Starting out

jameswright2

Hi,

I have quite a bit of debt that i have started to address but would like to see if I am doing the right thing the debts are between me and my partner, we have been clearing some of the cards and now we are fully interest free thanks to this website.

Family loan - £15000
Credit card 1 - £9500
Credit car 2 - £1500
Credit card 3 - £7000
Store account - £200 ( this will be cleared this month.)
Car Finance - £180 a month for the next 2 years
Overdraft - £500
Overdraft 2 - £250

The family loan was to try and consolidate things but looking back I should of just switched the cards, I need to pay that back as soon as I can and pay the rest how would you approach it, I have about £600 free a month after everything, I have cut down on everything and we still never have any spare money., I am trying my best to get sorted, everything is update our credit scores are good and we have no defaults..

It is a mess and I really want to get this gone and never use cards again! I have no savings at all so sometimes when things have come up we have used cards, bad I know but sometimes I have had no choice.

any advice is greatly appreciated.

Jox

Have you tried the snowball calculator?

http://www.whatsthecost.com/snowball.aspx

You add in the debts and it tells you the best order to pay them off in.

Put your credit cards in the freezer and don't use them again!

Do a statement of affairs and others can advise you where you can save money in your day to day spending.

curlytop12

Hi and Welcome:)


my steps would be :


fill out an SOA, and post it up here


start a spending diary(daily) and find out where that £600 is going!


check you have the best deals on utilities /insurance /tv/broadband etc. cancel everything you don't need or benefit from.


Budget like mad, there are apps and tools all over the place you can choose from, or use envelopes, or piggy banks-real or virtual.


get rid of the ODs as they can be recalled at any time legally.


get an emergency fund going, so you don't rely on the credit cards (in fact with a £600 surplus, I'd cur them up now !)


good luck, you are on the way

MallyGirl

I would suggest building up an emergency fund first or you will never break the cycle of resorting to cards.

I would make a list of all the debts, with the date that the 0% expires and the standard rate that you will revert to against each one.
Then look at the list and make a plan for how to address them. You must pay the minimum to each debt or you will lose the 0% deal but after that target your money intelligently. Pay more to the one with the 0% expiring soonest (unless there is one slightly after it with a much higher standard rate - hence the term 'intelligently').
There is a snowball calculator that you can put all this info into and it will help to see the effect of different approaches, but it needs the facts to drive it.

curlytop12

http://www.stoozing.com/calculator/soa.php


here is the link for the SOA, format for MSE then we can gave a gander and maybe offer more advice

jameswright2

great thank you I will take a look.

jameswright2

Hi, I have eventually completed the SOA, some of the formatting didn't copy over well but It think everything is there is this ok.


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1946
Partners monthly income after tax....... 1586
Benefits................................ 82
Other income............................ 0
Total monthly income.................... 3614

Monthly Expense Details
Mortgage................................ 100
Secured/HP loan repayments.............. 189
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 114
Electricity............................. 31
Gas..................................... 31
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 0
Mobile phone............................ 80
TV Licence.............................. 12
Satellite/Cable TV...................... 52
Internet Services....................... 0
Groceries etc. ......................... 440
Clothing................................ 0
Petrol/diesel........................... 200
Road tax................................ 0
Car Insurance........................... 75
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 1100
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 9
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 60
Haircuts................................ 95
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2710


Assets
Cash.........................0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 109000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 106000...(100)......0.5
Hire Purchase (HP) debt ...... 6800.....(189)......8
Total secured & HP debts...... 112800....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclays ......................8000......188.......18.9
Very...........................320.......50........0
Overdraft......................200.......0.........0
Family loan ...................14000.....0.........0
Barclays.......................9800......209.......0
Overdraft......................300.......0.........0
Total unsecured debts..........32620.....447.......-


Monthly Budget Summary
Total monthly income.................... 3,614
Expenses (including HP & secured debts). 2,710
Available for debt repayments........... 904
Monthly UNsecured debt repayments....... 447
Amount left after debt repayments....... 457

Personal Balance Sheet Summary
Total assets (things you own)........... 109,000
Total HP & Secured debt................. -112,800
Total Unsecured debt.................... -32,620
Net Assets.............................. -36,420

System

Hi,

Well done for getting going. I'd really recommend starting a diary to keep yourself motivated.

