Time to face the music.....LBM

dfw2k7

OK - Where to begin...

I have been reading the money saving forums for a while, and generally use it for inspiration, as cliche as that now sounds, with every other poster saying the same thing, however, it doesnt stop it from being the truth.

I had a LBM about 3 months ago, when I realised one of our cars is on its way out and probably will need replacing sooner rather than later - so my challenge, is to reduce my monthly outgoings by as much as possible and get my outstanding debts paid off - which is what brings me to the DFW forum.

Here is my sad state of affairs:

Monthly Incomings £1784.44

Monthly Payments:

Mortgage 631.00
TV Licence 11.61
Gym Membership 27.00
Football 28.00
My Churchill Car Insurance 44.95
Wife's Nationwide Car Insurance 32.73
MY Virgin Mobile 10.00
Wifes Virgin Mobile 10.00
NTL 40.00
Council Tax 91.00
Water 30.00
Food 120
Electric 31
Gas 80

I havent even mentioned petrol per month.

Insurances

AA Buildings Insurance 16.58
AA Contents 17.57
Income Protection 13.07
Legal General life assurance 33.38

Debts

1st &More Credit Card 45.00 per month with 1464.63 outstanding (on a life of balance deal)
2nd &More Credit Card 45.00 per month with 1400 outstanding (on a life of balance deal)
Sainsburys Loan 158.43 per month @ 6.7% with £3755.97 outstanding (dont think this allows over payments sadly)

There it is - horrible to see in black and white, and I am desperate to get rid of at least one of the cards this year - but with Christmas coming up, I cant see it being done.

A little background on our family to take into consideration - we are mid twenties couple with a four year old and a 4 month old. wife is on Maternity pay until March (included in total Incomings at the top), so until then, are on a tight budget (and beyond to be honest).

What stands out as something we can do to improve our situation? We are both so sick and tired of having nothing from a purely materialistic point of view - of course we have our's and our kids health and a wonderful family around us which we are eternally grateful, however we just want rid of the debt, so that what little spare money we do have can be put into providing our children with the life we want to give them growing up.

Surely there must be some cheaper alternatives to some of the insurances I am paying, house, contents etc?

I just need guidance on how to start, do I pay of the CC's, the loan? do I move my loan to someone else? Am I paying too much for Gas/Electricity or anything else?

Sadly, I fear that I have got everything too cut back and there is no room to move.

Help?!?

I have much respect and appreciation for the guys that give up their time both reading and answering mine and others posts on these forums. Thank you.

poodlehorse

I realise both you and your wife work but do you really need both cars? Assuming yes then the thing that jumps out is the gym AND the football. I would say knock one on the head, two kids and a job do you really have the time to do both anyway? Your car insurance looks quite pricey but there may be a good reason for that - big car? previous claims? As you say there is no petrol in that list and you have £267.12 left over if my maths is right. So what petrol would you use and what about things like birthdays etc. Your wife goes back to work in MArch, how much will your income be then? Is that total income inclusive of child benefit and WTC etc? If your wife works what about the cost of childcare? I realise that might not be an issue right now but it needs to be in the bigger plan for next March. For once I think your food bill is good for 4 (well three really at the moment) normally that is the thing that people spend too much on. HAve you tried things like Quidco etc for daily clicks and other ways of getting freebies? And the other option is sell a load of stuff on Ebay or wherever.

Shineyhappy

Your car insurances do seem a bit high. When puchasing insurance or seeing if your gas/electric is the cheapest go through Quidco and see if you can grab some cash back. Your gas does seem a bit steep so try going to Uswitch (via Quidco) and see if you can get it cheaper.

Have a nosey at some of the challenges on here (especially the Olympic Challenges first few pages) and those will give you some ideas on raising extra funds.

Have you ebayed things you dont want?

Also check www.entitledto.co.uk to see if you are getting the right benefits.

Good luck sorting things out and keep posting on here to stay on the wagon and to keep you on track.

Wannabesaver_4

Welldone for posting on here - its the first step and a big one so good for you! I am not amazing at this but i will start the ball rolling for you. :rotfl:


Here is my sad state of affairs:

Monthly Incomings £1784.44

Monthly Payments:

Mortgage 631.00
TV Licence 11.61
Gym Membership 27.00 - Can you get rid of this - not essential
Football 28.00 - again not essential - this should go
My Churchill Car Insurance 44.95 - when is this up for renewal? try getting insurance through quidco or using confused.com for cheaper options
Wife's Nationwide Car Insurance 32.73 - same as above
MY Virgin Mobile 10.00
Wifes Virgin Mobile 10.00
NTL 40.00 - this is SO much, think about cancelling and getting freeview or if you cant live without, swap to Sky (£21 a month for TV, phone and broadband)
Council Tax 91.00
Water 30.00
Food 120
Electric 31
Gas 80 - this seems high - is there a reason i.e arrears?

