Newby debt:Realisation dawned! Help..

Ch1979

Hello!
I finally realised yesterday that I have been ignoring the fact I am in debt
I have £4000 of debt, 3000 of which is now on a 0% credit card and the remainder will be the same on a money transfer for 0%.
I had it split between 2 credit cards and my overdraft and it steadily rose in the last 2 months for expensive boiler repairs, shopping, Christmas and a holiday. I pretty much ignored it :more fool me!
My credit score is shot but thankfully my existing card was able to offer me a deal which will tide me over until my score is better.
I have analysed my spending with an app and will be cancelling anything I am not tied into direct debit wise (such as sky and my contact lens subscription) I have identified areas of quite negligent spending: supermarkets,beauty products, clothes and takeaways!
I was in this situation about 7 years ago and used to transfer 70 a week for food, petrol and shopping into my savings account as it had a card. I cleared 2500 of debt in 14 months.
I am just unsure that psychologically I am as prepared? And it's more than clearing the debt, it's changing my priorities without feeling downhearted?
I live alone and have a flat which I intend to sell and move in with my boyfriend as his place is owned by his grandmother and much cheaper. He has been great about this and is up for getting his finances in order too. We intend to save for a deposit and I expect to have a bit of profit from the sale. My sister will help me to pay for necessary repairs on the flat before it sells. I am loathe to take a mortgage holiday (I am able to) as it won't help deal with my spending habits before me and the Boyf move in.
I am lucky in that I have hoarded lots of beauty and household supplies, am able to sew, don't really drink and am very creative.
My system works either with cash or bank account. I am using cash and have budgeted 110.00 per week after my credit card repayments, mortgage,bills. I have sub divided the 110.00 into sections: food, cat, home, petrol, smoking (yes I know! But that is also being reigned waaay in) and treats. The period starts every Sunday and on the Saturday I always go into town with my sister. Anything that's left over gets paid or transferred back into my bank in person. This is the only day I get to spend with her and she herself probably needs reigning in on spending!
I feel excited at the challenge. I feel that I need to focus on what I can achieve within this budget such as a better diet (I am veggie so food is cheap) a reason to get sewing and creating and actually appreciating treats. I will be selling anything that is sellable and looking at ways to make money ( I had a lot of success with spread betting) Any other suggestions are welcome as I am rather rusty!
Many thanks in advance

Ch1979

And my sister has the credit cards.

utroi85

Hello and welcome, good job you've realised to sort all this out.

You will need to complete a Statement Of Affairs (SOA) - I'm currently unable to display links at the moment but someone will pop one up very shortly I am sure.

Once you've done that people will be able to point out what can be lowered or what should be higher etc.

When they can see what your final excess cash amount per month is then they will be able to help you further.

National Debt Line also post here and are able to point you in the right direction.

I can tell you that they will immediately tell you to stop smoking - if you can't do that, can you make roll up's certainly much more cheaper.

I am sure the others will be here shortly..

About the bit about not being able to post links - I can now, clicky clicky ---> http://www.stoozing.com/calculator/soa.php

Ch1979

I'm on a phone and can't seem to get the soa to copy
1569 income
Rent/mortgage 405
Energy 50
Council tax 71
Tv 12
Car tax 11
Income protection 12
Cat insurance 12
Home insurance 8
Sky 33 (cancelling) can watch parents sky go
Mobile & iPad 42 (cancelling iPad Feb) 21
Contact lenses 12 (cancelling)
Boiler cover 9
Emergency cover 6
Bank package (phone,car breakdown,travel, overdraft rate:have used all) 16
Current interest charges £24 (will be 0.00)
Groceries 200 (new budget 100)
Cat food,litter,flea etc 40
Cigs 160 (now 80)
Household & personal care 70 (new budget 40)
Petrol 40
Emergency 10 (will be returned to account if not spent)
Treats:25
which include the following
Clothing
Art and craft items
Hot drinks from Griggs etc
Nights out
Haircut
Non essential beauty or household items
Alcohol
Takeaways

Under my new budget I should have more than enough to meet a monthly payment of 340 to get rid of the debt within 12 months. Not sure whether to save the excess for solicitors fees or pay off more of the debt as moving into boyfs would save me almost another 350 per month. Expected timescale for that is 4-6 months...

Ch1979

Thanks UTROI85 for the advice. Hope the above will suffice
Am learning to roll cigs (hence allowance for proper fags in the budget til I can make one that isn't tight or wonky)!

utroi85

Comments in red

1569 income
Rent/mortgage 405
Energy 50 - is this everything gas / electric / water
Council tax 71 - per month ? Where do you live, a palace ? - have you got your 25% discount off them ?
Tv 12
Car tax 11
Income protection 12 - what's this ?
Cat insurance 12
Home insurance 8
Sky 33 (cancelling) can watch parents sky go - are you under contract ? They may not let you off the whole lot does depend who you speak to on the day, I have managed to get them to drop the package to basic when I wasn't in a position to have such luxuries.
Mobile & iPad 42 (cancelling iPad Feb) 21
Contact lenses 12 (cancelling) - you do have glasses to wear instead ?
Boiler cover 9
Emergency cover 6
Bank package (phone,car breakdown,travel, overdraft rate:have used all) 16 - someone will have something to say about paying for a bank
Current interest charges £24 (will be 0.00)
Groceries 200 (new budget 100) - shop at Lidl / Aldi, plan carefully you could have this down to £80 per month
Cat food,litter,flea etc 40 - non branded litter ?
Cigs 160 (now 80) - do the roll ups, get 50g packs of the cheap stuff and extra slim filters, that will be down to £68 per month (unless you want some of this vape craze)
Household & personal care 70 (new budget 40)
Petrol 40
Emergency 10 (will be returned to account if not spent)
Treats:25
which include the following
Clothing
Art and craft items
Hot drinks from Griggs etc - nope - make coffee at home take it with you
Nights out - there will be protest about this
Haircut
Non essential beauty or household items - factor this into your food shopping as you say non-essential
Alcohol - only really counts if at home, certainly not at a pub / bar
Takeaways - nope

Seems tough I know, I'm certainly not in the same situation but certain luxuries have to be foregone.
Obviously you have the realisation (or the lightbulb moment as it's known as) that this needs to be sorted.

