Trying to clear my debts, don't know how much to budget?

FutureGirl

I need a little help with budgeting - I'm SO bad at it!

I currently have debts of just under £2K.

o2 £221 - paying £50.00pm
Capital one £461.92 - paying £35pm
Capital one £800.00 - paying £40pm
Aqua £273.29 - paying £40pm

I am paying more than the minimum amount each month.

I'm in a good job with a good wage. I am saving for a wedding and for a holiday - both are already booked. I save £450 between them for this.

I end up wth £180.00 left each month after all my outgoings (inc the above).

At the moment, overtime has been stopped at work. I am going on the basis that it won't be coming back (although it will be most likely in the new financial year).

Is £180.00 too much to be left with each month? This amount is usually to get me lunch at work, and for if I want to buy myself something, or go anywhere.

The flat bills are as low as we can get them.

I could use the wedding (Aug 2018) / holiday (Sept 2017) money, but then that'd leave me short for the wedding and holiday.

Does anyone have any suggestions? Perhaps if I budget myself £20 per week (£80pm) for lunches at work and use the additional £100 on my debt? That way I wouldn't actually be able to spend any extra?

I just want to finally get rid of the CC's etc and never get one again!

******

Edit; I'm actually left with £130pm, after factoring in the £50 for o2 as this is new.

enthusiasticsaver

I wouldn't say £180 is too much for personal expenses providing you budget for it. Do you have an emergency fund too? What interest rates are you paying on those debts? Once the cards are repaid close them so you are not tempted to spend on them again

mrsbee17

Are the CC's interest free? Have you done a SOA to see exactly where your money is going for a realistic view of how much you can spare to spend on debt repayment?

FutureGirl

I haven't done an SOA, but I keep a spreadsheet of all my incomings and outgoings.

We don't have an emergency fund at the moment, no.

The interest is around 34%APR on each of them.

For the o2 debt, there is no interest on this. Although I could probably send then a settlement figure in Februarys pay using some of the money for the holiday but I'd then need to make that figure back up somewhere else in the year.

Money_maker

34% APR and you're spending £80 month on lunches at work? I would throw that at your debts and take in a cheap homemade lunch (see the OS board if you need help with that).

tizerbelle

Just think of all the interest you are paying on the debts. I bet you're not earning that same amount on the savings.

If I were you, I would pay them all off in full with the money already saved for the wedding/holiday and then if needed increase the £450 you save for the wedding/holiday by the £165 a month that would have gone to the debts.

Hutchch0920

Buying lunch at work is a massive budget killer. Take something in with you.

I had a chicken caesar salad today, it cost me £1.50 if that. If I'd bought it from Pret it would have been something like £5!

Anyway....

Providing a SOA would be helpful as it will allow other forumites to provide tips on where you can save more money and clear your debt quicker.

If your wedding is not until 2018 and you do don't need to pay any suppliers for a few months you'd be better off paying off your debts first and saving afterwards as in the long term you will end up with more cash as you'll have paid less credit card interest. It doesn't make sense to save while you've got debt on a high interest rate...

Post edit: Perhaps work from the wedding backwards. Look at how much you will need and work out the last month you can start saving it (taking into account CC min payments). Then full force pay off your CC debt and then when you get to month X start saving for the wedding again. Perhaps add a month extra leeway.

EssexHebridean

OK. You're thinking about this the wrong way. Grab some statements, or log on to each account.m Add up what the interest has cost you over the last year. write that figure down in big, accusing red letters. That piece of paper is the key to explaining what you need to do next.

At the moment you're saving for a wedding (I hope you have a budget for THAT otherwise we'll be having this conversation again in a few years time!) and a holiday - but your debt is losing you money each month that you could also be putting towards those lovely things. You're paying someone, to let you save money. That's wrong.

I understand the thought of plundering the savings making you feel nervous - and yes, i can see why that is, so here's a plan:

You suspend adding anything more to those savings for now.
Month 1 - you take your £450, add another few £'s and pay off and pay off capital One debt 1 in full.
Month 2 - you take your £450, add on the £35 you were paying Cap One and you pay off Aqua in full, and a chunk off capital One debt 2
Month 3, you take your £450, add on the £35 you were paying Cap One, and the £40 you were paying Aqua, and you take some of the money you're going to saving by cutting back on your work lunches (yes, really!) and you pay off Cap One Debt 2 in full.
Personally, for peace of mind, I'd roll it on to Month 4 as well and get rid of 02 - once that's gone, your £450 per month to save for your wedding has turned into £615 - tempting, no? And more to the point you don't owe anyone anything. More tempting still...

Your work lunches are currently costing nearly ONE THOUSAND POUNDS per year. That's a lot. Why not compromise - have one day a week when you treat yourself, and cut back for the other 4? Loads of options, if you have access to a microwave then there's jacket potatoes, soup, of heated up leftovers. (Nothing tastes as good on a cold wednesday lunchtime as the remainder of last night's chilli, trust me!). Add some fruit and you have a really healthy lunch for a fraction of the price.

As for budgeting, an SOA (link in the sticky post at the top of the board) is a priority. Get that done, and then you can see what you're spending where, and what you *should* have left over. If that amount isn't left over, you need a spending diary to track it down.

Above all though - you need to prioritise and look at the bigger picture - and that interest figure I mentioned first off, is the reason why.

Good luck!

