Just need to unload this

starship15

I'm not new to the forum but wanted to keep a separate profile for this.

I'm around £33k in debt, not including mortgage £34k Shared ownership, I can't get any more credit to switch credit cards - I have 4 at the moment on 0% balance transfers.

We're spending £750 a month on paying debt, we live in our overdraft which often goes over it's £1,750 limit but only by around £10-£50 and I'm able to borrow money off my parents for that (or ebay sales)

We earn enough money to manage normally I did a budget of all our debt and outgoings and we should have £900 at the end of the month to cover petrol, food etc. I'm on £1,800 husband is on £1,330, trouble is (I think) that he gets paid weekly as he's a temp but due to be taken on full time this year. I get paid on the 20th and about 90% of our DDs come out on the 1st of the month - I'm not sure I want to switch them all to the 20th of the month if I get a new job and pay date changes again.

I got so desperate I looked at getting a DMP but it said because I'm not missing payments on anything it wouldn't be worth it.

I've paid off two debts in the last month but these were small sofa payments and a credit card so only saved around £40pm.

I've switched from British Gas to Coop energy through this site to get my energy payments down and hopefully will get a refund of around £200 from BG at some point, I've also got no council tax to pay in Feb and March so that's around £250 I'll have.

Husband is looking to go back to uni to train to be a teacher in September and I don't want to stop him doing something he really wants to do.

I'm looking to at least half the debt by then to make things easier. So looking to pay of around £16k in 8 months.

Is that possible?!?!?

MrsTinks

Start by filling out the SOA on here: http://www.stoozing.com/calculator/soa.php - be honest and fill it in on what you spend, not what you SHOULD be spending. This may take a little effort because you need to know where the money has gone.

Use your statements for the last couple of months and once we know what went wrong it's far easier to help you put it right if possible then absolutely we won't recommend you go for a DMP, but it means you both need to be on board with this and stick the new budget - if you SHOULD have £900 then it doesn't matter when you get paid, the money should be there for it because it shouldn't be getting spent...

You can do this!

National_Debtline

Hi starship,


MrsTinks is right, a SOA is the best place to start. Although your cards are interest free your overdraft may not be. Changing banks is important to help you budget and protect your income from the bank. Open a new account with a bank that no other money is owed to and then you will be able to start budgeting afresh. You won't be able to close the account with the overdraft, but instead, you can make instalments to that like a credit card.


It is important to be realistic with your debt goals. You will have choices to deal with them and you have made a brilliant start by posting here and looking at your options. Your post suggest you have £3130 coming in per month (between you) and you mentioned that you have £900 spare to cover petrol and food etc. However, I would say that means you don't actually have £900 spare because there are other living expenses to come out of this money. If you follow the SOA link above you will see that you cannot determine how much is spare until you have paid all of your living expenses.


To pay off £16,000 in 8 months would be difficult as it would mean paying approx. £2,000 per month to your debts, and from the figures you have described this is unlikely to be possible. You also mentioned that the minimum payments are £750 per month, and I wonder if this will even be available when you redo your budget? A DMP may be a possible option (especially if your other half does go back to Uni). Post some more details for more guidance, good luck,


Laura
@natdebtline

starship15

Thanks for the replies.

I don't want a DMP really I just thought that was my only option. I'm 40 I live in a shared ownership house that I'm hoping to purchase more if I don't want to have things on my credit file stopping me from.

I'm sure it'll all be ok in the end.

I'll try and do the SOA I've just got everything on spreadsheets at the moment.

starship15

Ok, I've done as best as I can, I don't know the interest rate for the mortgage or the loan or the amount on them. Telephone is bundled Sky, phone and broadband.

Mobiles are about £50 each but this is a flat rate and we have all you can eat data and also as my brother lives in the US it helps for when we visit him to have the bundle the we can use overseas.

Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 1332
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3132

Monthly Expense Details[/b]
Mortgage................................ 222
Secured/HP loan repayments.............. 0
Rent.................................... 353.51
Management charge (leasehold property).. 0
Council tax............................. 143
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 11.84
Telephone (land line)................... 43.9
Mobile phone............................ 100
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 10
Petrol/diesel........................... 200
Road tax................................ 9.62
Car Insurance........................... 54.4
Car maintenance (including MOT)......... 0
Car parking............................. 90
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 200
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 5
Haircuts................................ 0
Entertainment........................... 21
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1761.39

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 33,000........(222)......0


Unsecured Debts
Description....................Debt......Monthly
MBNA1..........................2500......35
MBNA1..........................4200......50
Tesco..........................3300......35
Carpets........................300.......40
RBS Loan.......................7955......206
RBS............................7400......200
Barclaycard....................7400......165
Total unsecured debts..........33055.....731


Monthly Budget Summary
Total monthly income.................... 3,132
Expenses (including HP & secured debts). 1,761.39
Available for debt repayments........... 1,370.61
Monthly UNsecured debt repayments....... 731
Amount left after debt repayments....... 639.61

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -33,055
Net Assets.............................. -32,055

starship15

I should also probably say that the debt is, in part, due to getting married at the end of last year.

I'm not normally in this much debt, around 18 months ago I just had the loan and the card I paid off last month.

So this might be normal and I'm panicking slightly.

Thanks

Arleen

The 100 quid a month for mobile seems very high, even for such bundle, could you do with just one phone on that bundle and second on more reasonable pay as you go? And why do you need the landline?

mrskingandthescarecrow

Hello, I think you have some gaps in your soa: Buildings and contents insurance, saving for car mot, tax and insurance and also putting something into an emergency fund to remove the need for the cards in the future. I don't see the overdraft listed but I may have missed it. I would also add a little into the entertainment fund, probably increase to £50 to allow for a little treat in the month. This should make your budget a bit easier to stick to whilst clearing the debts.

If you don't already, use a Budgeting tool such as a spreadsheet if you are able. I would recommend this to help you stick to the amounts you have budgeted in your soa for each category throughout the month rather than the soa being a wish list.

Once you've got your budget in order, I would then look at reducing the debts. As a quick victory I would be tempted to pay off the carpets in full on payday. Then I would clear the overdraft as this can be recalled by the bank at any time. Then snowball onto the cards using the snowball tool.

Hope this helps x

National_Debtline

Hello again,


On a whole, your budget looks good - I have added a few points but they are mainly to increase some of your spending to ensure this budget is sustainable (but I do agree with Arleen about trying to reduce the mobiles when you can).

starship15 wrote: »

Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 1332
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3132

Monthly Expense Details[/b]
Mortgage................................ 222
Secured/HP loan repayments.............. 0
Rent.................................... 353.51
Management charge (leasehold property).. 0
Council tax............................. 143
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 11.84
Telephone (land line)................... 43.9
Mobile phone............................ 100
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 10
Petrol/diesel........................... 200
Road tax................................ 9.62
Car Insurance........................... 54.4
Car maintenance (including MOT)......... 0 You should allow something for this
Car parking............................. 90
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 200 If this is child maintenance then there maybe other child costs, such as , birthday’s, Christmas present, outings, etc.
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 You should really have building insurance (and consider contents and life insurance too).
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 5 This is very frugal – only £60 per year for 2 adults for birthdays and Christmas and for all other family members?
Haircuts................................ 0
Entertainment........................... 21
Holiday................................. 0
Emergency fund.......................... 0 An emergency fund is always helpful – even if you only start with £30 per month.
Total monthly expenses.................. 1761.39

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0

Your budget shows you can overpay your debts. To do this in the most effective way you can look at the snowball calculator or maybe even consider some financial advice. You should be able to make a dent in the debt before September, good luck,


Laura
@natdebtline

fatbelly

To me £200 petrol and £90 parking look high. I met a colleague last week at a venue away from where we normally work. She had paid £5 in a car park - I used google to check where I could park off-street. We both had a 5-minute walk to the venue. Could you reduce those with a bit of planning?

Car insurance at £54.40 isn't particularly cheap either - use the insurance board and guidance when it's renewal time.

