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

laurenh1

As I said, that's just what I do.

HopefulHumphrey

Thank you.
I think I am going to start a new savings account for my emergency fund.
I have 2 bank accounts at the moment; so I am going to try and get it so that one is a spending account and one a bills account.
I just need to get to a point where all my funds aren't going on bills.

I have looked at the outgoings vs income for this month and I am £211 short before I have brought anything to eat! And, HMRC have kindly cut my child tax credit in half because I am at work full time.
Thanks HMRC, Thanks :T
I also have my little one's first birthday and christening this month (both booked and invites sent out before I took stock of my situation).

HOWEVER, there is light at the end of the tunnel.
I am hoping that I will be cut a bit of slack if my housing provider accepts my letter of notice on the flat. I should be reimbursed for 1 weeks rent as well as get my deposit back (or some of) and my rent account is in credit thanks to a !!!! up with housing benefit when I was on maternity leave (don't worry, it as money I was entitled to but did not apply for).
If I get this money back I will HAVE MONEY IN MY POCKET OMG!:rotfl:
Although not for long as I will give as much as I can to my mum for bailing me out over the last few months.

So, what are my goals for this coming months pay:
1. Start spending diary - I am actually starting this tomorrow as I think a week of broke-dom will show me that I can survive on not very much (hopefully)
2. Confirm with Wonga and Quick Quid my repayment plan - I still have not done this as I need to send the back some more information
3. Start repaying my benefit overpayment - separate to the !!!! up noted above. I have some days off at the end of October so I will probably just go down to the council
4. Leave the flat and get all the money I am owed by the housing back!
5. Start emergency fund and clearly define accounts - bills / spending / emergency fund / savings jar for Christmas at home
6. Sell bits on e-bay

I hope everyone else has a positive payday!

HopefulHumphrey x

laurenh1

Ahh good for you getting everything in order its a pretty good feeling to get your ducks in order, especially when ends start meeting. I was impressed when I was paying all my bills let alone when I managed to save anything.

Planning for xmas is a good shout as is putting things to one side if you see good deals and can afford it xx

zippygeorgeandben

Just want to say keep it up! It's nice to read a thread for a change where you aren't blaming debt on x, y, and z! Procrastinating does nothing for your mental health! Keep on going!

EssexHebridean

Good work so far and a great idea to start planning ahead for things now!

What are your plans for keeping the spending down on the little one's birthday and christening celebrations?

The money back from the housing people - I get why you're thinking about giving this to your Mum - however, might you be better - with her agreement - to make this your emergency fund, meaning that you don't then need to be putting aside as much for the next little while to build this?

Good idea to set things up so all your bills come from one place for sure - and all your spending from somewhere else- aside from anything else this means that at the end of each month you'll have a clear picture of what is left over from savings made on your discretionary spending - and that in turn means it's easy to see what can be paid to debt. :T

System

Okay - here's my two penneth

HopefulHumphrey wrote: »

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 Considering your sizable income, this isn't too bad.
Rent 808 This is expensive - I'm guessing you live in an expensive area. Can you commute further out.
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 This should be 12.12?
Satellite/Cable TV 57 Get rid of this?
Internet services 0
Groceries etc. 200 You could reduce this a little.
Clothing 20
Petrol/diesel 40
Road tax 2.5
Car Insurance 65.21 With respect, how come you are paying this monthly with a wage as considerable as yours? Also, this is equates to insurance of £800 a year. How old are you? No claims etc?
Car maintenance (including MOT) 20.9
Car Parking 10
Other travel 203
Childcare/nursery 843.3 Including travel costs you are spending £1400 just to go to work...thought about not?
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

laurenh1

I know car insurance is cheaper bought annually but thats something to work towards.. I think looking at your financial situation it seems unlikely you will ne able to pay that annually for a little while, I agree that it seems dear though, have you compared it xx

Also, are you eligible for tax free childcare? You get20 percent back on childcare. Its a bit hit & miss but if you're getting no help I would apply. Its plagued with technical problems but if you're getting nothinh any way you have nothinh to lose! My account doesnt work but I send them my invoices every month and they reimburse me.... Eventually x

dadof1

HopefulHumphrey wrote: »

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

Hi sorry to hear about your financial struggle I myself have had a hard financial struggle, some of it was me being irresponsible, I noticed you mentioned asda in your thread, do you often get full week shopping from there? I used to but now I use ALDI and LIDL it's amazing how much you can save and still fill your cupboards compared to shopping in ASDA. Just a little friendly suggestion for you

EssexHebridean

How's things going HH?

HopefulHumphrey

Hi All
Sorry I have been so quiet. Sorting out the little one's birthday and christening and planning on moving back to mum's, all complicated by getting ready to start a new job have kept me off of here.


So 1st birthday and christening both went without a hitch. I had saved for the birthday party since I had my baby. I got an Asda Christmas Savings card and topped it up with £2 every time I went in. It meant that with the total cost of food, drinks and activities for the kids coming to £70ish that I only had to pay £20 cash. I have carried on with the Savings card to help towards Christmas as Asda do some great gifts and toys.
I mention Asda a lot as it is literally next to where I live. As I have no close parking and live so near I tend to do little frequent shops as opposed to a big shop somewhere that might be cheaper. I try and make use of the price-guarantee vouchers wherever possible.


My generous mother paid for the Christening. We hired an area in a pub. Provided buffet food for half the guests with the understanding being that people brought their own drinks from the bar and if they wanted a proper meal to get that from the bar as well.
This helped to keep costs down. Just because it was a gift from my mum I didn't want to take the pee.


The good thing was that baby boy was spoilt rotten and is stocked up on toys and clothes for a good while now.


So now I am 3 days away from moving home. I did have a shocker of September and October so far as expected with full time child care on part time money.
Unfortunately I cant go for the discounted childcare as it will have a negative impact on my already dwindling child tax credits. Which is the same with the childcare voucher scheme. Every time there is a change to my tax credits I compare the overall savings I could be making to check where I am better off.
So I had to dip into my baby boy's savings account to pay for a couple weeks of his child care, which I consider to be one of my lowest points on this journey so far.


However, things are on the up. My mum (I seriously do not know what I would do without her) came into some money (earnt, not won) and gave me a chunk of change to pay off some debts! So I have cleared all of my pay day loans!
Bye Bye Sunny, Bye Bye Wonga, Bye Bye Quick Quid. I have also been able to say goodbye to the remainder of my Barclay Card bill (which I have been paying off since about 2007). I am SO relieved you can't believe. I am now trying to Snowball my other debts.


Once I have moved into my mums I will do an updated SOA and use that to set up higher repayments with my remaining creditors as I am still on token payments. I am also currently fighting with my local council over housing benefit repayments, which I will post separately about when I have a better picture on a different thread as I think it will be useful for others to know. I hope to clear one of my catalogue debts when I get my deposit back on my flat.


In terms of car insurance as a couple of people have asked.. I live in a part of London that backs onto the North Circular which results in a high incidence of accidents, thus hiking the price of insurance.


So that's an update so far. A new and hopefully improved SOA to follow over the weekend.