Fed up being in debt

Kevicho

beginningtotry wrote: »

Reworked SOA


Take Home £2689.10
Wife's salary take home: £900 ish with no outgoings.

Total 3589.10

Debts:
Mortgage (£200k) - id leave this out for now, as this is stage 2 so to speak
NR (£25k) - whats the apr, also whats the minimum payment
Company (2k) as above
CC (£4.7k) again interest rate and min payment

Total Debt: £31.7k (this is the debt to concentrate on for the time being)

Monthly Outgoings
Mortgage £1097.86
Electricity £25 - is this the cheapest? check online comparison sites and use cashback sites if you switch
Gas £25 - as above
Council Tax £113
Water £31.13
Tv Licence £11.07
Buildings insurance £14.47 - as utilites
Contents insurance £17.68 - as utilites
My mobile £35 - is this contract or PAYG? if you can cut back here then its a saving
Wife's mobile £35 - as above
Broadband £5
Food every month: £350 - check old school board for how to make this a lot cheaper
Petrol :£200 - id imagine this will reduce when the wife is on maternity, also you could consider changing to a more fuel economic model
Doing up house £400 - This should probably be cut to 0 unless there is a safety issue, once you have cleared the pre mortgage debt

Current Outgoings 2360.21

Current Debt Repayment

NR Loan £286
Company Loan (2k interest free) £100
Credit Card: £200

Debt repayments £586

Total 2946.21

So each month you have around 600 extra, but with the wifes money disapearing (I assume she will be getting maternity pay)

Also i didnt see car maintainence/insurance and also you will prob need to keep a diary for the spends for the baby.

beginningtotry

Right, me and the wife spoke about it last night and we have a plan of action.

Our problem is cards...not cc's as such but switch cards. We just switch things without keeping a tally of what we are spending. We never go over our overdraft limits but sometimes at the end of the month we don't have a lot left.

So we are going to tackle this slightly differently in a scheme which I believe may work for us.

Every week we will draw £200 cash out of an account. So a total of about £900 a month. We must live on this amount. Included in this budget is petrol, food and house renovation but not hte rest of the DD's listed above. Anything we have left at hte end of the week goes into a pot and we start again with £200.

The reason for this is that I want to build some "spare cash" for unforseen circumstances (car maintenance, insurance etc., boiler blowing up, holidays etc.) No more DD's will be set up. Therefore this journal will not only contain a description of CC's balances etc. but also of pot money money left in bank etc. This will give me a figure of "wealth" (or lack of it). Some months I expect this figure to go down (although CC and loan balances should go down) as well as up but it is about the overall trend over a long period of time.

So DD's etc. will be £2000 a month outgoings, including £200 on CC and all loan repayments. Leaving us with approximately (dependent upon commission that month) £1800 a month spare (when the wife goes on maternity this will drop. We are currently negotiating her deal with work). Drawing out £900 will leave £900 in the bank account (hopefully). The total figure will be taken before payday each month. I will also may extra payments again cards, loans as and when.

This approach is different to what other people do and is not the most structured but I believe it is one that will work for us. I want to see the total wealth figure increasing (well the negative value decreasing). I will inlude the mortgage figure but not the value of the house as the aim is to own this anyway (in a long period of time). No other assests or shares owned will be taken into account. I will post about ways in which extra money has been raised.

The rates on the loans etc. are as follows:
Mortgage (4.54% fixed)
NR (5.99% APR fixed)
CC (5.99% APR fixed CC platinum card when they did the good deal)
Work Loan: 0% fixed
Interest etc. in banks will just be included in the figures.

Mortgage/Loan figure will be approximate but should be within a few pounds.

So on 25th September:

Balances:
Mortgage : -£187988.10
NR Loan: -£23495.45
CC: -£4749.18
Work Loan: -£2500
Bank: -£1034.8
Pot: £0 (we haven't started it yet)

Balance: -£219767.53

Squirrel29

I do a similar thing which works for me, I work out my income then deduct my essential bills and debt repayments. Whatever is left I split into weekly amounts to cover food shopping, petrol and spending money. I then transfer the amount on a weekly basis into a seperate current account and use that, leaving the original account to pay bills with.

I can easily see at a glance what I have left to spend on food and treats rather than trying to work out which direct debits are left to come out of the main account before I can withdraw money. I am really strict with myself about this and so far it is helping me budget.

Verbatim

Hi BTT,

Sounds like a good plan and that you're very organized. Will look forward to seeing the progress. congratulations on the baby.

beginningtotry

Right so month 1 is passed and a mixed result.

We mainly stuck to the budget but overspent on a couple of areas.

Firstly £160 of dentist bills.
Then £250 of pre-ordered/pre-budget spending.

On the positive side I sold 2 of my cars (although am buying another one so this money is not taken into account) and we managed to save some money for the "treat ourselves pot".

