Getting Debt-Free despite Struggling with MH problems

UncannyScot

Hi
have just caught up with your diary
Looking good
looking forward to further updates

wordswords

Last Year, A Review

Lower Total Amount of Debt

So, total amount of debt now:

£8000 - personal loan
£2400 - parental loan
£1550 - overdraft
= £11,950 total debt

This is down from £13,000 last November.

But.. Taking On More Debt

However, this is actually a bit of bad news because my original parental loan of £6000 got written off without me having to fully repay that, so in actuality I have been accumulating more debt quite a bit more debt than expected. A lot of this money was unexpected and unavoidable circumstances, such as changing jobs and my girlfriend moving over from Germany. To prevent this happening in the future, I need to start saving money for an emergency fund so I don't have to keep taking on more debt whenever an inevitable unexpected financial problem occurs.

However, Income Is Rising

On the plus side, my total income has gone up by £322 a month, to ~£3322 / month. This will allow me space to pay off debts better. This is also not taking into account bonuses from work, of which I expect at least £3000 after tax in May 2018 when I complete a full year at the new place. My monthly debt repayments have got down to £360 from £380 in November also.

And Personal Circumstances Got Better

Things have definitely got better in my life circumstances. We no longer have to have a lodger, which will make us far less stressed, my girlfriend has fully moved over from Germany to live in the house, and has started work, I've got a new job which I like a lot more, and we've fixed for 5 years on the house mortgage, meaning a lot more security there. I also have a new mobile phone which I paid for upfront without a contract, which means reduced total cost of ownership bills.

wordswords

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.................... 0

Monthly Income Details
Monthly income after tax................ 3130
Partners monthly income after tax....... 100
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3230

Monthly Expense Details
Mortgage................................ 508
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 80
Electricity............................. 39
Gas..................................... 36
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 0
Mobile phone............................ 23
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 50
Groceries etc. ......................... 300
Clothing................................ 100
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 300
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 50
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 10
Presents (birthday, christmas etc)...... 200
Haircuts................................ 15
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1984


Assets
Cash.................................... 0
House value (Gross)..................... 170000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 5000
Total Assets............................ 175000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 126000...(508)......2.22
Total secured & HP debts...... 126000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................8000......165.......10
Parental Loan..................2400......200.......0
Overdrafts.....................1550......0.........0
Total unsecured debts..........11950.....365.......-


Monthly Budget Summary
Total monthly income.................... 3,230
Expenses (including HP & secured debts). 1,984
Available for debt repayments........... 1,246
Monthly UNsecured debt repayments....... 365
Amount left after debt repayments....... 881

Personal Balance Sheet Summary
Total assets (things you own)........... 175,000
Total HP & Secured debt................. -126,000
Total Unsecured debt.................... -11,950
Net Assets.............................. 37,050

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

wordswords

Update:

* Job stress is getting to me. Hopefully it is just a temporary blip but work is SO demanding at the moment and I can't cope. I don't know if I should switch jobs.. I have a high income at the moment but at what cost? I think I want to transition out of this current career niche into something a bit more sustainable for the long term.

* My lodger has finally moved out, giving us a much needed calmer house, plus a spare room which we can finish doing up and then turn into a study.

* I have drummed up an emergency fund 'pot' of about £600. This is good news.

* My girlfriend is taking on more work slowly but surely. I don't want to overload her as she hasn't worked for health reasons for 15 years before becoming a self-employed cleaner, but it is nice to have her pay a bit more of the share of bills.

* I have a high income compared to many SOAs I see on this site and so should be able to make more debt repayments. I think I have a spending problem - I spend a lot on Amazon and it would be good to lock me out of my account somehow, or give the girlfriend the password and tell her to change it. Then I will be less compelled to make random purchases that I don't really need.

Sarastro

Hi Wordswords,

I stumbled on your thread looking for something else, but as I work in the Mental Health area, I couldn't stop myself reading it. I don't think you need financial advice - you are doing amazingly well reducing your overall debt and managing the various financial ups and downs you've experienced. Many people don't manage to do that so I wanted to say, "well done you".

