Today is the Day - 36k to 0k

jackdg

Hello all!


After realising that we had to start making payments on (yet another) loan next month I realised I now need to start tackling the problem head on.


After a busy couple of years, buying the first house and getting married, we need to take some weight out of the £36k of debt we've racked up!


Of that, we have 12k left of a 14k wedding loan (3% for four years), £14,691 on a professional loan for my OH job (1.5% until 2020), and the rest on 0% credit cards (the two little ones are set up with D/D to pay them off as they expire from 0%.


I've attached a SOA which seems realistic but just thought I'd post it up so I've committed to it!


Hopefully I can throw some money at the big loans and clear them sooner rather than later


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................ 2400
Partners monthly income after tax....... 1760
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4160
Monthly Expense Details
Mortgage................................ 415
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0.15
Council tax............................. 98
Electricity............................. 65.92
Gas..................................... 0
Oil..................................... 0
Water rates............................. 22.47
Telephone (land line)................... 10
Mobile phone............................ 45
TV Licence.............................. 12.12
Satellite/Cable TV...................... 32
Internet Services....................... 15
Groceries etc. ......................... 400
Clothing................................ 50
Petrol/diesel........................... 325
Road tax................................ 0
Car Insurance........................... 82.85
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 459.59
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 15.59
Contents insurance...................... 15.2
Life assurance ......................... 16.48
Other insurance......................... 4
Presents (birthday, christmas etc)...... 20
Haircuts................................ 30
Entertainment........................... 150
Holiday................................. 200
Emergency fund.......................... 0
Gym..................................... 34
Total monthly expenses.................. 2538.37

Assets
Cash.................................... 0
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 130000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 102500...(415)......2.24
Total secured & HP debts...... 102500....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Loan - Wedding.................12000.....316.......3
Credit Card....................7800......78........0
Loan - Study...................14691.....249.......1.5
Credit Card....................411.......60........0
Credit Card....................1498......175.......0
Total unsecured debts..........36400.....878.......-

Monthly Budget Summary
Total monthly income.................... 4,160
Expenses (including HP & secured debts). 2,538.37
Available for debt repayments........... 1,621.63
Monthly UNsecured debt repayments....... 878
Amount left after debt repayments....... 743.63
Personal Balance Sheet Summary
Total assets (things you own)........... 130,000
Total HP & Secured debt................. -102,500
Total Unsecured debt.................... -36,400
Net Assets.............................. -8,900

Beginagain

Welcome to the boards and well done on posting your SOA. That can often be the hardest thing to do.


I am sure you will get lots of helpful advice from other members.

jackdg

Thanks! Looking over it, it looks like there is plenty of room to cut down...

lee111s

Indeed there is, £400 for groceries for 2 people is a lot. £150 on entertainment each month is also quite a lot. Do you need to save £200 every month towards a holiday?


£325 on fuel PLUS £440 on other travel? What is this other travel? How do you spend so much on fuel? Perhaps if you're doing a lot of miles, changing to a cheaper to run diesel may be worth it.

Karonher

Have you got a car? It does not appear anywhere on the SOA?

jackdg

Yes, agree that those figures are a lot. But looking at worst-case scenarios as this has been a busy two months with ours and my best friends wedding. It has made the last few months of bank statements very unrepresentative.


Holiday-wise I would say is generic 'saving' with some cross-over to an emergency fund depending on which needs the more 'R&R' between us and the house


As for the car situation I couldn't work out how best to represent this!


We spend the c£450 on leasing two cars as we both work about 80 miles from one another but live mid way between the two so petrol/diesel costs are high as well.

lambda

Hi and welcome to the forum!

I can see immediately a few areas you can make drastic cuts to your outgoings.

jackdg wrote: »

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................ 2400
Partners monthly income after tax....... 1760
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4160
Monthly Expense Details
Mortgage................................ 415
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0.15 15p a month? doesn't sound right
Council tax............................. 98
Electricity............................. 65.92
Gas..................................... 0
Oil..................................... 0
Water rates............................. 22.47
Telephone (land line)................... 10
Mobile phone............................ 45 This is too high. You can get sim only deals for a fiver a month
TV Licence.............................. 12.12
Satellite/Cable TV...................... 32 Can you really afford sky tv!?
Internet Services....................... 15
Groceries etc. ......................... 400 OK. This is way too high. Groceries for 2 people for 1 month should be about £150
Clothing................................ 50 cut this down, you can't aford £50 on clothes
Petrol/diesel........................... 325 Very high
Road tax................................ 0
Car Insurance........................... 82.85 very high - try cutting this by switching your insurance provider
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 459.59 what is this for?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 15.59
Contents insurance...................... 15.2
Life assurance ......................... 16.48
Other insurance......................... 4
Presents (birthday, christmas etc)...... 20
Haircuts................................ 30 £30 a month on haircuts!?
Entertainment........................... 150 what is this for??
Holiday................................. 200 200£ a month on holidays!?
Emergency fund.......................... 0
Gym..................................... 34 kill this. Go running outside for free
Total monthly expenses.................. 2538.37

Assets
Cash.................................... 0
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 130000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 102500...(415)......2.24
Total secured & HP debts...... 102500....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Loan - Wedding.................12000.....316.......3
Credit Card....................7800......78........0
Loan - Study...................14691.....249.......1.5
Credit Card....................411.......60........0
Credit Card....................1498......175.......0
Total unsecured debts..........36400.....878.......-

Monthly Budget Summary
Total monthly income.................... 4,160
Expenses (including HP & secured debts). 2,538.37
Available for debt repayments........... 1,621.63
Monthly UNsecured debt repayments....... 878
Amount left after debt repayments....... 743.63
Personal Balance Sheet Summary
Total assets (things you own)........... 130,000
Total HP & Secured debt................. -102,500
Total Unsecured debt.................... -36,400
Net Assets.............................. -8,900

You have a lot of disposable income. But, from your SOA, you seem to waste a *lot* of money...

jackdg

Totally agree, like I say this is a worst-case scenario for both of us and some things are stuck as they are (namely Car costs, mobile phone contracted until March) Monthly management charge is about £1.50 a year nominal fee for the leasehold of the house. Nearly didn't include it at all to be honest!


Some of the figures are estimating cost of the OH. No idea what she spends on haircuts, or even what is normal. My monthly haircut spend is probably £5


Entertainment is a bit of a hodge-podge of things, all of which we can cut out/cut back.

lambda

OK

So that means you have about £1600 a month spare to pay off debt? If that is the case you will be clear in just under 2 years, if my calculations are correct. Does that sound right?

jackdg

In theory yes we should have £1,600 per month to pay off debts and yes this should clear us up in two years. It does seem like a large number but with the absence of wedding costs I'm hoping that this month we can see that as our surplus in real time.


I have shimmied around some cash we have in our accounts today so will pay off the smallest CC tonight (£441) I know I should take out the 3% loan but I think psychologically cutting up the card will be symbolic

lee111s

Indeed, sometimes getting rid of a debt is a huge boost and spurs you on more to get paying the rest off. In the past I have done this, makes you feel as though you are getting somewhere and make a difference.


If you weren't leasing cars and instead bought a couple of cheap (but economical) run arounds for a while you could slash the time it takes to pay off your debts. Yes you might not look cool, but you'll be debt free a lot sooner.


Groceriecs you can chop down a lot. Shop at Aldi/Lidl and get some yellow sticker bargains that you can freeze. Get meat from a local butcher. I pay £20 for 5kg of fresh and very tasty chicken for example.


Cut your entertainment budget to £50 a month. That should still get you a trip to the cinema (go on a Tuesday when it's cheap) and a trip to the bowling alley or a night of pool at the local pub etc.


Echoing above, get shot of sky and get a sim only deal (although you're probably in contract for one or both of these)?