Facing upto the debt mountain

m_c

The monthly figures are in.

Current Account - 7.55 in credit!
BC - 3876.74
CO - 1140.64
TB - 0
Loan - 3049.06
HtB ISA - 2000
Virgin - 7012.35


Giving an overall balance of -13071.24, which is a reduction of over £1900 this month.
Overdraft cost was quite a bit higher than I'd hope at £24.00, but most of the month was spent in it, so I can't really complain.
Only other interest charge was the loan at £18.90.


This months Capital One is looking to be around 1000. I'd still like to get my monthly personal spend under 500 on it, but I know this month includes around 300 of business expenses, and some vehicle repair costs.
I have had a quick look at YNAB as I think it'll help me budget better, but have not really had the time to look at it properly, and I'm currently limping along on mobile broadband so can't really watch any online videos just now :-/


I'm going to hold of with too many budget predictions for this month anyway. I'm of on holiday in a couple weeks, which may prove a little bit costly, but we'll wait and see. I'd really like to get below 12000 (or 11000 if my final bills get paid), but that's entirely dependant on the holiday cost.


The main thing on my mind just now, is the bank loan. It'll be the last thing I'll be paying interest on, and the last payment is due in November. I'd really like to get the last payment made at the start of October, however that will depend on no surprise expenses over the next few months.
Since the current account finished in credit, I did make an additional payment this week of 49.06, just so it's now sat at a nice round 3000.00.

m_c

Time for the monthly check in.

I'll get the figures out the way first.

Current Account - 209.92 in credit!
BC - 3786.74
CO - 1464.92
TB - 795.99
Loan - 2507.88
HtB ISA - 2200
Virgin - 6932.35

Giving a monthly net worth of -13077.96, which is 6.72 worse than last month. I had hoped to not pay any overdraft interest this month as I stayed within the 300 free overdraft all month, however I got charged 12.91. I still need to contact the bank to check, but I suspect it may be to do with account cycle dates.
Interest on the loan was 15.63, making my total interest costs for the month were 28.54, meaning I finally dropped below 10% of the interest I had been paying at the beginning of the year. In January my interest cost was 309.77!


I'm not going to complain about increasing my debt this month too much, as I was away on holiday for 10 days, which wasn't as expensive as I thought it would be.
However on the way home I stopped at a guitar shop, and seen something I liked very much. I had only intended to pop in and do some browsing, but they had something I'd been thinking about for a good few months, with the kind of finish I really like, and well, it's now currently sat next to me.
My plan had been to buy one once I'd repaid the loan, but I might of struggled to find another one with this finish.


Since I finished the month with the current account in credit, I made an additional payment of 307.88 to the loan, so it currently sits at 2200.
Paying so much may of been a mistake, as by the time I factor in paying of the two credit cards to avoid interest (I do still have over 1000 in my business account as everybody finally paid their bills!), I may be back in the interest charging part of my overdraft before the end of the month :-/

m_c

Time for a mid-month update of sorts :-/

Had to buy a new laptop, as my old one finally died, so I know straightaway this months figures are going to be bad. I had been hoping the laptop would of limped it's way into next year, but it wasn't meant to be.
I did spec the new laptop a bit higher than what I could of managed with, but it should mean it'll last me a good few years before needing upgraded (I use it for CAD/3D designing, so needs to pretty powerful to not endlessly frustrate me!). Only plus point is I got it on a 48 month finance offer, that provided I pay it off within 12 months, will be interest free. It does however mean I've now added £1400 to the debt (it's not all laptop, as I added a few extras to help re-arrange my office).

I am a bit annoyed that it'll mean my total debt will of increased for two months in a row, but I knew the laptop would need replaced at some point, and things should get back on track next month.
It's also highlighted how I really need to get an emergency fund that isn't my overdraft in place.

m_c

So I'm a bit late with the end of month update, but better late than never.

Current Account - -195.13 (managed to keep in the zero interest zone!)
BC - 3696.74
CO - 2280.325
TB - 71.82
Loan - 1705.21
HtB ISA - 2400
Virgin - 6852.35
Laptop - 1450.35

Bringing the total to 13851.85, which is 773.89 worse off than last month, but if I exclude the laptop, it's a ~675 improvement. And the only interest I paid last month was on the loan, which totalled 12.96.
So things were still moving in the correct direction.