I havent even mentioned petrol per month.

Insurances -

AA Buildings Insurance 16.58
AA Contents 17.57
Income Protection 13.07
Legal General life assurance 33.38 - you may be able to rduce all these using quidco or confused.com

Debts

1st &More Credit Card 45.00 per month with 1464.63 outstanding (on a life of balance deal)
2nd &More Credit Card 45.00 per month with 1400 outstanding (on a life of balance deal)
Sainsburys Loan 158.43 per month @ 6.7% with £3755.97 outstanding (dont think this allows over payments sadly

Just taking into account your ntl, football and gym you coudl save £95 a month :j by getting rid of these, thats £1140 a year :j which would go a long way to getting rid of one of the cards - always helps to look at things that way.

By my calculations you should have £269 remaining after servicing your debts (maths is not a strong point so dont quote me) and outgoings above. BUT you havent listed things like prescriptions, haircuts, clothing, birthdays etc. You can visit whatsthecost.com which has calcualtors to show you how fast you can pay your debts off by paying a little more a month. Quite motivating!

I think the best thing about your SOA is that there are savings that can be made so dont be too down about it all.

You say about Christmas costing but it doesnt have to. Why dont you make an agreement just to buy for the kids in the family this year, or have the kids make cards and wrapping paper. Bake biscuits and make fudge and make hampers from the kids. People will love it! Last year i bought 2 plastic moulds off the internet and make chocolates for everyone - very popular. There are a few threads on here about Chritsmas so worth taking a look on them!

Others will be along to help out as well

Good Luck

warburtonrichard

Hi, and welcome!
My 2p's worth

You've done really well to get your interest payments to a minimum; your highest debt being on 6.7% is brilliant, assuming your LOB deals are about the same or just less, most of what you pay will come off the debt rather than be swallowed in interest. DON'T be tempted to spend on the cards, or the purchases will get "trapped" behind the balance transfer.

£80 gas a month seems very high to me; As others have said, use Uswitch to do the comparison and click through either to Uswitch or the cheapest site if they have a direct link from quidco that gives more cashback.

£120 for food sounds low to me (although doable) - do you really spend this, or does more money come out of your remaining funds on "stuff" from the shops?

If you are mathematically minded, patient, and calm, you could see what you can make on the side matched betting (I've made 2.5k so far since Easter). Alternatively, Ebay anything not nailed down. There is a matched betting board on this site with lots of introductory guides, but it does require patience, calm, and a head for numbers.

I don't think you should change anything debt-wise, tackle your cards one at a time to clear them down to zero and get rid, then if you can't overpay your loan, make your "overpayments" into a savings account until you can settle the loan in one hit. Even if you manage it a few months early, you'll have done well.

Good luck

Warby

tyllwyd

In the total incomings, have you included your Child Benefit and Child Tax Credit?

dfw2k7

Hi

Firstly, thanks for all the people that have replied and read my post.

@ PoodleHorse - You are right about the gym and football - I think I am about 5 months into a 12 month contract, unsure of penalty incurred if I attempt to cancel early - It is a council run gym, so surely they wouldnt come down hard on me! As for football, I play for a team, and its my absolute love and passion, I really dont think I could live without it.

Reason the car insurances are high is because 1) I have a high category car, 2) wife has only just started her own policy - both renewed in March/April, so nothing can be done on that front for a while..

When wifey goes back to work, income will only jump by around £200, the totals do not include WTC and Child Benefit, they get paid into a seperate account and spent on clothes etc for kids. When wife goes back to work, kids will be a) at school b) with her mother, so we shouldnt incur any child care costs hopefully.

Thanks for the quidco mention, I really need to look into that, heard of it, not too sure what its benefits are, or what it does exactly! Thx for your reply

@ Shineyhappy - thanks for the links and the advice, again with the quidco - I really do need to learn what it is/does!!

@ Wannabesaver

Gym = I am in a 12 month contract, unsure if I can escape without penalty
Football = This isnt going to matches or anything, this is playing once a week in a team, a big part of my social life, and my substiture for others beer/fags (which i do not partake in either)
Car Insurances=As above, policy renewals in Mar/Apr 08
NTL = Thanks for this, I think you are right it needs to be addressed, that will be next on my hit list.
Gas=Not arrears, on a gas metre, and scared to go to monthly incase we are in arrears, Gas Metre was installed when we bought the house and we have never changed it.

Again, another person who mentions quidco - will look into it, really unsure what it is. Thanks for teh advice though, much appreciated!! Thanks for all the other tips As for haircuts, birthdays etc - we try and do birthdays at as low cost as possible using hot uk deals when possible, and I shave my hair as to not incur a haircut cost Things are that tight !!