Final Figures:
Immediate debt (cc's, overdraft) reduced by £822.47
Overall reduction of debt (inc mortgage) £1456.40

So although we overspent we also saved a decent chunk of cash. Overall for a first month I am quite happy. Luckily had a decent pay rise today and got more commission etc. this month so expecting a better month next month. My aim is for over £1500 repayment in total.

In_Search_Of_Me

Just to say well done & welcome! At the end of the day its about working out what works for you! I have 3 accounts - main, savings & DDM so wages go into main, money transferred to cover DDM's & then rest pays for day to day & cc & then a minute amount goes into savings! Works for me! I would recc a spending diary (online one @ spendingdiary.com which makes pretty graphs for you!!) as the single most powerful tool against debt busting! Good luck & keep us updated. When is the baby due?

beginningtotry

Well time for an update as it has been a few months:

My total debt has come down. At the end of September total debt was £221, 274.74. As of today total debt is £214,711.11.

So I have saved a total of £6563.62 over a period of 6 months. Average £1096.94 a month. Pretty pleased with that although could do better. Still being quite extravegent with some things, Christmas etc., and just having our first baby hasn't helped but I am glad the figure is coming down and not going up. Fingers crossed it will continue for a bit!

Did have one really bad month with doing up the house etc. where I spent £1800 more than I earnt so that did set me back but have repaid all of that now. Here is a breakdown of amount saved month by month:

Sep-Oct £1456.40
Oct-Nov £1909.21
Nov-Dec £1328.28
Dec-Jan -£1793.31 oopppss
Jan-Feb £1758.40
Feb-Mar £1904.63

painted_lady

Hi, well done for posting and congratulations on the pregnancy.
I have a boy who is nearly one, I had my lightbulb when I did the pregnancy test (double shocker!) I have managed to pay off some debt and take a year off work. Here is how I did it
- obviously stopped spending on un necessary items
- join all the baby clubs, especially the boots one, there is a list of them all in the money saving in families board on here. Other good ones are HiPP organic, cow and gate, pampers. They send you free products to try and money off vouchers. I now regularly knock £8 off my ASDA bill by using vouchers.
- I have used washable nappies since he was 4 months old, saves about £8 a week, even with thye cost of washing them. I only use disposables when we go away or if he goes to my parents
- Breastfeeding will also save £7 a week at first, but I couldnt do it for medical reasons
- dont buy expensive baby food in jars, just make a smaller portion of whatever your having and blend it. Maybe ask for a hand blender as a present. You might not be thinking of weaning now, but trust me, in a few months you will.
- we got everything given, people are quick to throw out baby stuff because its usually bulky and in the way. We got for free a moses basket, cot, chest of drawers for nursery, baby towels, baby grows, a steam steriliser and a load of other items. We bought a £400 travel system from a friend for £60, it had had 9 months use. We sold it when our boy outgrew it for £20 and now just use a cheap £40 stroller that folds down easier and fits in the car better (hint - you dont need an expensive pram!!)
- freecycle is a great place for getting free baby stuff, ebay is good for getting items cheap and selling on what you dont need anymore. I also sold all my maternity clothes on there (well, the ones I arent still wearing!) I have also had some good stuff from the charity shops, including Jasper Conran jeans for £2, I sold them for £8 on ebay when he grew out of them.
- as others had said, you dont need half the stuff they try to sell you. Changing stations? They cant fall off the floor. Moses basket? Our boy fit in it for 12 weeks and started sleeping from 2 hours a time to 10 when we moved him into the cot. I wouldnt use one again and only used it to start with because we had it given. Burping cloths? Use a tea towel or bib.
- I sold my car and managed to use only my partners, he has a work vehicle too and therefore there was a car sat outside all day, why use my own?
- we also managed to do some of the house up, redecorated the room and replaced some carpets mainly, but an extra expense. Just look at your budget all the time, its not something to do once and forget, it is ever evolving. I have had to learn to say no sometimes when friends are going out, but its worth it to spend time with my boy.
- I bulk bought loads of items that keep from Makro when I was pregnant that helped me keep shopping bill down after he was born. Things like washing powder, you will not believe how much washing powder you will get through.
- write a list of what items you still need and dont be a fraid to ask people to get you something on the list, otherwise you will have a baby that wears an item once and has grown out of it before it is washed. Even little things, I now buy friends a basket with the smaller things in like weaning sppons, bibs, teething rings, photo albums to store all the baby pics, ask someone to buy your bottles, changing bag and so on.

If I think of anything else, I will add it. Please carry on with the good work and enjoy your baby. Its a very special time of your life.

painted_lady

Oh yes, forgot to say, I set up 5 accounts with ING and send money by direct debit to them each month. One account is for quarterly bills, so the money is there when I get them and dont have to panic. One is for christmas, one for holidays, one for my contribution towards the car, one for contingencies such as when our washer broke. I dont really notice the money going out anymore and never panic when these things come up.

painted_lady

I have just noticed the dates on your post, am I right in guessing you have had the baby now?