A new identity and a new diary

Super_Kate

This is my new diary

Super_Kate

I'm back! I've just had a look at our spreadsheet and we are slightly over the estimated £5k of debt. EEK!!

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2 (one owned outright and one on PCP with 18 months left)

Monthly Income Details
Monthly income after tax................ £1054
Partners monthly income after tax....... £3234
Benefits................................ 0
Other income............................ 0
Total monthly income.................... £4288

Monthly Expense Details[/b]
Mortgage................................ £613
Secured/HP loan repayments.............. £350
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. £123
Electricity............................. £80
Gas..................................... 0
Oil..................................... 0
Water rates............................. £47
Telephone (land line)................... £56
Mobile phone............................£44
TV Licence.............................. £12.12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. .........................£400
Clothing................................ £150
Petrol/diesel........................... £200
Road tax................................ 0
Car Insurance...........................£ 59 (for both cars)
Car maintenance (including MOT)......... £100 (includes car tax)
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0 (our wages have £366 of childcare vouchers taken out every month for my DD's nursery. Because i work term time only it varies massively month by month. I save my wages and we try and live off DH's salary and the first thing that is paid from mine is the childcare bills. Nursery fees will be free from January 2018 but i will still have to pay after school club)
Other child related expenses............ £50 (swimming lessons)
Medical (prescriptions, dentist etc).... £29.50 (DH contact lenses)
Pet insurance/vet bills................. £13.57
Buildings insurance..................... £28.06 (and contents)
Contents insurance...................... 0
Life assurance ......................... £56.09
Other insurance......................... 0
Presents (birthday, christmas etc)...... £100
Haircuts................................ £50
Entertainment........................... £150
Holiday................................. 0
Emergency fund.......................... £200 (I will be starting this in June)
itunes sub.............................. 9.99
Microsoft Sub........................... 6.95
Charities............................... £25
Total monthly expenses.................. £2953.28


Assets
Cash.................................... £1323 (monthly savings for children and then £350 in DH's ISA)
House value (Gross)..................... £210000
Shares and bonds........................ 0
Car(s).................................. £19000
Other assets............................ 0
Total Assets............................ £230323


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... £152741...(£613)......2.13
Hire Purchase (HP) debt ...... £19236....(350)........5
Total secured & HP debts...... £171977....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Sainsburys 1...................£2205.....£59........0
HSBC...........................£1600......£36........17.8
Sainsburys 2...................£1841......£100.......0
Total unsecured debts..........£5646......£195.......-


Monthly Budget Summary
Total monthly income.................... £4,288
Expenses (including HP & secured debts). £2,953.28
Available for debt repayments........... £1,334.72
Monthly UNsecured debt repayments....... £195
Amount left after debt repayments....... £1,139.72

Personal Balance Sheet Summary
Total assets (things you own)...........£230,323
Total HP & Secured debt................. -£171,977
Total Unsecured debt.................... -£5,646
Net Assets.............................. £52,700

So I have £1139 left a month not including childcare! That is a lot more than I anticipated. I can definitely get this paid off then by Christmas so long as we are methodical about this.

Right, I guess the next step is to devise a plan of action....

Super_Kate

Super_Kate

I have spent some time this evening working out exactly what is on our credit cards and then organising each item into categories. In doing this i realised that i actually owe another £600 on Sainsburys card number 2! What a massive oversight!! I'm going to have to go back and edit my SOA as i want it to be accurate. I really have to get a grip on my spending.

Here are the categories an amount of overspending in them for the Sainsburys 2 card and the HSBC card....

Fuel £220.42
Clothes £371.92
Spending Money £216.90
Birthdays & Christmas £97.00
Food £272.35
Holidays £928.14 (deposits for holidays coming up and one weekend away where we didn't budget enough grrr)
Car expenses £250.00 (work done paid on credit card)
Work expenses £500.00 (for DH's work - his company need to pay these back)
Furniture £600.00
Total £3,456.73

The Sainsburys 1 card was a debt consolidation job from last year.

I've also been talking to DH this evening and we have decided our plan of action is to pay off the credit cards gradually using money left over from the categories in our budget. Holidays and furniture over spends will be paid off by my salary (after childcare is taken into consideration) and then we can throw the rest at the first sainsburys card.

I do have a lot of big ticket items to sell. The TV box broke two weeks ago and DH and I were lamenting how much we don't miss it at all. We have a firestick and apple TV so i think we are going to cancel our Tv licence and TV package from our provider. That should save us some money each month. I've decided i need to shop in Aldi every week and not do top up shops during the week. Term time weeks need to be NSD's.

Any other tips or advice welcome!

Super_Kate

Super_Kate

Morning all

Its DH's pay day today so I have been up moving money around whilst juggling the children's breakfast.

By using the pot money to pay off the relevant categories on the credit cards I've managed to get the total on the 2 credit cards down to £3079 from £3456 which is a great start. Even as whilst I was online here last night doing my SOA, my DH was organising a BBQ with friends for tomorrow and then ordered a new one for us costing £120. I cant be cross really as we do need one as our hand me down one broke last year so we needed to replace it. I have added it to the furniture line and will not worry or feel guilty about it. SO the categories currently look like this...