@Warburtonrichard = Thanks for the advice, Will be looking into matched betting, albeit on a small scale at first, then will also give ebay a blast and see what I can do there!! thanks again

@tyllwyd - No CTC or CB included as we tend to put that away to spend soley on the childrens clothes and activities each month

thanks to all, it really is appreciated. Seems my action points from this are as follows at the moment:

1)find out more about quidco
2)Look into getting rid of NTL
3)Look into what penalty I will face breaking a 12 month gym membership
4)Begin on matched betting

Cant wait to get started in this debt reducing game

MissKJ

DFW2K7, there are gals here as well as guys you know? Did you know you can save money on car insurance by insuring them both on the same company. Direct line offer 10% I think.

There are many folks on here far worse off than you, and still managing to get rid of debt by learning some good management of money. Don't forget that as long as you don't add to your debts, you will get pay rises, benefit rises etc to help. It will get easier.

My advice is to discuss regularly with your wife, be clear about your mutual goals, and find solutions together. For example, could she sell avon while she isn't in work? She might enjoy taking baby for a walk while she delivers. She can also get discount on her own nice bits and pieces. Not everyones cup of tea, but who knows? Boosting your income is the best thing you could do. Also switch to cheaper suppliers.

tyllwyd

My feeling is that by not including the child tax credit and child benefit in your budget you are making it unbalanced in favour of the children - child benefit alone is about £120 per month for two children, and you surely don't spend all of that every month just on their clothes and activities? If it was me, I'd do a budget including that money plus a realistic amount for chilren's expenses - then you can make a decision as to what is the best thing to do with the extra money, whether to pay off the debts (because the interest on those debts is coming out of the money you have to spend as a family as a whole) or to save it, whether in the children's names or in your names to build up a cushion against an unforseen emergency in the future. Otherwise, there is a danger of frittering it away.

I can see why you might regard it as the children's money, but some of it is designed to help support the family as a whole because obviously the family income drops while there is someone at home looking after young children.

Adrasteia01

I wouldn't see much point in putting it into a separate bank account for the children - even if you need it you wouldn't be inclined to take it out because you'd see it as theirs, even though you're raising them and paying for their clothes/food/etc. I'd say keep it handy, where you can use it, or pay it off the debts.

Also you could try pigsback.com (or is it co.uk there?) to earn some vouchers towards Christmas. They have quizzes, clicks, competitions and other ways of earning points that you turn into vouchers for various places.

Tamara

chevalier

Hi there
Whilst your wife is at home could she do daily clicks to earn some extra money. You could both set up accounts and she could do both? Here are some of the ones I use. It soon adds up.

Also don't forget to look on www.freecycle.org for baby bits/clothes. All you have to do is go and pick them up.

best of luck
chev

www.lightspeedpanel.com - this is a survey site, where you get points that turn into vouchers (you choose). May not help with the cash flow, but the vouchers could be saved towards birthday/xmas or given as presents.

www.ciao.co.uk - survey site that gives money. A bit fits and starts i.e. no surveys for a couple of weeks, then three or four the same day.

www.yougov.com - again paid surveys. However takes a while to get to the minimum payout level

www.mytns.com - again this is a survey site, but it pays you in points that convert into Nectar points at Sainsbury’s.

www.pigsback.co.uk - this is a points site, i.e. they give you points for buying things via their site. BUT you also get points for signing up for news letters (some of which are even interesting!), and also for clicking on adverts with pink borders. I have spent NOTHING with them but got a £10 voucher through this week (only been registered since January). There is also a thread in the freebies section, of https://www.moneysavingexpert.com that gives you all the daily answers to the competitions so you can have a better chance of winning on them. I won £20 of points recently on the daily quizzes so a nice boost to the Christmas fund.

www.mutualpoints.com - another points for clicks site. You can also buy things via their site and get points too. For a long time, I just clicked the links in the emails they send you, and that gets you 5 points. At 3000 points you get £20 I think. You can do searches via their site and that gets you points too.

www.quidco.com - this is a cash back site, so very good, for checking if any potential new insurers (i.e. if you have checked your contents insurance say and found a new provider), are offering cash back. E.g. Lloyds was offering £120 cash back on new policies at one point (the offers do change). You can also get small amounts of cash again for doing searches via their site. You can earn 52p a day by doing this. Every little helps.

www.greasypalm.co.uk - another cash back site, where you can do searches and get small amounts of money. But it all adds up. I think you can get about 50p a day on there for nothing. Minimum payout is £20 I think, but you can sign up to survey sites via there, and get extra money that way for nothing.

www.topcashback.co.uk - another site where you can do daily clicks to get money for nowt.

www.britishrewards.co.uk - same as topcashback, daily clicks to do searches for pennies a time.