The Start of my debt free wannabe my statement of affairs

klw7me

Here is my statement of affairs.

Things I have already realised:

1. I need to cut the amount we spend on food each month.
2. I need to not have a summer holiday next summer.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 2,386.50
Rental Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 870.00

Monthly Expense Details

In Your Home

Mobile phones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
TV licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.12
Virgin Media. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.00
Cleaning products/Cleaner . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.00
Household maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00
Council tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160.00
Overdraft cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.00
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200.00
Food and household shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 350.00

Motoring & Public Transport

Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250.00
Car tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.00
Car insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.33
Car maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Little One's Car Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 60.00

Debt Repayments

Credit card repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150.00
Hire purchase repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 110.00
Personal loan repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 110.00
Car loan repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200.00

Savings & Investments

Cash ISAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00

Entertainment

Family days out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00

Clothes, Health & Beauty

Work clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.67

Big One-Offs

Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.67
Summer holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83.33
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.67

Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,256.50


Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,324.79

Muttipops

The Virgin media one is a biggie and also the cleaner. I assume the fuel is for a long commute; could you car share?
Somethings one has to let go of for a while, just until the books look a bit healthier.
Maybe look at the cleaning as exercise!

klw7me

Thanks, I recently reduced the Virgin Media taking off the Sports Channels, which unfortunately locked me into another 12 months with them on this contract unless I upgrade, which I am not going to do, but it did reduce the price by £35 a month which helped.

Yeah the cleaner is expensive, this also includes cleaning products, but otherwise is doesn't get done. I am teacher so only have her in term time, it does mean I only pay for it 37 weeks of the year, which does save approx £400 a year, I am just not very good at using that money when it comes for something productive.

enthusiasticsaver

How much debt do you have and do the payments cover at least the interest? Your mortgage is high. Is this for your main residence and presumably a BTL?

As you are in deficit each month you need to look at reducing the groceries, holiday, cleaner, Christmas and virgin media.

phizzimum

How many are you feeding klw7me?

Does the "little one's car insurance" mean you're paying for your teenager's car insurance? If they realised that you dont have enough income to cover your expenses would they do the cleaning in return for having their car insured?

How much is the overdraft? Getting that paid off would free up a big chunk

klw7me

Thanks for the responses

I have had financial problems in the past due to an irresponsible ex and not taking enough responsibility for the finances. I ended up with two defaults from that time, they are now both paid off and one came off my file this month, the other doesn't come off until December 2017, but its getting closer all the time, The debts from that time are all now paid off with the exception of the overdraft and credit card. This means things such as getting a 0% credit card isn't as easy and when you do the limit is not very high. I have just managed to get one and moved £1500 off of my credit card which as my capital one card is a horrendous interest rate gives me 20 months to pay as much as I can off of that.

The rental income is what my partner pays to help pay the big mortgage.

The little one's car insurance is only being paid while they are in their final year of University, it is being paid back when they start working.

The food is a worse case scenario and takeaways so they are easier to cut out, that is my first place to tackle.

Debts are as follows

Capital One Credit Card £3000 minimum payment is about £80 but I had been paying £115 a month
0% HSBC Credit Card £1387 minimum payment is about £35 a month, which I am paying as trying to pay off the capital one card.
Loan balance of £3228 costs just under £108 a month
Overdraft is a horrendous £3250 which with interest costs a maximum of £45 some months it's nearer to £40 depending on how much I have spent that month.
I have some furniture (£1275 worth) on interest-free credit which costs £107 a month, that finishes next September.
TOTAL DEBT = £12,140 (excluding mortgage)

The silver lining to the cloud I guess is the following
In May I will stop paying the little one's insurance +£60 a month
September 2017 I won't be paying the furniture +£107 a month
In December 2017 my other default comes off which will hopefully mean when the 20 Months are up on my 0% Credit Card, which is February 2018, I may be able to get another one with a higher limit so I can close the Captial One Card with its 30.34% interest. which is awful and set about paying that off.

Muttipops

Hi, do you have a house with a spare bedroom? Could you put up with a lodger for a while. I was thinking that as you are a teacher, maybe another teacher at your school would be looking for accommodation. You can earn up to £7,500 per year, tax free by being a resident landlord. And pretty much all that rent could go to paying off the debts. Desperate times, desperate measures!
I wish I could come up with some super ace solution to your debts, but it looks like you doing things already. I think that one of the old lags on here will turn up soon with an intelligent way of bringing down that Capital One Card balance asap.
I would try and do the cleaning yourselves for a while, be very disciplined about it. That £115 would really help out the debt situation

louby40

Hi I'm a teacher and also used to pay for a cleaner (£40 every 2 weeks) I loved it, coming home every Friday to a sparkly house, but I just couldn't justify it anymore, £80 a month could be put to something better.

So now I just do it myself, Sunday morning I just go for it, my OH and I divide it up and we get it done in 3 hours or so.

klw7me

I have decided on the following tweaks to my finances as a starting point.

Reduce spending on food by £100 a month
Reduce money spend in Christmas and birthdays by half saving £40 a month
Reduce money spent on a summer holiday by half saving £40 a month

This will reduce the amount I spend by £180 a month although having looked very closely at everything I spend money on this will leave me with £80 extra to put towards my debts.

I have looked at snowballing starting with my capital one card and if I can do this properly I could have got both credit cards down to below £2000 by the time my 0% one ends in February 2018 so should hopefully get that on another 0% card. Which can leave me to set about reducing the overdraft. This makes me feel loads better about this being a real possibility.

According to the snowballing calculator I have used even without putting more money towards paying off my debts when the furniture and loan finish I should be unsecured debt free by July 2020.

I don't have a spare room unfortunately living in Hertfordshire house prices are very expensive.

My partner is doing the same and has a pay off date of August 2020 so it's very exciting that's it isn't too far away

C.M.

You might be in luck regarding virgin media - they are in the process of sending out letters about price increases to come in November.

Part of the letter will advise that of you are not happy with the increase you will be entitled to cancel your package at no cost...you can use this as an opportunity to reduce your package further