Fuel £16.00
Clothes £221.92
Spending Money £216.90
Birthdays & Christmas £97.00
Food £197.00
Holidays £928.14
Car expenses £150.00
Work expenses £533.00
Furniture £720.00
Total £3,079.96

I went shopping yesterday to buy lots of toiletries and cleaning products so we are stocked up for the month and beyond. This has today come out of the food budget and been paid off the CC. I'm going to see if this makes a difference to our spending habits as we will only be buying food from Aldi and meat from the butchers. I'm going to get a small trolley today so I', not tempted to fill up a big one ha ha!!

I also need to make a list of financial things to do today and post it on here as i feel it will make me accountable. I know we can get back in control in no time.

Super_Kate

enthusiasticsaver

You can buy disposable bbqs for £5. Just saying.

You are making a good fist of trying to deal with your overspending but ordering £120 BBQ smacks of spending first and dealing with how to pay for it later and presumably how the debt occurred in the first place. Impulse buying kills budgets. Also the sayings buy it cheap buy it twice and I work hard so I deserve nice things.

Ideally in the future you would have a savings account for replacing furniture, white goods and house diy and repair.

Shopping at Aldi will save you a lot so that is a good move.

I am sure that insurance could be got lower by using comparison sites. We paid £120 for combined buildings and contents for the year on a 4 bed detached house this year. We don't get all the extras though and use savings to replace stuff if broken or damaged.

At least you have not gone down the daft route of getting a consolidation loan and just continuing to overspend. I hope you manage to stick to your budget and clear this quickly.

enthusiasticsaver

You need a category for holidays as you have booked one.

ada-or-ardor

I will put a disclaimer at the start of my message as I think it reads quite harshly, but I honestly am trying to give you a totally objective viewpoint as I see it. So i hope it will be read in the spirit it's intended!! :-)

I think the biggest thing that stands out to me, in addition to enthusiastics's comment above which I do agree with, is that you guys have a very solid income. And very solid disposable income (I cannot believe your income to mortgage ratio - kudos on that!). So I'm wondering, how did this debt arise? If you have, according to your SOA, over £1000 a month left after everything, then you shouldn't really have any debt.... So if it were me, I'd be wondering why we were burning through £1000 a month, plus stacking up 6k in credit (forgetting about the PCP). I think the clue to that is in the purchase of a BBQ.... It suggests your attitude is one of buy buy buy now, and pay later. Which is fine, except it doesn't really work alongside debt-busting adventures... I suggest you create a realistic SOA based on the past 6 months of all bank statements and transactions. It will take a while and probably make you feel sick, but I think in your case will be a very important first step. Because your current SOA is totally aspirational (as you can see by the fact you're adding in £200 emergency fund "from June"), and you need to be working with reality.

I would also keep an eye on your DH and his little impulse purchases. £120 seems a lot to spend from family money without running it past you first, and especially when he know (I assume) that you want to get serious with debt-busting? I'd just make sure you be confident about your own attitude, and then see where he is at in relation to it, because he could scupper all your efforts if you don't have a frank conversation about it (and this will probably need to keep happening to make sure you are on the same page at regular points).

Good luck with your journey! :-)

Ada

Super_Kate

Hi Ada and enthusiasticsaver!! Thank you so so much for your comments and points of view. They are really really welcome and encouraged. It's what we need to get sorted once and for all. I'm going to sound defensive in my response but I'm not I'm just explaining.

I should have probably mentioned early on that DH and I have been in this debt paying adventure for many years. We had £30k of debt in 2013 and have slowly made dents in it as DH's salary has increased. We have actually managed to pay off about £11k in the last 6 months of car debt and uni debt.
That's where the £1000 a month has gone.

I have tried many ways to budget over the years including 3 failed attempts at ynab and pen and paper but the thing that stays true to me is my trusty spreadsheet which i use to track everything. Absolutely.

DH and I have never got on with having pots and savings categories which has been our downfall but I'm hoping to change that by keeping this diary and using the pots method to pay off the credit card debt.

We had a good few months of paying the debt off over the winter and cut back on everything to achieve what we have achieved but now summer has arrived it seems we have gone a bit spendy on summer things. For example I would have liked to have had a pot of money for holidays for this year to pay them outright but focussing on the debt. Once we had decided what we were going to do (cheap cottage holiday in the U.K with friends to keep costs down) we needed to book it to secure the dates and the cattery for the cat and holiday for DH. We are also having a weekend at centre parks just for us as a family which we had to book and pay for. Our holiday budget is basically my salary less £100 min payment for my cc and less childcare which varies each month.