A couple of comments on your SOA - your groceries is really high - you should be able to get this down by at least £100?
Mobile phone bills seem HUGE - are you locked in / can you switch package? We have 2 mobiles and our monthly bill is usually £20-25 for both (both sim free deals)
Nothing in car maintenance - you should be putting in something like £40 per car?
Can you ditch your TV package?
Are you getting childcare vouchers towards your childcare?
Haircuts might be another area you can save in. I probably spend £50 a year!
Add in something for your emergency fund - suggest £100 a month in the short term to get it up to £1K as quickly as possible.
Definitely hit your highest interest debts first.
Have you arranged to start paying back the family loan already? Not showing a payment against it as yet? If you don't need to, perhaps hit the smaller debts first and then when they are gone, start paying back the family debt?
Good luck with your journey.

MrsSave

jameswright2 wrote: »

Hi, I have eventually completed the SOA, some of the formatting didn't copy over well but It think everything is there is this ok.


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1946
Partners monthly income after tax....... 1586
Benefits................................ 82
Other income............................ 0
Total monthly income.................... 3614

Monthly Expense Details
Mortgage................................ 100
Secured/HP loan repayments.............. 189
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 114
Electricity............................. 31
Gas..................................... 31
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 0
Mobile phone............................ 80 Are you in contract with both phones? Can easily be reduced if not.
TV Licence.............................. 12
Satellite/Cable TV...................... 52 [COLOR="DarkOrchid)"]Is this sky? Do you watch the channels? If so, phone them up and tell them it's too expensive and you're struggling to pay so you want to discuss options. I got mine down from £22.50 to £11.25 for 12 months without any change to my package.[/COLOR]
Internet Services....................... 0
Groceries etc. ......................... 440 Do you meal plan and follow a shopping list? This can easily be knocked down do £300.
Clothing................................ 0
Petrol/diesel........................... 200
Road tax................................ 0
Car Insurance........................... 75
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 1100
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 9
Life assurance ......................... 0 Probably worth getting some
Other insurance......................... 0
Presents (birthday, christmas etc)...... 60 I've seen a lot worse. You could shave a little off, but if you're happy with it and you can make cutbacks elsewhere....
Haircuts................................ 95 this is a lot! Could you change hairdressers or go less often?
Entertainment........................... 20 is this an idealistic amount, or what you've actually been spending over the past few months? If it's what you have been spending, excellent!
Holiday................................. 0
Emergency fund.......................... 0Need something here
Total monthly expenses.................. 2710


Assets
Cash.........................0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 109000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 106000...(100)......0.5
Hire Purchase (HP) debt ...... 6800.....(189)......8
Total secured & HP debts...... 112800....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclays ......................8000......188.......18.9
Very...........................320.......50........0
Overdraft......................200.......0.........0
Family loan ...................14000.....0.........0
Barclays.......................9800......209.......0
Overdraft......................300.......0.........0
Total unsecured debts..........32620.....447.......-


Monthly Budget Summary
Total monthly income.................... 3,614
Expenses (including HP & secured debts). 2,710
Available for debt repayments........... 904
Monthly UNsecured debt repayments....... 447
Amount left after debt repayments....... 457

Personal Balance Sheet Summary
Total assets (things you own)........... 109,000
Total HP & Secured debt................. -112,800
Total Unsecured debt.................... -32,620
Net Assets.............................. -36,420

Comments in purple above. I've seen a lot worse! If I were you I'd get rid of the overdrafts to start (1-2 months) and then work on paying the rest back using the snowball calculator (I believe that has already been mentioned!).

cms-help

I know you need childcare but those costs are outrageous. Our nursery isn't cheap at £750 per month for a full-time child (0730 to 1730 Mon to Fri). Where do you live and what hours is that for? Nursery or childminder? How old is your child?

Your mortgage seems incredibly cheap at £100 per month? Is that right? Is that interest only?

Also you said you borrowed money from family to repay the cards? But you've now run the cards up again? So you've doubled your debt. How long did this take you to run the cards back up again? What was it spent on? I know these questions sound harsh but if they can't be answered then your SOA is idealistic rather than accurate.

jameswright2

Hi thanks for all the reply's, some great information my Mortgage is on base rate interest only yes the figure is correct it will be cheaper in a few months but obviously it is not being paid as its the interest we are paying.

I live in Manchester it is for Nursery full time as we both work and need early drop offs, 16 months old and yes we use childcare vouchers.

the money was borrowed to clear down cards we only had small amounts on the cards but then we had to move using the cards to renovate to make it livable, looking back it was a mistake which I am now trying to rectify.