Debt-Free Wannabe ASAP

Tempus01

Hi All,


Gosh I don't even know where to start with this...... I have finally admitted to myself that I am in debt and need to do something about it.


Bit of a back story..... I was due to get married this year, wedding booked etc. etc. and my fianc! called the whole thing off. Since this I have found myself in an increasingly difficult situation. Not only have I had to get over the relationship (we were together 8 years) I have part of the wedding to pay for along with other debt we accumulated as a couple.


Our wedding was due to take place at the end of this year, everything was booked so we have had to pay for lots of cancellations. When we split we had credit cards together which were in my name. We had some cash in our account so we paid off what we could for the credit cards and then he set up a direct debit to my account paying me every month for his half of the debt. But his payments are due to stop in the next couple of months, which I am growing increasingly worried about. It’s £150, and at the moment I don’t have that spare.


When we split I had to move out and get an apartment by myself which put me in even more debt. I took out a loan to consolidate my debts but after the break up I just lost my way and spent on my credit cards. I know…..ridiculous! When I took out the loan they advised that if I make payments for a year that I could then possibly revisit the loan to see if they could offer me a better option.


My debts are as follows:


NatWest Loan £6200 over 26 months at 23% APR = Total £8392.32 (£231.81 per month, 3 payments made so far)


Barclays Credit Card = £1471.36


Tesco Credit Card = £2003.17


NatWest Credit Card = £1422.34


Littlewoods account = £104
Total Debt: £12697.76 (Wow that’s actually a huge shock to me, first time I have properly looked at everything together)


I always pay at least the minimum back on each credit card each month, more if I can. I have an okay job and take home around £1760 every four weeks but with bills and repayments I am struggling to make ends meet.


Anyone any tips they can give me and help me become debt free and rebuild my life?

Kidder81

First thing to do is post a full SOA. People can then give you advice.

In theory, with your income, it shouod be back possible to clear your debt. It all depends on your commitments and outgoings.

EssexHebridean

Well done for taking the hardest step and acknowledging that things need sorting. sadly you're far from the first we've seen here in your situation - so you're not alone on this one - and similarly on consolidation, it seems a sensible thing to do but unfortunately doesn't solve the problem at the root, it simply papers over the cracks.

As said above - first step is a full SOA (Statement of Affairs) - you will find the link to the one we recommend using in one of the "sticky" threads up at the top of the board. Get it filled in honestly, accurately and most importantly reflecting the way things are right now. post it back in here and we can take a look and see if we can identify any savings you might have missed.

On the matter of debts that your ex should be taking at least some responsibility for, assuming that things were amicable enough at the outset for him to set up the DD in the first place, my suggestion would be to make a written account of exactly what is still owing, and then ask him to extend the DD to cover these for the relevant period of time to clear his share. Worst that can happen is that he says no, but you never know?

Tempus01

Kidder81 wrote: »

First thing to do is post a full SOA. People can then give you advice.

In theory, with your income, it shouod be back possible to clear your debt. It all depends on your commitments and outgoings.

Thank you, I am just working on that right now

Tempus01

EssexHebridean wrote: »

Well done for taking the hardest step and acknowledging that things need sorting. sadly you're far from the first we've seen here in your situation - so you're not alone on this one - and similarly on consolidation, it seems a sensible thing to do but unfortunately doesn't solve the problem at the root, it simply papers over the cracks.

As said above - first step is a full SOA (Statement of Affairs) - you will find the link to the one we recommend using in one of the "sticky" threads up at the top of the board. Get it filled in honestly, accurately and most importantly reflecting the way things are right now. post it back in here and we can take a look and see if we can identify any savings you might have missed.

On the matter of debts that your ex should be taking at least some responsibility for, assuming that things were amicable enough at the outset for him to set up the DD in the first place, my suggestion would be to make a written account of exactly what is still owing, and then ask him to extend the DD to cover these for the relevant period of time to clear his share. Worst that can happen is that he says no, but you never know?

Thank you
When me and my ex split we did split the debts in half, we had some cash wehich we put towards the debt but the rest we halfed. He has been paying me his half since January but it's due to finish in November. Will post my SOA shortly.