The clothes on the credit cards are for summer clothes - I'm not usually an overspender in this area and neither is DH. I buy stuff to last and have had the same summer shoes (birks havianas and leather pumps) for 7 years until they all wore out last summer. Because of 'operation smash the huge debt as soon as possible' I haven't saved up anything for new shoes for this summer so once it arrived the shoes had to go in the credit card. That's just an example to illustrate our thinking.

I'm passionate about the environment and don't like to throw anything away. We have never bought a BBQ before having survived with hand me downs from both sets of our parents in the 12 years we have lived together. I saw one in sains yesterday for £50 but it wasn't very sturdy. DH has bought one for life - we do BBQ a lot in the summer.

I also buy eco cleaning products (I've tried homemade - just not the same for me) and use eco balls in my washing machine for most loads. These are pricey but as you can see from our income we can afford it - we are not in the breadline. I know not everyone can do this so my thinking is that if I can then it's worth it -especially for my conscious. I'm not a girly girl who likes lots of clothes and products. I make clothes and refashion things. I currently have 3 of my husbands old work shirts waiting for me to turn them into tops for me or dresses for my daughter. I like to use products on my and my families skin that don't contain parabens or sls and these can be pricey although I have seen the price come down over the years as more and more people request this for themselves. We also buy free range or organic meat where we can, a lifestyle choice for us.

DH and I are simple at heart and like good books and wine over dinners out these days. We exercise at home and like walks and picnics. He also likes cooking. The over spends for spending came from us having an unbudgetted and impromptu family meal out once we realised we had paid off £11k in 6 months (£75 - our first meal out this year) and DH spent £70 on a night out with friends a few weeks ago. There were loads of them and he bought 2 rounds and a taxi home. He didn't go for the steak dinner before hand and he didn't know he was going out until a few days before so we couldn't budget for it. And he never goes out so it was a good plan. We just haven't paid it off yet.

Bottom line is we need categories in our budget now and we need to stick to them and payback the debt from the categories. If we can do this then we can achieve all our financial dreams. No more all or nothing approach.

Hope that explains our situation a bit more. I know it looks bad but it used to be a hell of a lot worse.

Thanks for the kudos for the mortgage to income ratio! We are very proud of it and it has taken years to get there. The mortgage is actually only worked out on DH's salary and doesn't take mine into account.

Sorry for the long post.

And yes we do need to look at some of our insurances. I will add that to my list of financial to dos.

Super_Kate

Super_Kate

Afternoon debt free wannabes!!

I have meal planned and shopped at Aldi today. £54 spent but got loads of basics to make meals for the week using up what we have. I do. Have to go to the butchers to get some meat and BBQ stuff for tomorrow. We will also need a few beers of course but that comes out of spending money for the month. I'm going to be very strict about that. I'm currently cooking jacket potatoes for the children and I will have a stir fry after I have done yoga once the children are asleep. DH is working in London today and networking there this evening so won't expect him back until late.

I have a massive pile of bills I need to sort into piles and file so I'm planning to do that later in front of a crappy film for company. I will also finalise my financials to do list to get things kicked off.

I also must get online and donate some money towards the Manchester victims. Every time I look at the news I feel so desperately sad that I can't do anything. But I can do that. And live harder than ever before as a tribute.

Other successes today include finally starting an instagram account for my blog that I am planning to start soon and plan to make money as a side hustle. I won't share much on here as I don't want to get 'discovered' but I am very excited about it and will probably mention it on here. I have already written a few blog posts that need editing and I have bought the URL but need an actual website now.

It's half term this week and I'm off as I work in eduction (although increasingly disillusioned) so I have LOADS of work to do as well as lots of things that need doing. I need to write a big to do list that is realistic tonight so I can achieve it all.

Hope everyone is enjoying the lovely weather!!

Super_Kate

enthusiasticsaver

I would not spend on the HSBC card if it is charging 17.8% interest. On that balance if you are only paying £36 per month almost £24 is interest so it is being reduced by £12 per month. You would do better focusing on repaying that one.

Can you stop using the credit cards and use your bank account instead? This tends to focus the mind on how much you are spending. If you have paid off £11k in 6 months that is good and if you carried on at that rate you would have this paid off in the next 3 or 4 months.

Ideally your husband would have a separate account for work expenses and use a separate credit card just for this. That is what my DH did and it meant he was more diligent about claiming them back if they weren't merged in with our family finances.

Super_Kate

I think we. We'd to make some significant changes to the structure of our finances in order to sort them out once and for all.

Husband actually has a company credit card but has had to use his own card when he maxed his limit a few months back. The company are really slow at paying things back. We also might have to pay it off ourselves as DH forgot to cancel a flight £400 ish) when he didn't need to go and see a client after all and the company are probably going to insist he pays it himself which is fair enough if annoying. Don't worry he had a stern talking to from me about 'organisation skills.'

I feel we both need a basic joint account for 'emergencies' as a sort of overdraft for if something comes up and we need access to money.

We use credit cards for online purchases. Neither of us like shopping and we live 20 miles from the nearest city so We clothes shop online and then pay it back. If we didn't have credit cards are debit cards safe to use online?