Look after yourself, exercise is very good for you. And know that a complete stranger is thinking of you.

enthusiasticsaver

I think given your mental health state a high stress job is not good for you especially if it leads to uncontrolled spending which obviously it does. In the long run when the debt is cleared I do think you would benefit from a job with less pressure even if not as well paid.

Setting some safety nets in place is a good idea and I see you have already implemented one which is the emergency fund so you are not tempted to borrow when things get tough. Start to build that up.

If you know that Amazon spending is something you do when you feel stressed then give your cards to your girlfriend to look after and remove the numbers from the website.

Your monthly spending on presents is horrendously high. £200 per month is way above what most people put aside for presents especially if you have debt. Do you buy for a lot of people and why so much?

You need a plan to pay off that overdraft as well as the two loans.

If you can just continue as you were before falling off the wagon so to speak then this debt issue will go away and you can focus on building savings which will ease anxiety and give you a cushion should you need to change jobs.

wordswords

Thanks Sarastro, I really appreciate the encouragement.

wordswords

>I think given your mental health state a high stress job is not good for you especially if it leads to uncontrolled spending which obviously it does. In the long run when the debt is cleared I do think you would benefit from a job with less pressure even if not as well paid.

I agree, lower stress would be better.

>Setting some safety nets in place is a good idea and I see you have already implemented one which is the emergency fund so you are not tempted to borrow when things get tough. Start to build that up.

>If you know that Amazon spending is something you do when you feel stressed then give your cards to your girlfriend to look after and remove the numbers from the website.

>Your monthly spending on presents is horrendously high. £200 per month is way above what most people put aside for presents especially if you have debt. Do you buy for a lot of people and why so much?

This is mostly presents 'for myself'.. spending on myself to buy things for my music studio etc. It's not essential, but it does cheer me up and keep me motivated. Which is good. So I don't think it's 'horrendously high' given my income. If my income reduced, that would reduce too.

wordswords

Right well I have been meaning to update this thread with my current financial situation. There are both good and bad things.


Bad Things:
1) I'm in more debt..


Good Things:
1) My income has gone up
2) Work is much more stable and less stressful
3) Wife is starting a new job soon which will be a huge boost to our finances
4) I'm back at university in the evenings studying for a degree which could lead to a more interesting career
5) Mental health is better
6) House price has rocketed


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.................... 0

Monthly Income Details
Monthly income after tax................ 3100
Partners monthly income after tax....... 700
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3800

Monthly Expense Details
Mortgage................................ 508
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 40
Gas..................................... 50
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 50
Mobile phone............................ 30
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 100
Groceries etc. ......................... 270
Clothing................................ 70
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 300
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 50
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 200
Haircuts................................ 20
Entertainment........................... 300
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2150


Assets
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 210000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 123000...(508)......0
Total secured & HP debts...... 123000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................6424......160.......0
Boiler Finance.................2035......30........0
Credit Card Loan...............3870......200.......0
Total unsecured debts..........12329.....390.......-


Monthly Budget Summary
Total monthly income.................... 3,800
Expenses (including HP & secured debts). 2,150
Available for debt repayments........... 1,650
Monthly UNsecured debt repayments....... 390
Amount left after debt repayments....... 1,260

Personal Balance Sheet Summary
Total assets (things you own)........... 210,000
Total HP & Secured debt................. -123,000
Total Unsecured debt.................... -12,329
Net Assets.............................. 74,671

Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

wordswords

Good news:

• Have fully paid off credit card and overdrafts with bonus money this year, so my only debt is the personal loan at £5000 settlement figure (at £160 / month outgoing) and a 0% £2000 finance agreement/service agreement on the boiler (at £30 /month outgoing) which I am not planning to pay off until we sell the house.
• Wife has started work and is enjoying it. She is contributing £400 / month to the bills.
• I am putting a large chunk of my income in the 40% tax bracket to my pension, which is a very cost-effective way of making up for low pension contributions earlier in life. My pension contributions are 23% / month at the moment, and this is reflected in the lower total income of £2800 for me + £400 from wife.

Bad news:

• Both of us are too tired to cook in the evenings. This has meant that we have increased our spending on takeaways.
• My personal entertainment spending has remained high, finding it difficult to cut down on this without it affecting my mood and general enjoyment of life.