Debt free in 3 years...? here's hoping for me and my boy

HopefulHumphrey

Hello
Right, so last month I decided I needed to get my debt in order. I am a single, working mum with a son (10 months old) and my debt is currently crippling me.
After much pondering over an IVA I decided to go it alone as I did not want to cloud of an IVA hanging over me when I could have potentially paid off the debt and I also resent paying another lender extortionate fees when I am already paying lenders extortionate fees by way of interest.

So here is my debt situation:

Pay Day Loans: 1250
Credit Cards: 5250
Hire Purchase: 8300 remaining
Catalogs:1500
local council: £800 benefit over-payment - I am disputing this
Mum: who knows

These are rough figures as I am writing this without my finance sheet in front of me, but I know to the nearest 100.

Much of my debt was amassed whilst pregnant and on maternity leave. I don't want to get the violins out, but whilst pregnant my partner left me in a privately rented flat, of which I was then made homeless as I couldn't keep up with the rent on my own and the landlord was unwilling to accept me with a top up from Housing Benefit. I then found a home via intermediate rent, which was unfurnished for me and my then 6 month old. As I was on maternity pay my mum paid the first few months rent for me whilst waiting for housing benefit. But I furnished the flat via credit.

My mum has been an absolute superstar, but is a low earner and has helped me out by using most of a redundancy payment that she received. Knowing this makes me feel sick to my stomach and I will pay her back!

So what have I done to help myself so far...?

1. Got all my debts together in one place so I know whats what
2. Returned to work earlier than planned and upped my hours (was only meant to return part time)
3. Contacted all of my creditors and asked for a temporary stay of execution and agreed manageable repayments to be reviewed
4. Made an agreement to myself that as soon as I was able I would get rid of my HP car (February 2018)

The 3 year goal is to give me some gravitas to hold onto. Some quantative goal to measure myself and hold myself accountable to. I also see it as realistic. I am a good earner. My salary is decent. This debt was amassed during a hard time (OK, some of it was amassed partying and living it up in a life gone by).

Today is my first day of repaying my debts under the new agreements. It is a low pay month for me as I had to return for 2 months at 3 days a week before my employer would increase my hours. This means that as well as a low pay month, as I work in arrears, I will have to pay the additional days childcare out of my salary before my increased working tax credits kick in. Which is going to be a killer.

However, I am hoping that the new lunch box my mum got me will come into use and doing some batch cooking to avoid pit stops in Asda on the way home will help. There is very little else I can do to cut back this month, so hopefully that will be enough.

Any other suggestions as to how to survive the month are welcomed!

Signing Out

bexster1975

Hello

Welcome to the board! :j

I would suggest a statement of affairs (SOA). I will post a link at the bottom. It will allow you to see what us what, including the interest rates on your debts.

I think a time limit as a goal is a great idea. Your boy Wong gave even started school by the time you are debt free!


http://www.stoozing.com/calculator/soa.php
Bexster

zippygeorgeandben

Yes - do an SOA. You sound different to other posters looking for a way out. You're taking responsibility despite having to deal with x, y, and z

Tempus01

Welcome to the forum. I only joined last week but it has been a great week here. The non judgemental support is amazing!!! I'm probably three years away from being debt free too but small changes do help. Suscribed to your thread, excited to see how you do. Good luck

Kidder81

Well done on facing up to your debts. That's often the hardest part. Do your SOA for some great advice.

HopefulHumphrey

Thank you for all your words of encouragement. Going to try an SOA and will let you know how I get on.

EssexHebridean

Positivity and a plan - great places to work from! well done for looking to get things under control and for taking such solid steps to get moving on it. Going back to work earlier than planned can't have been easy at all so well done for accepting that needed doing too.

Get that SOA done and posted and we can take a look.

enthusiasticsaver

Well done for being pro active. I would use this month to live as frugally as possible as you have a part time wage but full time child care to pay for before the tax credits kick in. Use a spending diary and think about every penny you spend and whether it is really needed. Obviously essential bills like rent, utilities, food need paying for but for all else (entertainment, clothes etc etc) I would not be spending on this until you have a normal wage coming in and a budget and debt repayment plan. Presumably you have child benefit which can be used for nappies for your son and other essentials.