I say were, because my current runaround van is now officially dead. After a few days of considering options, I pick up a brand new Transit next week, as their current scrappage deal made the most sense.
I had been hoping my current van would of got through another MOT, and look at getting a replacement next year, but it just wasn't going to be practical.
I wanted another van, but not one I was going to have to spend lots of time fixing, which after doing searches for what was available locally, left a few options. Either some base spec vans in the 10-12k price range, reasonable spec vans around 12-14k that I don't really like driving, or just bite the bullet and get a new transit.
Given I do about 20k annually, I opted for new. Not the most sound financial option, but I get what I like, I'll know the full history of it, and I shouldn't need to replace it for a good few years.

I opted for a 5'000 cash deposit, which has come via a money transfer offer on the Tesco card (0% until April 19 with 2.9% fee). I actually transferred 6'000, so I can clear the bank loan.
The rest is via ford finance, with an APR of 5.9% (this was a persuading factor in the decision, as the other vans were over 10% APR)
Monthly repayments are 408, the loan was 507, so that saving will pay for the additional Tesco payments, so I shouldn't notice much difference in outgoings.

Plus the new van means I'll save some business rental costs (I used to rent a van a few times a year).

And the best bit is, the new van is £5 cheaper a month to insure!

I'm not really looking forward to the end of this months financial summary :-/

Marktheshark

I dont think you can be helped.
Sorry.

m_c

Marktheshark wrote: »

I dont think you can be helped.
Sorry.

Because I've just increased my debt, or because I opted not to go the fashionista VW option?

Pianist

It's a bit unkind to say that this guy can't be helped. I've read through his entire thread and he's making a really positive effort. He'll succeed in time, and he's got the good sense to know when spending a bit more on good-quality replacements (computer, van, etc.) is a better long-term financial investment than trying to make do with second best. He's on the right track.

True, the guitar wasn't essential, but I can't lecture him on that luxury without being hypocritical considering the large sum that I paid (on credit) for a pair of top-of-the-range loudspeakers many years ago. It was a similar situation with me; I went into the shop to browse but ended up buying. I didn't like having that four-figure debt hanging over me.

Maybe the holiday wasn't essential either (personally it's the first thing I'd cut back on if I was striving to be debt free) but if he returned from his holiday refreshed and therefore more productive in his work then you can even claim that the holiday was an 'investment'. And he went for a cheaper holiday anyway.

I've been completely out of debt for years now, and even now I remain grateful for the peace of mind and sense of security that it brings. There is NO WAY that I am taking on debt ever again. My credit cards get paid off in full every month.

Good luck with what you're doing, mate! Being totally free of debt is like having a heavy burden taken away. You'll get there in the end.

m_c

Thanks Pianist.

I'm quite happy to admit the guitar was a luxury, as it was my reward for the amount of extra work I do over the summer. Given recent expenses, I do wish I had the money instead, but what's done is done, and I enjoy playing it.

As you've highlighted, I look at the long term value of things I buy. Yes, it's a high spec laptop, but having used it at it's first major event, it was a major improvement over the old laptop. Plus I can do all my CAD/CAM work wherever I want, without being hindered by lack of processing power.

I would of much rather not had to buy a new van, and it took a few days of chewing figures to make a decision. I knew I would have to replace it within the next year anyway, and it would probably involve finance to get something good. At least now, I've got something that should not cost me anything apart from routine servicing for a few years, eliminates the need to hire vans for my business, and I'll enjoy driving.

I won't deny it has put a major dent in my debt free plan, but having adjusted my figures, provided I don't get any more surprise big expenses, I should still clear my credit card balances before the 0% deals expire.
Although I think I'll have to make use of the overdraft for a bit longer than planned. My current short term goal, is clear the overdraft, and get at least a £1000 buffer in place.

Now that my busy period is mostly over, and I'm getting the energy levels back up (had a few weeks of doing the bare minimum, while catching up with some books and binge watching), I've started on designing some new products.