Worse than we thought......

foolofbeans

getmore4less wrote: »

If you got all the interest frozen your current £1200pm would pay off the £34k in less than 30 months.
Put the debts into a snowball calculator to see how long it would take paying interest.
I think with a year of careful budgeting and planning for the variable income you will have room to loosen up the spends a bit
Maybe look at a 3 year Debt free plan with and without a DMP to see what the difference is.

Great ideas thank you. I will check out the figures as I do wonder if I'm being unrealistic but I know our income will definitely increase and hopefully we can then decrease our debts. I was hoping to reduce debts this year so we have more room to breathe but I realise this is going to take more painful cost-cutting than I have budgeted for so far.

Sanctioned_Parts_List

foolofbeans wrote: »

Mobile phone............................ 130 While in contract you can still change to cheaper tariffs - do so Is this true? I will contact the companies today to see what we can shave off.

Certainly is for O2 and 3 - not sure about the Orange/T-Mobile/EE Borg or Voda. But I used to have a bad habit of getting a top-flight phone for "free" on a really expensive contract, then after 3 months switching it for the cheapest. Still had to pay the phone back, but the line rental was much less.

Sorry if my post earlier came across as too brusque - reading back it is blunter than my normal style. I kept getting interrupted while trying to study your SOA and respond and apparently failed to keep the frustration out of the post

foolofbeans wrote: »

I understand. I will do four quarterly budgets and one annual budget so I can track if we are on the right path.

This is a really good idea. As your situation is quite complicated you might want to invest £0.00 in some good accounting software which will make it a lot easier for you to track all your scheduled payments and changes of income as well as play the game of pots to your heart's content.

I use KMyMoney but it's a faff to get working on Windows. GnuCash is also completely free and works on Windows and Mac as well. While the ledgers are no more useful than spreadsheets, its their ability to project forwards and produce reports at the touch of a button that really makes them powerful.

foolofbeans wrote: »

The first SOA was a lot of guesstimating and based on amounts we are spending. The updated one is a clearer picture of where we are now and I found it easier to do a quarterly budget with an annual one overall. I have the spreadsheets on my pc but haven't spent the time accurately transferring them over to the SOA.

Thank you for taking the time to do them and I'm sorry my last post wasn't all that it might have been.

Just one thing to note - with the "going it alone" route, you really do end up cutting into your lifestyle very seriously. I understand that DMPs allow you to reduce your payments significantly, so that while repaying your debt, you don't have to live like a monk.

It's worth talking to the likes of stepchange even if you opt not to take up their solution (I spoke to them and didn't, but learned some useful things in the process). EDIT:: I see I'm preaching to the converted :beer: My VPN's being slow today, so took ages for the post to finish, er, posting.

foolofbeans

Kitten868 wrote: »

If it was me I'd use the emergency fund to clear the little debts so I had less creditors and so less minimum payments and more to throw at the other debts. But that might be bad advice.
I was thinking of doing exactly this! Although our overall debt is high a lot of the individual debts can be realistically paid off within a few months. I thought if I paid off the credit card that is £65/month that money can go towards paying another debt. I know the snowball idea is that you target the highest interest ones but I would prefer to get rid of some monthly payments first so we can increase the payments on the larger (and higher interest) debts.
There's others on here that have contacted their creditors themselves to freeze interest and charges and reduce repayments. Which could work for you. I plan to contact the companies and see if they can assist. Even if just for a couple of months it would allow us extra income to spend on getting debts down. Got to be worth a phone call surely?
Please get some advice. This can be fixed and everyone is here because they made some stupid decisions. We are here together to see the light x

Everyone has been great. the advice is so useful and it's good to know that many have been there before and to gain their insight into what worked for them.

enthusiasticsaver

foolofbeans wrote: »

I have always been the budget control and so have failed badly in that regard. I have tried to keep partner happy by allowing him most things he wanted which was silly of me. We are both equally to blame for the debt.
I am looking around the house at things we can sell and I have loads. The only issue is that we are very rural and people don't tend to want to collect and it's not yet car boot weather. I will get on it though.

Well done in trying to make some changes and I see from your later post your OH is now on board which is good. As you say you are both equally to blame for taking it out so that means taking responsibility for paying it off. Just think how much spare money you will have when it is gone.


I guess £450 is not bad if there are 6 people all the time and you also have pet food to find.


I know you said selling things is difficult because you live rurally. I used trade in for cash website to sell my daughters' Nintendo and wii games and they do an instant valuation onlin, you print off a free post label and send it off at your local post office and they pay within 10 days straight to your bank or paypal account. Also good for buying stuff you need at a discounted price.

