2017 Debt Free Wannabe

Lonire

Hello and Happy New Year Everyone,

I thought after a long time reading posts on the forum that I would post and with this statement publicly declare my intentions;

This new year, my resolution is to become better with my finances and become debt free. I have always went with the flow and spent money carelessly. I have a fairly good job and have never worried about purchasing on credit card. However, upon counting up my card debt I got a huge shock. It stands at 19k, this is on top of a personal loan for post grad college with an outstanding balance of 27k. A total debt of 46k.

This has shocked me but not wholly surprising given my lack of financial prudence. I am now on a quest to become debt free. I have been trawling the threads and discussions and taking on board all of the tips and putting them into practice. Small things so far like brining lunch to work, making my own coffee and tea etc and really cutting down on my spending. I have reduced my bills and got rid of things I don't use or need. I am also going to try and sell some unwanted goods online

The one thing I need to change for sure is my urge to spend without acknowledging the cost and if I really need to buy the item.

I am 30 years old and if I don't change this pattern it will only get worse. I am happy to have had a lightbulb moment and decide to overhaul my way of life.

Any thoughts, tips and advice on how best to proceed are welcome.

sourcrates

Hi and welcome to MSE.

First thing normally is to post a Statement of affairs (SOA) then we can see if there's anywhere cuts can be made to your budget.

Link here :

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

Post this up, format for MSE, and we'll take it from there.

Lonire

Thanks Sourcrates, appreciate the speedy response. Please see below, first attempt of the SOA but should be all there.

Household Information[/b]
Number of adults in household........... 1
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 4195
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4195

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 650
Management charge (leasehold property).. 0
Council tax............................. 50
Electricity............................. 13
Gas..................................... 0
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 15
Mobile phone............................ 30
TV Licence.............................. 12
Satellite/Cable TV...................... 40
Internet Services....................... 25
Groceries etc. ......................... 200
Clothing................................ 100
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 128
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 50
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 40
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 500
Holiday................................. 200
Emergency fund.......................... 0
Total monthly expenses.................. 2183


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 4000
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 4000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Card 1.........................3985......49........11.1
Card 2.........................5757......150.......18.9
Card 3.........................6484......130.......18.9
Loan...........................27000.....499.......12
Card 4.........................3866......50........22
Total unsecured debts..........47092.....878.......-


Monthly Budget Summary
Total monthly income.................... 4,195
Expenses (including HP & secured debts). 2,183
Available for debt repayments........... 2,012
Monthly UNsecured debt repayments....... 878
Amount left after debt repayments....... 1,134

Personal Balance Sheet Summary
Total assets (things you own)........... 4,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -47,092
Net Assets.............................. -43,092

sourcrates

One thing that stands out straight away, £500 a month on entertainment ? ? ?

Sounds like a few good wk ends, but can you cut back on this at all ?

Lonire

I will be cutting back on that enormously for sure! It is ridiculous when putting this out in black and white to see. Very helpful process though! I am going to keep a spending diary which will show me what I really spend and that I don't actually need to spend that much etc.

zippygeorgeandben

and £200 on holidays? per month? You sound quite sociable, and perhaps you have quite a few friends who like to go out for food/drinks quite often. Perhaps you could gently tell them you're trying to sort finances out and perhaps reduce this to £50? I know it's difficult when you earn a decent salary. Spend as much as you earn etc.
Well done you though on having your lightbulb moment. Make sure you keep us updated.

Lonire

Thanks Zippy, Instead of spending money on the trips I've been looking at free stuff to do near home and encouraging my friends to do the same. New Year has given me the perfect opportunity to do this. Will certainly keep you updated. It really is helpful to put my situation out there and hear the advice and experiences of everyone on the forum .Really is useful. Ive been trying to cut down my bills as well. Going down to my mobile phone provider tomorrow as I know they have lots of in shop deals. fingers crossed can save another few quid and put it toward my debt bills.

I am going to concentrate on paying of one card at a time while paying the min on the others until cleared. Is this the right way to go about it'?

zippygeorgeandben

Have sent you a DM Lonaire

Little_Miss_Winner

Hi

Do you really have this left over at the end of each month?
Amount left after debt repayments....... 1,134

If not, then you really need to find out where it is being spent.

Well done on having your LBM, you earn a fantastic salary so should be way ahead of getting this cleared quicker than most.

keep up the good work

Chandelier.

Hi Lonire..

A couple things I've noticed you could cut back on slightly if you like..

TV satellite and Internet services and phone line.. That's £80 altogether there you pay. You could look at getting rid of the television package or dropping down to basic? It depends on how much you watch it I guess. There are some great packages out there such as nowTV for a small price each month and it's just as good. However we only pay £50 for the full package (TV £32) and have a years free internet (line rental £17.40) with $ky and this is through haggling. If you pursue you can get a great bargain. Google haggling $ky and a thread comes up where people have managed 60% off for a year and £50 credit. It's just a thought.

You've already said you'll look at your mobile phone. If your due for renewal do you really need a shiny new phone? There are some great sim only plans.

