Clearing the Loans and Buying a House 22 August 2016 at 1:02PM in Debt free diaries 4 replies 548 views

PayOffTheLoans

I've been a long time browser on here but rarely post. I've decided to start this diary in the aim to start saving for my first house whilst clearing 2 fairly substantial loans

I work full time in a well paid but stressful job meaning I like my luxuries. I know I spend far too much on eating out and food and I am hoping this diary will make me think a bit more about my purchases. I currently live in a shared flat with one other person

My first loan (natwest) dates from my student years when my dad who was supporting me lost his job. At the time it was great because I did have to pay it back until I graduated but now I'm stuck with a high interest rate and no overpayments for a long time!

My more recent loan was to buy a new car. Maybe I should have gone for a cheaper option but after breaking down twice in one week I wanted something reliable. I commute 20miles to and from work and from next year will need a car for work so reliability and low costs over the next 3 years are important to me

I don't scrimp for every penny but I would like to buy a house in the next 2-3 years so have some serious loan-busting and saving to do in that time. I hope it's alright to start my diary here for those purposes

Thanks for reading

PayOffTheLoans

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2400
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2400

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 18
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 50
Petrol/diesel........................... 90
Road tax................................ 0
Car Insurance........................... 42
Car maintenance (including MOT)......... 18
Car parking............................. 25
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 135
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 129
Presents (birthday, christmas etc)...... 25
Haircuts................................ 10
Entertainment........................... 220
Holiday................................. 100
Emergency fund.......................... 200
Total monthly expenses.................. 1874


Assets
Cash.................................... 794
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 12000
Other assets............................ 0
Total Assets............................ 12794

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin Credit Card.............416.......25........0
Natwest Loan...................5672.68...144.3.....8.9
Nationwide Loan................11449.....218.5.....3.6
Total unsecured debts..........17537.68..387.8.....-


Monthly Budget Summary
Total monthly income.................... 2,400
Expenses (including HP & secured debts). 1,874
Available for debt repayments........... 526
Monthly UNsecured debt repayments....... 387.8
Amount left after debt repayments....... 138.2

Personal Balance Sheet Summary
Total assets (things you own)........... 12,794
Total HP & Secured debt................. -0
Total Unsecured debt.................... -17,537.68
Net Assets.............................. -4,743.68


A few notes

My rent includes all bills except TV licence which I pay for because I use iplayer online.
I don't have any contents insurance at the moment because I don't own anything expensive that isn't insure separately. I may need to rethink this.
Car parking is £1 a day at work, free at home
I have a service plan with my car for £18pm which includes all services for the next 3 years. I pay no road tax and am hoping I will not have any repairs as the car was brand new in May
I have included my gym membership and once a week training session in my health section. This is likely to go at some point but sticking with it for the next few weeks. It's helped me lose nearly 2stone and keeps my sanity. I'm not sure I'd go if I didn't see the trainer

I have been through the last 3 months of statements for food and entertainment. My groceries bill is ridiculous (it does include toiletries). My boyfriend also stays 3/4 nights a week and at the moment I tend to pay for most of our food although that should change in the next month

My entertainment is even worse. I only excuse is that I had a week off in June where I didn't go away so I could try argue I spent more than usual

PayOffTheLoans

So my current plan at the moment is to add to my savings until I reach £1200 and transfer this into a help to buy ISA. Then I will continue with £200 into that and any spare into a savings account to create a small emergency fund (I have a 5% interest account with nationwide).

I am not sure if it is worth trying to save and pay the balance of the natwest loan in one lump sum but I don't know how much this would save.

My snowball suggests that I can clear the nationwide loan in 2 years with overpaying by £50pcm and just paying the minimum on my credit card and the basic natwest loan payment every month. I could then use that spare £260pcm to put towards my deposit. This would mean after 3 years I could have paid off my nationwide loan and credit card and have £12720 towards a house

If I cut my grocery bill and entertainment by just £50 I can clear nationwide in 20 months giving me and extra £1000 in the house saving fund! That should be easily doable. If I push myself and find another £50 a month I can clear the nationwide in just 18months!

PayOffTheLoans

Few spend yesterday and today. I'm on night shifts so I needed to buy food for that. I stay away from home during nights with minimal kitchen facilities which is frustrating. I should have been more organised but I haven't been!

£14.45 yesterday
£15 today (included a pack of new underwear as I'm seriously in need!)

PayOffTheLoans

Pay day today!

Transferred what was left in my current account as an overpayment on my loan on top of another £100 extra as I got paid for some extra shifts this month. So that is a £159.89 overpayment on top of my usual £218pcm

Stuck the rest of my overtime pay in my savings account (paying 5% currently). I have a direct debit of £200 and can pay in a maximum of £500 a month so I transferred £300 so I'm paying the full in today. My savings is now at £1000!

My boyfriend also paid me back for a holiday a few weeks ago. That has gone in an easy access savings account to form my holiday fund. Planning a trip to New York in November but will be saving instead of using the credit card!