KID77

I felt exactly the same as you on the credit rating as i thought that was a reflection on me as a person which is why it took me a few years to sort it out. I also had a bit of a snob opinion I suppose in that people like me didn't get into debt trouble and going on a dmp was beneath me. Once i had no other option and started reading the dmp thread, i realised that these are normal hardworking people like myself who have just got into trouble for whatever reason and not trying to avoid their debt but take control and pay it back.
We now live in the black every month and even have savings, I've never had savings in my life!!!!
All our interest has been frozen so debt is coming down slowly and all creditors have been amazing. So yes my credit file is poo and will be for 6 years which affects me remortgaging but i feel so much better about it all.
If you realistically think you can pay all this back in 6 years as it is then great but you will be living such a tight and miserable budget. If you go dmp and take 6 years to pay back then you would be paying £5-600 per month, giving you some breathing room.
Dmp mutual support thread worth a read if you have time as that will answer questions about it from real life experiences and everyone is lovely on there if you have questions.
I hope whatever route you choose goes well x:D

BrandNewStart

Great thread this. Well done F.O.B. for facing up to your problems and tackling them. It can be painful and you should ignore any negativity you get. As you can see from the likes of SP there is a lot of great support on here. I massively relate to a lot of what you're saying, and can only say that you will get there in the end. It can actually be quite liberating to realise you don't need all the things you thought you did!

In my view you should definitely contact step change or similar, I did this with CAP and they have been amazing.

Best,

BNS

rising_from_the_ashes

I've read the comments re the gas / council tax etc being reduced just now - however you really need to do a 'proper' SOA - work out annual costs and / 12 to get the true monthly cost of things. Otherwise you're not getting a true reflection of what's what.

TBH I do think you should be talking to Stepchange - even just to run through things.

If you're not paying rent / mortgage just now - and you're still not managing to even break even - what will you do should this situation change?

There are multiple things that can be reduced (as per previous comments that've been made above)

Good luck

Lemonsqueezer78

My only other tip to you whilst you start this journey is to take a look at your bank accounts and make sure you are set up so that you can easily isolate and "cream off" whatever you save on your monthly spend

Most banks these days make it easy to set up a simple online "saver" account. It doesn't matter if the interest rate is crap - the money won't be in there for long anyway. So if you don't have a spare account already, just set up a new online saver account where you can easily move any amounts (no matter how small) that you do manage to save off of your monthly expenditure.

It is important to remember that as you make adjustments to your SOA, that any free'd up money must go towards repaying your debts. I know that sounds obvious, but if you are not careful about properly managing your money, it is surprisingly easy to start making savings but then have those saved pennies/pounds mysteriously disappear via random spending (just because there's is a bit of money there).

So just make sure you check your accounts regularly and can quickly identify savings that you have made and any money in your accounts that can be moved out of your main account(s) and tucked away ready to be paid off your highest interest debt.

So if you do manage to have a cheaper shopping month for some reason, take that £20 (or whatever you saved) out of your main account asap and park it in your debt repayment pot temporarily, ready to pay something off... rather than leaving it there, hoping to cream it off later if it still happens to be there (hint; it probably won't). Don't need to pay gas or council tax one month - take that money out of you main account asap - and so on.

suebgriseum

Hi,
Well done for trying to list everything, its a major step forward.

I might i have missed it somewhere but wheres the rent / mortgage - where do you live and how is it paid for?

The above comments re the savings I would in the main agree. Is your partner on board with the savings it really does need to be a 'united' front.

Its really hard with children but sit them down and discuss (briefly) the situation, you will be surprised how supportive they can be no matter what their ages are.

I am confused why the £300 salary per month , can this not be increased by another job, from home or another employer? I understand childcare can be a nightnmare, it depends on their ages of course , i've always worked full time with three kids, but i have a home office and bungle my way through the school holidays.

Can you re-train and get support for this ? then get a better paying job, doesn't help now but looking forward, you need more income, even temping work can be good and flexible.

Not sure what your husband/partner does, can this be increased , though you all need to pull together.

I ended up arranging my own low payments direct with creditiors who stopped the interest (MBNA, MINT have been particularity good surprisingly, others not so!), this can be a massive help, though affects your credit profile,

You need to stop the fancy phones, smoking, tv, go back to boring freeview, ring them fib a bit say your very ill and WILL not be able make the payments after next month, they will probably allow you to cancel the contract if they know you can't pay.

Or as others have suggested payplan or similar where they will not judge but will help you see the light at the end of the tunnel.

There is light at the end of the tunnel, you have made a major step forward, but please talk to you other half and your children its amazing what ideas they can come up with to save money!, charity shop shopping can be FUN!

blu3sky

Head on over to the Old Style Moneysaving Board- they do a monthly Grocery Challenge thread with plenty of support/ideas for reducing your grocery spend. Everyone's very friendly!!

Good luck- you've done the hardest part by starting your journey :T