I had a lot of success with spread betting

You may have in the past but you are still in a bit of a pickle - don't be tempted do expose yourself to potential loss whilst you're trying to get yourself out of the red.

utroi85

Did you forget car insurance or is that paid / on one of the credit cards ?

Ch1979

Brilliant thank you
Martin said something interesting about imperfect systems on his show and how we have to know ourselves.
I spend money thoughtlessly but my needs and loves are actually quite simple but I seem to forget that! Trying to be completely frugal has and will fail (for me). I spent a good 12 months trialling being perfect with money before I devised my system which enabled me to pay off a large debt 7years ago, and it worked for a good few years until I was naughty again.
For me, it's prioritising what I need and what I love in that order. To me, cutting out all of what I love is akin to a 500 calorie diet: it has no longevity nor does it deal psychologically with the true problem and the weight will go back on when I can't keep up with it. It has to be something which I can take forward with me, the treat factor is very important in that it forces me to decide whether I truly value that item or experience as I don't do that now. . Most of the time I didnt use it more than buying a canvas, a lipstick or saving for a night out with friends.

BUT you are right there is definitely room to change my budget

Sorry- Plus water 24!
Council tax that's with the 25% discount and over 12 months. And that's only band b! Banded in 2005.
Income protection in lieu of life insurance for mortgage and bills
Sky: it was something I was considering anyway and I just watch stuff that's available on free view mostly or can get Boyf to record for me. Can watch sky go on my iPad.
Contacts: yes I have glasses :-)
Bank package: i worked out the equivalent costs me 12 more and I have tested all services..? I'll investigate alternatives. Have nobbled 2 phones in the last year and need both car and phone for work
Cat: I use the stuff you get in Wilkos for 2 quid. Food is a battle but it seems happy on the 44 packs of Felix for 10/12 quid. I also go half with my sister on flea stuff
Cigs: that's the plan when my sausage fingers learn to roll
Hot drinks from Greggs: usually one every Saturday and sit with sis for a bit and natter whilst sorting out bank money. otherwise no drinks.
Nights out: These will happen and I will choose wisely. We for years all do a kitty at the start of the night and agree an amount everyone can manage. 6-7 per year max.
Haircut: I ponytail cut it myself and have 2 cuts per year and make the hairdresser cry
Non essential household and personal: True!
Alcohol: I don't drink at home but will get a bottle if going round people's houses
Spread betting: you are right, it needs outlay and I don't have it

My budget is generous as I haven't tested it, I am aware that the last time I tried it was 2010 and I could do a grocery, cat and house shop for under £20. We are due to get an aldi so yippee! Going to scout out the pound shops and work out what I can buy in bulk. I also can offer my services out as a dinner guest at mums and sisters for 2 nights so need to factor that in.
I'm hoping to at least 1/4 what I have budgeted

Ch1979

Shall post soa tomorrow! (Fail)
Car insurance 27

Sanctioned_Parts_List

Looks like you've caught it very early and have some sensible plans in place already.

I spend money thoughtlessly

Me too. In terms of sticking to it, I find that the act of tracking my spending reduces my spending - partly out of hassle factor and partly because then I'm absolutely aware of whether the money I appear to have in my account is really mine or not.

So keep a notebook, spreadsheet or software package up to date with everything you plan to spend and everything you actually spend. It's a faff, but it works; I couldn't be without my software package of choice now.

Just to add, though, that I think you've picked up a couple of waste-o'-cash insurance policies along the way.

Boiler cover - £9/month (£108/y). I've found that even without regular servicing a boiler breaks down about once every 3 - 5 years and costs about £150 to have repaired professionally. In that time you've spent £324 - £540 on insurance.

Emergency cover - £6/month. What is this and what does it offer that having your own pot of money doesn't?

Ch1979

Hello! Yes I think you get what I mean, it's the pure thoughtfulness behind my spending which is the issue. Without my system I have lost the joy of buying and making things.
For example I don't have a purse and need one. I could buy it, but I have made a wallet out of a handbag which I was going to recycle. So now I have a lovely purse with sections...I enjoyed it and saved money!

Boiler cover- it cost me £460 to repair my boiler 3 weeks ago (most parts are expensive on this one). I took it out 2 weeks ago and had a service included. The 460 quid was the cherry on my debt cake :-(. The gas engineer who works at our company advised me that for the parts alone it is worth having this cover but he may be wrong.

Emergency cover. According to the terms it will provide emergency cover for plumbing and emergency leaks, internal electric failure or fault, lost keys and lock failure. That said, I work in a maintenance department and know how to turn off all services.....?! I'm a huge klutz and I think I may worry a bit too much about insurance? My sister, mum and Boyf all live within 5 miles away and I tend to repair things myself (recently my toilet broke and I had the cistern off and changed the ciphon, I've changed the door seal on the washing machine and repaired a leak on the rising main so a reasonably handy woman)
I have a phone app connected to all of my accounts. Going to trial cash before opening a basic card account to put a weekly standing order into from my main bank account.