I've just been and reduced my phonebill so already feleing like I'm on the right track

Tempus01

[tt]Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 1761
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1761
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 800
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 45
Gas..................................... 0
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 0
Mobile phone............................ 30
TV Licence.............................. 12.18
Satellite/Cable TV...................... 45.99
Internet Services....................... 0
Groceries etc. ......................... 160
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
TV repayment............................ 25.61
Littlewoods............................. 40
Gym..................................... 40.5
Total monthly expenses.................. 1399.28

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................7699.32...231.......23
Tesco Credit Card..............2003.17...57........0
Natwest Credit Card............1422.34...23.8......0
Barclay Caredit Card...........1631.36...50........0
Total unsecured debts..........12756.19..361.8.....-

Monthly Budget Summary
Total monthly income.................... 1,761
Expenses (including HP & secured debts). 1,399.28
Available for debt repayments........... 361.72
Monthly UNsecured debt repayments....... 361.8
Amount short for making debt repayments. -0.08
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,756.19
Net Assets.............................. -12,756.19
[/tt]

EssexHebridean

Tempus01 wrote: »

[tt]Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 1761
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1761
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 800
Management charge (leasehold property).. 0
Council tax............................. 100 Are you getting the single person's discount on this? And have you got it paid over 12 months or the standard 10? 12 can make budgeting easier, particularly if money is tight.
Electricity............................. 45 All heating, lighting and cooking by electric?
In which case I assume storage heaters - best tip there is learn ALL about them and remember to check the weather the night before so you can reset if needed!
Gas..................................... 0
Oil..................................... 0
Water rates............................. 40 Try and get this metered if it's not already -
for a single person it will almost certainly work out cheaper.
Telephone (land line)................... 0
Mobile phone............................ 30 As soon as you contract finishes look to go SIM only - you can reduce this a lot.
TV Licence.............................. 12.18
Satellite/Cable TV...................... 45.99 Does this include land line and internet as well? You may be able to reduce that down
Internet Services....................... 0
Groceries etc. ......................... 160 You can probably shave a bit off this -
meal plan, use up what you have and shop at Aldi or Lidl for a starting point.
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0 No travel costs at all? You walk to work and never travel to visit friends or family?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 False economy not to have this - you can get it for well under £10 a month. Remember to use a comparison site and go through TopCashBack or Quidco for the purchase.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
TV repayment............................ 25.61
Littlewoods............................. 40 Should this be under debts rather than outgoings?
Gym..................................... 40.5 Are there local "budget chain" gyms that you could switch to?
Total monthly expenses.................. 1399.28

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................7699.32...231.......23
Tesco Credit Card..............2003.17...57........0 Make sure you have a note of when the 0% finishes on this
Natwest Credit Card............1422.34...23.8......0Make sure you have a note of when the 0% finishes on this
Barclay Caredit Card...........1631.36...50........0Make sure you have a note of when the 0% finishes on this
Total unsecured debts..........12756.19..361.8.....-

Monthly Budget Summary
Total monthly income.................... 1,761
Expenses (including HP & secured debts). 1,399.28
Available for debt repayments........... 361.72
Monthly UNsecured debt repayments....... 361.8
Amount short for making debt repayments. -0.08 As shortfalls go, that one's not too dreadful! :rotfl:
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,756.19
Net Assets.............................. -12,756.19
[/tt]

OK - could be a lot worse - you have wiggle room from the look of it.

Might be worth thinking about having a look at the boost your income board on here for ideas about doing surveys etc to bring in a little more cash. Personally I'd also be looking at cutting clothing purchases back to bare essentials only, bringing the cost of haircuts down a bit (go an extra week between cuts, maybe a subtle change of style that's less high maintenance?) and reducing the amount spent on presents while things are still very tight.

A quick tip for you - on the CC's if those payments are the minimum payment each month, set the Direct debit for that amount going forwards - this means that over time that amount will make slightly more of an impact on the overall balance than just letting it trot along with the minimum payment falling each month. This ONLY applies for cards you're not spending on though.