Food wise you would do better going to Aldis or Lidls than ASDA. Meal plan, bulk out meals with veg, stop snacks etc apart from fruit and use cheap household stuff for this month. Use the toiletries you have and no haircuts this month. Hopefully no gifts either. There are a few challenges which might be handy. Take leftovers or packed lunch to work and no buying coffees or lunch out. You would be surprised how frugally you can live for one or two months only. Then when you have your tax credits and full time wage you can set a sustainable budget going forward.

laurenh1

Well done you on getting to work on this. The good news is that it is all fixable, even if it doesn't feel like it. Defo do a SOA and then you know where you are, and also, as other people have suggested, a spending diary, making sure you take note of every single penny that you spend, it may well be that at the end of the month you are surprised by the amounts you have spent, maybe not, but either way you will know where you are. Once you have done those you can start looking at how to cut back also consider anything annual or one off, such as Christmas, so that you can start to put away for those too and include them in your monthly total. if you haven't already, phone your pay day loan company and ask them to freeze the interest and tell them you will pay them a small amount each month. I hate hate hate them, and what they do to people already struggling! Good luck to you and your boy and well done on making a start to change your situation

HopefulHumphrey

I'm back and feeling more miserable than ever
OK - that's a lie, for the first time ever my son has gone to sleep in his cot without screaming.
But - that means that I was able to finally do my SOA and it makes for quite horrific reading, because it shows I AM BROKE.
I am very much in the red :mad:

I absolutely need to get rid of my car as without it I will be SO much better off, but that isn't until February. PEOPLE, avoid HP!!
I have based my SOA on my full time earnings and hoped my situation would improve. Which it has, but not by taking me into the black as I had hoped.

This month is pretty bad so far. My mum has bailed me out for next week's childcare bill and my uncle has bailed me out in terms of grocery shopping. I'm not sure how I will be getting into work, but I will have to come up with something.

Right - before I go off on a full on rant - here is my SOA. I have estimated things, like groceries (which include baby formula, nappies etc), clothing (for the baby and me if desperate), birthdays and entertainment. Car maintenance I have estimated for the year and divided by 12. Oh and finally, my TV, internet and phone line are a combined bill. As soon as I can in April this will be reduced to just phone and internet to bring this down.

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary Amount(£)
Total monthly income 2,868.43
Monthly expenses (incl. HP & secured loans) 2,999.16
Available for debt repayments -130.73
UNsecured debt repayments 166
Amount short for making debt repayments -296.73
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 0
Total Secured & HP Debt -12,900
Total Unsecured Debt -8,608.9
Net Assets -21,508.9
Household Information

Number of adults in household 1
Number of children in household 1
Number of cars owned 0
Income, Expense, Debt & Asset Details

Income Amount(£)
Monthly income after tax 2155.43
Partners monthly income 0
Benefits 413
Other income 300
Total monthly income 2868.43
Expenses Amount(£)
Mortgage 0
Secured/HP loan payments 370.3
Rent 808
Management charge (leasehold property) 0
Council tax 148.55
Electricity 32
Gas 19
Oil 0
Water Rates 0
Telephone (land line) 0
Mobile phone 10
TV Licence 29.4
Satellite/Cable TV 57
Internet services 0
Groceries etc. 200
Clothing 20
Petrol/diesel 40
Road tax 2.5
Car Insurance 65.21
Car maintenance (including MOT) 20.9
Car Parking 10
Other travel 203
Childcare/nursery 843.3
Other child related expenses 10
Medical (prescriptions, dentists, opticians etc.) 0
Pet Insurance/Vet bills 30
Buildings Insurance 0
Contents Insurance 0
Life Assurance 0
Other Insurance 0
Presents (birthday, christmas etc.) 40
Haircuts 0
Entertainment 40
Holiday 0
Emergency Fund 0
Total monthly expenses 2999.16

Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 0 (0)
Hire Purchase (HP) Debt 331.3pm (12000)
Hire Purchase 39 (900)
Secured & HP Debt totals 12900

Unsecured Debt Description Debt(£) Monthly(£) APR(%)
Vanquis 1pm (3145.34)
Capital One 30pm (2308.75)
Wonga 20pm (325.4)
very 43pm (1300)
next 20 pm (450)
Sunny 20pm (331.2)
Quick Quid 15pm (598.4)
Barclay Card 17pm (149.81)
Unsecured Debt totals 8608.9

Asset Description
Cash 0
House Value (Gross) 0
Shares and bonds 0
Car(s) 0
Other assets (e.g. endowments, jewellery etc) 0
Total Assets 0

Arleen

The very first thing is that you will need to run a spending diary, as you cannot get full and proper financial picture on estimates. So start it today and run it for a full month, noting where every single penny is spent.

Couple easy wins based on your estimates:

Other travel: that is very high, especially as you already have a car, what is it and can there be less of it?

Groceries: 200 is very high, even with your son things included.

Pet insurance: cut it, it's really something you don't need as typical vet bills are nowhere near high enough to justify it.

TVlicence: why is that almost 30 pounds? It should be 12.25