What am I doing wrong?

at1977

Hi everyone

I am after some advice from people in the know. I just want to know why I can't get rid of debt. I read an article that you should have no debt by the time you are 40 which I turn next year.

My salary is 30K p.a. but I have the following debts:

Lloyds Avios Card - 1800 (repay 100 per month)
B/card platinum - 1250 (repay 50 per month)
Halifax CC - 900 (repay 50 per month)
HSBC CC - 2900 (repay 100 per month)

All cards are 0% for over 18 months still (HSBC for another 30 months).

I also have 2 unsecured loans - Nationwide 10131.73 (27 months left) @ 12.8% (repay 367.89 per month) and HSBC 10K (49 months left) @ 15.9% (repay 249.87 per month)

Monthly income is 1600 per month plus 400 from piano lessons I give. Mortgage is 280 per month.

I feel like I just am spinning around from one month to the next - obviously the loans are being paid down but is there anyway to be able to rid of all of this debt in a quicker, more painless way. What am I missing?

Grateful for any thoughts.

fatbelly

I see people of all ages with debt - from 18 to 80. There's no 'maximum age'.

If we're going to help, we're going to need to see the whole picture. Could you prepare, and post a statement of affairs (link to calculator)?

at1977

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................ 1600
Partners monthly income after tax....... 3000
Benefits................................ 0
Other income............................ 400
Total monthly income.................... 5000

Monthly Expense Details
Mortgage................................ 280
Secured/HP loan repayments.............. 0
Rent.................................... 280
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 30
Gas..................................... 40
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 44
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 33
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 200
Road tax................................ 10
Car Insurance........................... 10
Car maintenance (including MOT)......... 5
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1302


Assets
Cash.................................... 0
House value (Gross)..................... 451552
Shares and bonds........................ 0
Car(s).................................. 3500
Other assets............................ 0
Total Assets............................ 455052


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 45000....(280)......0
Total secured & HP debts...... 45000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
LLOYDS CC......................1800......50........0
BCARD PLATINUM.................1250......50........0
HALIFAX........................900.......50........0
HSBC LOAN......................10000.....249.......16.9
NATIONWIDE LOAN ...............10131.7...367.......12.8
HSBC CREDIT ...................2900......100.......0
Total unsecured debts..........26981.7...866.......-


Monthly Budget Summary
Total monthly income.................... 5,000
Expenses (including HP & secured debts). 1,302
Available for debt repayments........... 3,698
Monthly UNsecured debt repayments....... 866
Amount left after debt repayments....... 2,832

Personal Balance Sheet Summary
Total assets (things you own)........... 455,052
Total HP & Secured debt................. -45,000
Total Unsecured debt.................... -26,981.7
Net Assets.............................. 383,070.3

barbarawright

If this SOA is accurate, you should be able to repay your debts in a couple of months. So I'm guessing it's not accurate. Do a childless couple with a combined income of £5000 a month and a relatively small mortgage really not pay one single penny on entertainment?

redpete

There is no point in going through individual items in the SOA when it says you have 2800 a month available to pay off debt.

Also shows you would very nearly pay off the CCs before you start paying interest on them.

We can't be seeing the whole story, you've clearly been living beyond your means, maybe you still are.

But do you really not have a TV, or buy clothes, or go out, or get your hair cut, or insure anything (apart from the car). I guess you've included your partner's income but not the things in your joint budget that they pay for.

YORKSHIRELASS

Hi and welcome

It sounds to me like you dont really know where your money goes which is a common problem. You know you have £5k a month coming in so you assume that you can afford a certain lifestyle. I have been there.

What you need to do is start going through your bank statements and keep a spending diary so you know where every penny goes. You can only plan for the future if you know where you are now. Oh and for me seeing it all in black and white was the one thing that made me stop spending.

Good luck.

at1977

Hi everyone

Thanks for all your comments. Some hostility and suspicion. To try and set the record straight: my partner pays TV licence , add 50 per month for a meal out or trip to the cinema , my flex plus account covers insurance for car and phone , partner pays home insurance and add say 200 a year for clothes. I live quite frugally (or try to) and dint know all the figures here. No misleading intended.

Maybe I should just wait 2 years til my card debt and nationwide loan will be paid off. And things will start to get easier....

selloptape

Sorry, I'm confused (easily done ) - are the expenses and debts on the SOA paid jointly between you and partner, from both wages, or just by yourself from your wages? X

at1977

Shared. Hence the earlier mix up

andyfromotley

Hi at,
i'm still confused do the expenses represent your half of the bills, or the total bills. Are the debts considered yours to pay of or are you and your partners?

Either way you have tons of money coming in and will be able to kill these debts easily.

You need to buget budget budget!! its easy. Work out your income for the coming month. Put aside enough for all of your bills and expenses. Put every other single penny towards your debt repayment. You are simply NOT allowed to overspend on your expenses. In really short order your debts will dissappear.

You can do this with a pen and paper, a spread sheet or a fancy budgeting program like YNAB (which i highly recommend). Working out a budget and then sticking to it will revolutionise your finances.

redpete

No hostility, just seeking clarification on a confusing SOA and suggesting you need to be clear on your own situation to help you deal with the root problems.