Paying it back

chrisdanish

So today I took the drive and started to tackle my debts. It has been a mixed day of emotions. Despair, shock, shame for starters, a big dollop of relief and a bite of determination for afters.
My total debt is approximately 10k, 9 of which is on credit card and the missing one on an overdraft. Im taking home approx 1250 so this wont be quick.

After following some of the great advice, I still have 1k sat on my overdraft (or there usually is at the end of the month) but the 9k is sat on a few 0% credit cards allowing me some time to pay the debt and not the interest back. I was shocked to see that one minimum payment meant of £100 would only pay off £12 of debt. Once I have paid off my debt I may consider opening my own bank.

I have filled out a budget and I can see where I need to make some cuts. Eating out, golf, stuff I don't need. I have cancelled a few direct debits, audible (I assume everyone has at one point had an audible subscription with 6 unused credits) and Netflix. Nice things to have but not essential. Tomorrow, I'll continue looking through the site and looking at ways to make it as quick and as painless as possible.

So, I finish the day pleased with my progress. I'm not entirely sure I have grasped the magnitude of some of the changes I will have to make but I'm certain I'll get there and will have learnt a valuable lesson.

Cheers
Chris

chrisdanish

Today I saved myself £10 by not playing golf. I instead used the practice facilities for free. It wasn't a hard choice, most of my playing partners are away but I would have normally gone for 9 holes on my own. I know it's minor but it is a poke in the right direction.

I also listed some old golf clubs on a Facebook selling site. I'm not sure if they will sale but I can but try. It has started me thinking that there are probably a fair few things I own which I no longer use or at least use regularly enough. When I'm back home next week I think I'll go through and start getting a few things on Ebay.

On my return home me and my partner looked at our finances together. We compiled a SOA. I'm not sure she is as keen about the whole idea as I am but it is really important that I get myself out of this mess with or without her support.

Below is my first draft. I know it's not perfect, I'm almost certain I'm missing a few expenses however, I'm going to work with it for now and make some amendments after the first month.

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................ 1249
Partners monthly income after tax....... 242
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1491

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 20
Electricity............................. 20
Gas..................................... 45
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 45
TV Licence.............................. 12
Satellite/Cable TV...................... 15
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 20
Petrol/diesel........................... 200
Road tax................................ 12.5
Car Insurance........................... 25
Car maintenance (including MOT)......... 41
Car parking............................. 0
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 15
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 33
Haircuts................................ 0
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1063.5


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin Credit Care.............4000......50........0
Halifax........................3500......35........0
Lloyds.........................2000......20........0
HSBC Overdraft.................1250......0.........19.9
Total unsecured debts..........10750.....105.......-


Monthly Budget Summary
Total monthly income.................... 1,491
Expenses (including HP & secured debts). 1,063.5
Available for debt repayments........... 427.5
Monthly UNsecured debt repayments....... 105
Amount left after debt repayments....... 322.5

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -10,750
Net Assets.............................. -8,750

beanielou

Groceries seem high as does entertainment.
Just a thought.

chrisdanish

Thank Banielou, thanks for your input.

That's good to hear. I have been spending significantly more,especially on entertainment over the last three months worth of statements I went through. These reduced figures above were a ball park figure I think I could cut down to. So if they are still high that is encouraging. Over the next month I shall be recording everything to see how much I can manage to reduce both of these as the are by far some of my biggest outgoings. I hope that makes sense? Am I going about this the right way?

I really can't wait till the end of the month so I can see what I can manage when I at least try and be mindful of my spending.

aznlayer

Hi Chris

Good luck with the journey.

By you not paying for golf, it shows a very positive step because clearly you are now thinking hard about where your money goes, which should change the way you manage money and lifestyle (all for the better).

Paying debts off can be addictive so in time I'm sure you will find multiple ways to save even more.

chrisdanish

So, It has been a busy three/four months. But it has been brilliant, and financially I don't think I have ever been happier.

I have been making adjustments to my budgets as I have been going. As many of you suspected I would spend less on fuel and golf. My food budget has also decreased but I still think I can lower it further which is my plan for the next three months.

I have increased by earnings a little by selling off items I haven't used in over a year and I can honestly say I didn't notice they are gone and the place looks a little cleaner. I am looking at what else I can do to earn additional income and that is my plan for the next three months.

I have paid back some of my debt. I have cleared my overdraft, I have a saving account put aside where money goes each month for annual expenses such as car insurance,maintainance & tax/Christmas/Birthdays/ etc. It's great seeing my credit cards reduce appose to maintain, the 0% has really made this possible.

I think the main thing that has changed has been my outlook. I never use to want to check my account in fear. Now I'm logging in every day, recording in income and expenditure on spread sheets and get to actually see where my money is going.... And I enjoy doing so. I still occasionally spoil myself with something very small, but now I know that I have to make cuts in other parts of my budget for that month and that it needs to tally up at the end of the month.

I know I still have a great deal of debt to pay back however I know what I am doing now is realistic and achievable.

1974nicola

Well done Chris! Good to see that youve kept it up. Im worried that my current enthusiasm may be short lived!

chrisdanish

Thanks for your encouragement Nicola, wishing you a full wallet and a flowing bank account!

1974nicola

Thanks Chris! Same to you. It is good to read your story and see that you're enjoying it too!

Desperate_to_be_debt_free

Oh Chris, pass some of your enthusiasm this way please.

Well done. I've been debt busting on and off for years. Its coming down ever so slowly