Groceries at £200.. Is that just for you? I reckon you could easily shave £40/50 quid off here, possibly more if you meal plan/prepare in advance/cook from scratch and take lunch to work with you. If you don't already try shopping at places like @ldi if you have one near you or go down a brand. Have a look at what you've already in your cupboards/fridge and freezer and make a list. Try use what you've already got. Also look at food wastage and see what you tend to waste a lot of and rebuy the next week. For us it was things like pepper, mushroom etc that go off so after a few days we tend to chop and freeze. Try the old style money saving board for tips on groceries etc. They do alot of challenges.

Clothing at £100... Do you really spend that much or need to? Alot of people have what they call a capsule wardrobe or small wardrobe where they can mix and swap items but still look good. Also I understand if it's work related clothes, invest in a couple of good outfits and rotate. Go through what you already have and what you wear mainly. Clothes you may decide to get rid of you could possibly eBay or put on fbook selling sites/donate to charity.

Contents insurance looks high at £40 a month. Go on price comparison websites and find like for like quotes for alot less. You can definitely half this and if possible pay it annualky. We paid £240 up front for both building and contents insurance with all the sparkly add ons because that was what my mum wanted hence the price. We always pay annually. Also try going through cashback websites such as quidco and topcashback when renewing bills.

Presents at £100 a month/£1200 a year... Who do you buy for? Work out who you buy for over the year and budget for each person then total up. You can definitely reduce this. People prefer presence, not presents. Or buy in advance if possible and shop around on Internet for bargains and check cashback websites (only small amounts but adds up, as the saying goes look after the pennies the pounds will look after themselves). Also check for any discount codes.. Through doing this I saved around £80 over Christmas. It can be done.

Entertainment- already been said about reducing. Look at what you're spending on (go through previous bank statements and find an average). Plan days out well in advance, look for offers on Internet and if eating out dependent on where you go, you may find some discount vouchers etc to save money. What sort of activities do you do entertainment wise? Maybe stay in more and have friends/family round and cook for them/movie night/games night with a couple of bottles of wine or beverage of your choice. I'd maybe cut it down to £300 for now whilst you get used to this and try to stick to that each month. Set yourself challenges.

Holidays- you could reduce this, easily half it or get rid and not holiday for a year or so. However I know how daunting that could be. Holidays and breaks away are important for me so I budget small affordable amounts from where I save money elsewhere. Maybe reduce this to £125 a month and set up a standing order to a separate current account and let it build up. That's £1500 for the year. Can get a couple of good city breaks for that for a single person.

Emergency fund:- 0. You need something here. Start small and build up at least £1000 incase something were to go wrong. Some people leave it as that. Others save 3-6 months worth of expenses. It's up to you and how you choose to pursue but it's always a good idea.

You have a great income each month and ideally should have a good surplus too. If you make small changes you could have a lot more and be well on your way to becoming debt free over the next couple/few years.

Quick one. Is your electricity really that low each month and nothing for gas?

I hope you find this maybe helpful. I've waffled on a bit.

All the best Lonire.

Lonire

Thanks Little Miss Winner and Chandelier, really appreciate the posts. It def helps knowing there is support on here.

Had a great day at work with my cost cutting. The figures on the surplus are there but I certainly don't have that money leftover previously, so I can only imagine I have been overspending on the entertainment, buying lunch out and dinners. Terrible habits I know. I have had a instances of ad-hoc costs relating to some private medical costs over the past while as I was in an accident in 2015 where I broke my nose and fractured my cheek ( hoping to claim this money back which will go straight to paying off the debt) I will look through my statements at the weekend to figure it out for sure. But have begun a spending diary for this month to make sure I know where every penny goes. Have managed to eat breakfast and lunch in work having bought a big box of porridge and also been batch cooking soup. Made another big pot this evening. Just got to keep it up.

Been searching around for ways of cutting down entertainment costs and have noticed my bank provider do a reward scheme whereby you get a percentage back for paying bills by direct debit. Turns out I have £50 in there and you can exchange it for money vouchers which works out better value. I.e two cinema tickets for £10. Could be good for those occasions whereby have to have a trip out. Will save up the rewards for a rainy day though.

Didn't get around to the phone shop today but will go round tomorrow and def get a sim only deal. Phones are getting so expensive and most companies are trying to lease the phone to you now.

My food wastage habits have been awful, but have been looking at addressing that. In December and January I have been using meal planners and trying plan meals that have similar ingredients etc. That is a great tip on the peppers and mushrooms Chandelier. Never ever thought to freeze them. Any more tips like that would be great. Will have a look over the groceries threads. I have a cupboard full of tins pasta, rice and spices that I will start to make my way through, finding recipes to use up that stuff. Fingers crossed.

My electricity is 26 a month and as I live in an apartment block we have a strange electric/common usage for hot water. Thats why no gas charge. I rarely use the heating though as the apartments are so warm. I find myself just putting on a jumper.

I am going to call my service providers & contents insurance tomorrow to see if I can haggle any discount. My contents is up for renewal so a good time to jump on it!

I will keep you updated on that and also how my spending diary goes!

Thank you everyone. Really appreciate it all, actually realise now how beneficial it is to post on here. It actually makes me think about it throughout the day and make better choices.

:j:beer: