
Husband's Capital One..........1800......0.........34.9
My Vanquis.....................3450......0.........39.9
Natwest Overdraft..............2000......0.........0
My Pers Loan...................9748......0.........6.9
Husband's Pers Loan............3775......0.........8.4
HMRC Tax Credits ..............2589......0.........0
Husban'd Tesco CC..............850.......0.........18.9
My Asda Credit Card............3300......0.........18.9
Husband's Aqua.................970.......0.........35.9
My Aqua........................1980......0.........35.9
Husband's Vanquis..............2125......0.........39.9
Total unsecured debts..........34587.....0.........-

Monthly Budget Summary
Total monthly income.................... 2,474.6
Expenses (including HP & secured debts). 1,651.5
Available for debt repayments........... 823.1
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 823.1
Personal Balance Sheet Summary
Total assets (things you own)........... 2,350
Total HP & Secured debt................. -0
Total Unsecured debt.................... -34,587
Net Assets.............................. -32,237


Thanks for reading

rockm87

Hi and welcome!
just a quick couple of points, you need to add your DMP payment into this.

After that it appears you seem to have an extra £400 or so to pay off debt, is this true or is your SOA a guess rather than accurate?

bexster1975

Very well done on your lightbulb moment ( often written as LBM if you are reading other diaries) apart from your quite high mobile phone bill I think your SOA looks good.

I hope you already feel much better just having a plan sorted. Do not beat yourselves up too much about clearing cards and spending again. It is the main reason people on the forum don't like consolidation in most cases. It doesn't address the problem, so it's likely to happen again. Don't know much about DMP but would an emergency savings pot/ entertainments pot/ haircut pot / holiday pot not be more helpful initially rather than paying off more. I apologise if there is an obvious reason for adding more to DMP pot, as I say I'm not experienced with them. Just wondered if you had a pot of emergency cash it would avoid the risk of dipping into debt again if you have a problem.

Good luck with it all

Bexster

seraphelle

rockm87 wrote: »

Hi and welcome!
just a quick couple of points, you need to add your DMP payment into this.

After that it appears you seem to have an extra £400 or so to pay off debt, is this true or is your SOA a guess rather than accurate?

I should probably learn to press 'Save' and 'Recalculate' when I make changes to something, that might help

Also, the mobile phones are quite expensive (I have the dates that the contracts are up on my calendar so we can switch to cheaper contracts / pas as you go as soon as possible), but that amount does cover both mine and my husbands mobiles as well as credit on my eldest's mobile.

Apologies, here is the corrected information, the first post was my guesstimate but this one is updated with the data confirmed and sent to SC for the DMP, still not 100% this is right though now as the credit card debts and the DMP are showing together so the total debt is artificially inflated somewhat:

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.................... 2
Monthly Income Details
Monthly income after tax................ 1425
Partners monthly income after tax....... 750
Benefits................................ 137.6
Other income............................ 0
Total monthly income.................... 2312.6
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 525
Management charge (leasehold property).. 0
Council tax............................. 90
Electricity............................. 55
Gas..................................... 40
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 55
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 9.5
Groceries etc. ......................... 250
Clothing................................ 30
Petrol/diesel........................... 170
Road tax................................ 40
Car Insurance........................... 80
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 150
Medical (prescriptions, dentist etc).... 18
Pet insurance/vet bills................. 30
Buildings insurance..................... 0
Contents insurance...................... 19
Life assurance ......................... 21
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 25
Total monthly expenses.................. 1735.5

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2350
Other assets............................ 0
Total Assets............................ 2350

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
My Capital One.................2000......0.........34.9
Husband's Capital One..........1800......0.........34.9
My Vanquis.....................3450......0.........39.9
DMP (combined above)...........34587.....458.......0
Natwest Overdraft..............2000......0.........0
My Pers Loan...................9748......0.........6.9
Husband's Pers Loan............3775......0.........8.4
HMRC Tax Credits ..............2589......0.........0
Husban'd Tesco CC..............850.......0.........18.9
My Asda Credit Card............3300......0.........18.9
Husband's Aqua.................970.......0.........35.9
My Aqua........................1980......0.........35.9
Husband's Vanquis..............2125......0.........39.9
Total unsecured debts..........69174.....458.......-

Monthly Budget Summary
Total monthly income.................... 2,312.6
Expenses (including HP & secured debts). 1,735.5
Available for debt repayments........... 577.1
Monthly UNsecured debt repayments....... 458
Amount left after debt repayments....... 119.1
Personal Balance Sheet Summary
Total assets (things you own)........... 2,350
Total HP & Secured debt................. -0
Total Unsecured debt.................... -69,174
Net Assets.............................. -66,824

seraphelle

Oh and thank you for the welcome xx

DawnW

I agree with Bexster, you need an emergency fund for those annoying occasions when the washing machine blows up / car breaks down etc, as you won't have access to credit any more. Why not put the proceeds from your ebay sales etc towards that in the first instance?

A couple more points -
Your electricity / gas seems quite high.Are there arrears? Are you on the cheapest plan? Have you compared / changed recently?

Is your council tax over 10 months or 12? Quite a number of people on here have changed from the standard 10 instalments per year to 12, to help with cash flow.

Oh and welcome to the forum
Good luck with it all.

nicp60

Hi and welcome!
As others have said, your SoA looks good. I would consider putting the spare £119 into an emergency account for now. You run 2 cars of quite low value (same as us ), but often that comes with higher repair charges and if one of them is off the road that can be a huge inconvenience and expense.

Maybe set yourself a target of £2k for an emergency fund and once you've hit that with ebay sales and £120 etc savings you can throw extra at the DMP? I wouldn't start putting extra payments to the DMP until you have a really healthy emergency fund.
Along the way, if you find ways to cut back on your soa (and you'll probably get addicted to some of the challenges here!!), you can add that to your emergency fund too.

Hope this helps and best of luck on your journey. Don't beat yourself up too much, we've all been there and the most important thing is that you now all learn to deal with money and debt in a better way. This can be an amazing learning experience for the kids too!

Jon_B_2

Do you need 2 cars?

Don't be dismissive, you have a significant amount of debt and this will reduce cost significantly.

seraphelle

Thanks for your replies.

I think you're right about the emergency fund, I have a feeling my washing machine is on its way out so that would be a good idea to have a 'just in case' pot of money if it does decide to die on us.

RE two cars, sadly, we do need them both. We actually got rid of one last year and tried to manage on just the one but with both of us working and my husband's weird shifts (he's a pub Chef) and fetching the kids from school/clubs we just couldn't manage with one, it was costing just as much for buspasses and taxis as it was to run the extra car. I'm quite lucky in that I have a few mechanic friends so if anything needs doing I can often get 'mates rates' and have it fixed. We do look after our cars though and service them ourselves (it pays to have been a tomboy as a teen and helping dad and Grandad with oil changes after all!) so aside from tyres and MOT's (touch wood) we get by.

Thanks again for making me feel so welcome, and not judging. Its a breath of fresh air I can tell you! xx