Silly question perhaps but currently you're not showing OH's £150 towards the debts on the SOA anywhere? Does the income figure you've used include this?

cs1986_2

Things that stood out to me:


Gym - £40 a month. I would either find a cheaper gym (council ran ones at leisure centres can be cheaper) or cancel my membership all together. If you want to keep fit, going for a run is free, so is doing a youtube workout DVD in your living room.


Littlewoods - £40 a month. Not sure what this is paying for?


Groceries - £160 a month. Seems a lot for a single person. When I lived alone and needed to tighten my belt I managed to get food shopping down to £20 per week. If you could get it down to £25 per week that would save £50-60 a month. I became less precious about which brands I bought, took advantage of offers (never paid full price for things like crisps, butter, pizza, biscuits etc, there is always a brand on sale). Maybe look online for some cheap but nutritious meal ideas, I am sure you could get your groceries bill down.


Cable TV - £46 a month. You may well be in contract here so not an easy one but I pay £34 a month for Now TV. For that £34 per month I get fibre optic broadband, free evening and weekend calls, line rental plus the Now TV entertainment pass which has Sky1, Sky Atlantic etc. That would be a 25% saving for you if you could switch.


Rent is obviously gobbling up a fair amount of your income but I would save moving to somewhere cheaper as a last resort (unless you actually want to move).


To boost income try ebay or Gumtree. You could also head over to the Boost Your Income section on this site, websites such as TopCashback, Swagbucks, Prolific Academic and Ciao are ones that I use and although they wont make you rich, Ive certainly had a few hundred quid paid to me from these sites.
You could also switch your bank account when one is offering a payout. I got £100 just for moving to Halifax a few years ago, they did all the work, I just filled out a form in branch.


Hope none of that sounds harsh. Well done for taking the hardest step as has been said. Clearing debts isn't easy, it really does require dedication and will power but you will get there, some hugely knowledgeable people on here.

Tempus01

Council tax............................. 100 Are you getting the single person's discount on this? And have you got it paid over 12 months or the standard 10? 12 can make budgeting easier, particularly if money is tight. This is over 10 months
Electricity............................. 45 All heating, lighting and cooking by electric?
In which case I assume storage heaters - best tip there is learn ALL about them and remember to check the weather the night before so you can reset if needed!
Gas..................................... 0
Oil..................................... 0
Water rates............................. 40 Try and get this metered if it's not already -
for a single person it will almost certainly work out cheaper.
Telephone (land line)................... 0
Mobile phone............................ 30 As soon as you contract finishes look to go SIM only - you can reduce this a lot. I have just paid off my contract which was £160 and gone to a sim only deal of £10/mth. Even though I paid the £160 it still saves me money in the long run
TV Licence.............................. 12.18
Satellite/Cable TV...................... 45.99 Does this include land line and internet as well? You may be able to reduce that down Yes this included my wifi, phone rental
Internet Services....................... 0
Groceries etc. ......................... 160 You can probably shave a bit off this -
meal plan, use up what you have and shop at Aldi or Lidl for a starting point.
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0 No travel costs at all? You walk to work and never travel to visit friends or family? I can walk to work
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 False economy not to have this - you can get it for well under £10 a month. Remember to use a comparison site and go through TopCashBack or Quidco for the purchase.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
TV repayment............................ 25.61
Littlewoods............................. 40 Should this be under debts rather than outgoings? There is only 2 payments left of this
Gym..................................... 40.5 Are there local "budget chain" gyms that you could switch to? I am tied in a contract until January. Not sure how I can get out of it…?
Total monthly expenses.................. 1399.28

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly.. .APR
Loan...........................7699.32...231...... .23
Tesco Credit Card..............2003.17...57........0 Make sure you have a note of when the 0% finishes on this
Natwest Credit Card............1422.34...23.8......0Make sure you have a note of when the 0% finishes on this
Barclay Caredit Card...........1631.36...50........0Make sure you have a note of when the 0% finishes on this
Total unsecured debts..........12756.19..361.8.....-

Monthly Budget Summary
Total monthly income.................... 1,761
Expenses (including HP & secured debts). 1,399.28
Available for debt repayments........... 361.72
Monthly UNsecured debt repayments....... 361.8
Amount short for making debt repayments. -0.08 As shortfalls go, that one's not too dreadful!
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,756.19
Net Assets.............................. -12,756.19
[/tt]

EssexHebridean wrote: »

OK - could be a lot worse - you have wiggle room from the look of it.