FutureGirl

Here is my SOA.

Since I'm now paying £50pm for the o2, I now pay £150 for the holiday which is in September.

The amounts for household stuff is 50% of the actual amount, I've put the actual amount in brackets next to it.

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.................... 1

Monthly Income Details
Monthly income after tax................ 1525.00
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1525.00

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 462.50 (£925.00)
Management charge (leasehold property).. 0
Council tax............................. 60.00 (£120.00 over 10 months)
Electricity............................. 15.00 (£30.00)
Gas..................................... 15.00 (£30.00)
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 26.50
TV Licence.............................. 6.06 (£12.12)
Satellite/Cable TV...................... 5.99 (Netflix)
Internet Services....................... 8.70 (£17.40, internet)
Groceries etc. ......................... 110.00 (£220.00 total. Food + cleaning supplies etc)
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 7.88 (£15.75)
Car Insurance........................... 11.00 (22.00)
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 60.00 (buses to work)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10.40 (pre-payment, cheaper due to various illnesses)
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 3.00 (£6.00)
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 150.00 (Sept 2017)
Emergency fund.......................... 0
Storage ................................ 40.00
Wedding................................. 250.00 (Aug 2018)
Total monthly expenses.................. 1242.03


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000.00
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Capital One....................461.92....35........30.34
Capital One....................800.......40........30.34
Aqua...........................273.29....40........49.9
o2.............................221.......50........0
Total unsecured debts..........1756.21...165.......-


Monthly Budget Summary
Total monthly income.................... 1,525
Expenses (including HP & secured debts). 1,242.03
Available for debt repayments........... 282.97
Monthly UNsecured debt repayments....... 165
Amount left after debt repayments....... 117.97

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -1,756.21
Net Assets.............................. 243.79

OH pays for petrol, we only use £20.00pm. Don't drive to work due to there not being free parking, and the bus is £3 per day so is cheaper. We use the car for going to the doctors, shopping, visiting family etc.

- Mobile phone is the cheapest I can get it, it's £8.00 for the tariff, and the the rest is 0% for the phone. Stuck in this until next year.

At the moment I'm paying more tax due to previous employer messing up and ended up me paying less tax, so wages will go up slightly in April, but also get a pay rise as well, so expecting the wages it to total minimum of an extra £75 per month after tax.

We do have a budget for the wedding, we've got a spreadsheet of everything including costs, and date things need to be paid by etc.

We don't have any money 'saved' for wedding/holiday as each month I pay the money off of the holiday, and the wedding money is paying off the venue at the moment.

Dobbibill

EssexHebridean has offered you fab advice.

I would maybe change the order to make the Aqua card the first priority given the APR.

Consider altering your Council Tax to have it over 12 months. This will help with the budgeting.

EssexHebridean

Comments in red, as usual...

FutureGirl wrote: »

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.................... 1

Monthly Income Details
Monthly income after tax................ 1525.00
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1525.00

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 462.50 (£925.00)
Management charge (leasehold property).. 0
Council tax............................. 60.00 (£120.00 over 10 months) You know if it helps with budgeting, you can change this to 12 months, don't you? Disregarding that though - there's another £120 to put to debt right there - no council tax in February or March!
Electricity............................. 15.00 (£30.00)
Gas..................................... 15.00 (£30.00)
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 26.50
TV Licence.............................. 6.06 (£12.12)
Satellite/Cable TV...................... 5.99 (Netflix)
Internet Services....................... 8.70 (£17.40, internet)
Groceries etc. ......................... 110.00 (£220.00 total. Food + cleaning supplies etc)There probably....no, definitely...is some room to trim this a bit to be honest. Have a look at Martin's items on the main site about cutting shopping costs - the "downshift challenge" is worth a look for a start. Also investigating Aldi & Lidl's special offers for fruit and veg and then building a meal plan around those bits. ALWAYS food shop with a list too - that can make a big difference. A further though - this isn't *actually* your food budget, is it....what about the money you're spending on ,lunches for work, too...?
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 7.88 (£15.75) Does this actually get paid over 12 installments?
Car Insurance........................... 11.00 (22.00)
Car maintenance (including MOT)......... 0 Not realistic - even on low mileage it is costing you something!
Car parking............................. 0
Other travel............................ 60.00 (buses to work)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10.40 (pre-payment, cheaper due to various illnesses)
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 3.00 (£6.00)
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 150.00 (Sept 2017)
Emergency fund.......................... 0 You need something in here really.
Storage ................................ 40.00 Is this anything you can deal with getting rid of?
Wedding................................. 250.00 (Aug 2018) Congratulations! :T
Total monthly expenses.................. 1242.03


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000.00
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Capital One....................461.92....35........30.34
Capital One....................800.......40........30.34
Aqua...........................273.29....40........49.9
o2.............................221.......50........0
Total unsecured debts..........1756.21...165.......-


Monthly Budget Summary
Total monthly income.................... 1,525
Expenses (including HP & secured debts). 1,242.03
Available for debt repayments........... 282.97
Monthly UNsecured debt repayments....... 165
Amount left after debt repayments....... 117.97

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -1,756.21
Net Assets.............................. 243.79

There's nothing in there for travel insurance? Do you have this with a bank account or something like that? If you don't, then stop what you're doing now and go and get some, immediately. Otherwise, all that dosh you're paying off the holiday could go down the drain if you're unable to go for any reason!