But probably allow £15 per month for MOT/Maintenance

Re Council Tax. Great you have 2 tax-free months now. But did you realise that you have the right to ask to pay in 12 instalments rather than 10?

EssexHebridean

OK - I'll have a look at this - I may duplicate some stuff with others as I've deliberately looked at it without referring to what others have said.

First off - I hear your comments about the mobiles and using them overseas - but, put bluntly, with 33k debt, it's going to be a while at least before you're going to be able to afford to visit the US in any case. Do you need all you can eat data? I'm guessing not - I'd say I'm a moderate > heavy user and until recently I've been on 2gb per month and have only occasionally gone over this. Might be worth turning all the data hungry things off on your phone and then using your providers app to establish how much you are really using.

Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 1332
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3132

Monthly Expense Details[/b]
Mortgage................................ 222
Secured/HP loan repayments.............. 0
Rent.................................... 353.51 Does this include your service charge as well? Will you be getting an RPI increase in April as standard for shared Ownership?
Management charge (leasehold property).. 0
Council tax............................. 143 contact the council to ask about splitting this over 12 months rather than 10 - it makes budgeting easier.
Electricity............................. 50 If your heating is via gas then you can reduce this a bit.
Gas..................................... 50 Think about turning the thermostat down a degree or two
Oil..................................... 0
Water rates............................. 11.84
Telephone (land line)................... 43.9
Mobile phone............................ 100 Yes, this has already been dealt with. Look for SIM only plans that might cut your cost a lot as soon as you're out of contract.
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200 You can knock this back a little - do you shop at Aldi/Lidl? It's worth checking what their Super Six / Pick of the week offers are and build your meal plan around using those where you can.
Clothing................................ 10
Petrol/diesel........................... 200 Can you reduce this at all? Have a read of Martin's guide to driving economically and think about any journeys you can walk rather than using the car.
Road tax................................ 9.62 Are yo actually paying this over 12 months? If so bear in mind it costs you money to do this. Allowing for your surplus, I'd look to setting this aside and paying in a lump sum.
Car Insurance........................... 54.4 Ouchy. Have you checked through the comparison sites whether you're on the best deal?
Car maintenance (including MOT)......... 0 You need something in here
Car parking............................. 90 Ouchy again - time to check out places you can park for free and view the extra walk as good exercise?
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 200 Is this maintenance payments or similar?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 Is this covered in your service charge?
Contents insurance...................... 0 You need something in here - it'll cost you under £10 a month.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 5 Go back over your bank statements and see how much you spent on christmas presents. Then add up what you spend on birthday presents over a year and add the two figures together. I suspect this is not realistic
Haircuts................................ 0 Nothing? Never?
Entertainment........................... 21
Holiday................................. 0
Emergency fund.......................... 0 You need to aim to build this to 1k
Total monthly expenses.................. 1761.39

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 33,000........(222)......0


Unsecured Debts
Description....................Debt......Monthly
MBNA1..........................2500......35
MBNA1..........................4200......50
Tesco..........................3300......35
Carpets........................300.......40
RBS Loan.......................7955......206
RBS............................7400......200
Barclaycard....................7400......165
Total unsecured debts..........33055.....731


Monthly Budget Summary
Total monthly income.................... 3,132
Expenses (including HP & secured debts). 1,761.39
Available for debt repayments........... 1,370.61
Monthly UNsecured debt repayments....... 731
Amount left after debt repayments....... 639.61 This is good! Do you actually have this amount left?

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -33,055
Net Assets.............................. -32,055

Well we've seen plenty worse than that! Assuming you don't have a spare £600 odd per month then you need to track down where that's going as that money is a real key to you sorting your situation out. If you can make some of the savings that have been discussed, then you can make even more of an impact.

Look towards getting yourself an emergency fund in place - in your situation if it were me I'd just look to do that as quickly as possible. Once that's done, you can then start hammering the debt. As for wanting to visit your brother, why not see what savings you can make on existing spends with a view to setting that money aside against future travel plans? Effectively a cash-neutral trip!