Might be worth thinking about having a look at the boost your income board on here for ideas about doing surveys etc to bring in a little more cash. Personally I'd also be looking at cutting clothing purchases back to bare essentials only, bringing the cost of haircuts down a bit (go an extra week between cuts, maybe a subtle change of style that's less high maintenance?) and reducing the amount spent on presents while things are still very tight.

A quick tip for you - on the CC's if those payments are the minimum payment each month, set the Direct debit for that amount going forwards - this means that over time that amount will make slightly more of an impact on the overall balance than just letting it trot along with the minimum payment falling each month. This ONLY applies for cards you're not spending on though.

Silly question perhaps but currently you're not showing OH's £150 towards the debts on the SOA anywhere? Does the income figure you've used include this?

Thank you for all the advice So the EX's £150 is only going to be paid for another couple of months

Tempus01

cs1986 wrote: »

Things that stood out to me:


Gym - £40 a month. I would either find a cheaper gym (council ran ones at leisure centres can be cheaper) or cancel my membership all together. If you want to keep fit, going for a run is free, so is doing a youtube workout DVD in your living room. I am currently tied into a 12 month contract which doesnt finish until January, any suggestions on how I could get out of it?


Littlewoods - £40 a month. Not sure what this is paying for? I had bought some bed linen from here, this debt is £80 so two months and it will be cleared


Groceries - £160 a month. Seems a lot for a single person. When I lived alone and needed to tighten my belt I managed to get food shopping down to £20 per week. If you could get it down to £25 per week that would save £50-60 a month. I became less precious about which brands I bought, took advantage of offers (never paid full price for things like crisps, butter, pizza, biscuits etc, there is always a brand on sale). Maybe look online for some cheap but nutritious meal ideas, I am sure you could get your groceries bill down. I am seeing a guy at the minute so I tend to cook for us quite a bit, this includes my lunch for every day


Cable TV - £46 a month. You may well be in contract here so not an easy one but I pay £34 a month for Now TV. For that £34 per month I get fibre optic broadband, free evening and weekend calls, line rental plus the Now TV entertainment pass which has Sky1, Sky Atlantic etc. That would be a 25% saving for you if you could switch. yes unfirtunately I am in a contract with sky, this is for line rental, tv and wifi. Don't think I cna get out of that deal


Rent is obviously gobbling up a fair amount of your income but I would save moving to somewhere cheaper as a last resort (unless you actually want to move). I agree but I would have to pay fees in order to terminate my contarct earlier. worth considering though if it would save me in the long run


To boost income try ebay or Gumtree. You could also head over to the Boost Your Income section on this site, websites such as TopCashback, Swagbucks, Prolific Academic and Ciao are ones that I use and although they wont make you rich, Ive certainly had a few hundred quid paid to me from these sites. Ohhhh that sounds interesting will def take a look
You could also switch your bank account when one is offering a payout. I got £100 just for moving to Halifax a few years ago, they did all the work, I just filled out a form in branch.


Hope none of that sounds harsh. Well done for taking the hardest step as has been said. Clearing debts isn't easy, it really does require dedication and will power but you will get there, some hugely knowledgeable people on here.

Thanks a million for all your suggetsions. Not harsh at all, I think I need things drummed into me at this stage

Kidder81

I'd echo all the good advice you've received already.

You've had your lightbulb moment. Now comes the difficult part of cutting back on your non essential outgoings to clear the debt asap.

Your rent obviously takes up a lot of your income. Is there anyway this can be reduced? Move in with parent or house share or anything like that?

In terms of immediate things, register an account on topcashback. Go through that for anything you buy, especially anything where there's a contract, like utilities, broadband, mobiles etc. It soon adds up. Put all that money towards your debts.