3 kids and 9k debt... working our way to 0 debt by 2020

glitterjunkie

Hi, I'm Glitterjunkie, I am 31 and live with my husband and our 3 kids aged 5, 2 and a baby. I've used the MSE forums for years at all stages of my life, from being a student and earning extra cash through mystery shopping, to saving for our first house and being in the lucky position of being able to overpay the mortgage for a while. However this is the first time I've ended up on the Debt board! I've strted this diary mainly as a place for me to keep track of what we're doing to repay the debt and our progress.

We're around £9k in debt which has all been accrued in the past year, £5,500 of which is on credit cards and £3,700 is owed to my mum. This is a result of a few factors... £1,500 is from an awful month we had where everything broke in the space of a week (washing machine, TV, car), £1,200 is the remainder of a car loan off my mum and £1,600 of it is a very expensive bike my hubby bought on the credit card 🙈 The other £4,500 is just general spending due to being on maternity leave for the 3rd time in 5 years, which is a £700 drop in income each month, we're just spending more than we have coming in every month. I have just applied for a final balance transfer of our currrnt credit card, then we're going to get rid of it and go back to cash so as to stop further temptation, as all the whole we have CC's the debt is just going to keep on growing isn't it?

We don't have holidays, Sky TV or the internet, so we often feel a bit hard-done-by and complain that we don't spend anything... but having had a good look at our finances I have realised we are extravagant in other areas, mainly running 2 expensive cars and mobile phones, and buying stuff for the kids, expensive clothes, presents, trips to soft play centres can easily cost £20 a time etc.

We need 2 cars due to my husband being a shift worker doing 12 hour shifts that start and end at 7am/7pm and are also unpredictable often ending late so can't rely on public transport... so he needs the car to get to work, while I also need a car as I have the school run and nursery drop off in a morning. We do own both cars outright, although mines getting old and could do with replacing next year (going to start costing more in garage bills) so we're looking at possibly leasing a new one.

The mobile phone bills are ridiculous and I really want to cut these but we're both locked into contracts 😭 need to check the end dates of them and see when we can reduce.

I don't really know where else we can reduce... Were already on the cheapest gas and electricity using MSE Energy Club. Any other suggestions appreciated!

I am hoping that by throwing every spare penny at the debt it can be paid off by Summer 2020. We don't have much spare at the moment as I'm still on maternity but I'm good at selling on FB/eBay so make a bit from selling the kids outgrown clothes etc, the baby has a lot of designer stuff (I know, I know!) that I can make quite a bit back from selling once she's too big for it. I do have an account as a rep selling homeware products, and can make about £50-100 commission a month if I try (don't always try very hard so don't always earn each month). Then I go back to work in May and we should have around £350/month extra to start repaying the debt properly.

That turned into an essay! I've put our SOA below and looking forward to keeping track on here xx

etStatement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 640
Partners monthly income after tax....... 1600
Benefits................................ 192
Other income............................ 0
Total monthly income.................... 2432

Monthly Expense Details
Mortgage................................ 752
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 153
Electricity............................. 139
Gas..................................... 0
Oil..................................... 0
Water rates............................. 47
Telephone (land line)................... 0
Mobile phone............................ 104
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 450
Clothing................................ 100
Petrol/diesel........................... 100
Road tax................................ 22
Car Insurance........................... 54
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 150
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 21
Contents insurance...................... 0
Life assurance ......................... 39
Other insurance......................... 22
Presents (birthday, christmas etc)...... 80
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2360


Assets
Cash.................................... 0
House value (Gross)..................... 230000
Shares and bonds........................ 0
Car(s).................................. 22000
Other assets............................ 3000
Total Assets............................ 255000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 177000...(752)......1.75
Total secured & HP debts...... 177000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin CC......................1000......20........0
MBNA...........................1700......45........0
Barclaycard....................2500......59........0
Halifax CC.....................1280......25........0
Total unsecured debts..........6480......149.......-


Monthly Budget Summary
Total monthly income.................... 2,432
Expenses (including HP & secured debts). 2,360
Available for debt repayments........... 72
Monthly UNsecured debt repayments....... 149
Amount short for making debt repayments. -77

Personal Balance Sheet Summary
Total assets (things you own)........... 255,000
Total HP & Secured debt................. -177,000
Total Unsecured debt.................... -6,480
Net Assets.............................. 71,520

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

Storm89

Hi I have a similar goal and want to be debt free by 2020 - aiming for December 2019 so can start the decade debt free. We have around £16k though. we also spend only £52 on gas and electricity don't know if you've looked at switching ? we're with a company called Flow. I've budgeted £40 a month for clothes and also spend between £60-£65 a week on the food shop (which includes nappies and cleaning stuff etc). Good luck on your journey xx

Mumoffourkids

Hi, Just looking at your SOA, I think you can probably cut your groceries slightly. I have six kids and am on my own, but even so have a larger family than you and I have a budget of £433 for food each month. My two youngest are still in nappies as well.

That budget includes all cleaning stuff and toiletries as well as packed lunches for four kids. I tend to do an online shop on a Monday for about £60 to £70 and then top up with bread, milk, fruit and veg during the week. I meal plan each week and only get food which is on my list. I also look for yellow sticker meat when I do my top up shops which helps keep down the cost of meat.

I think your clothing budget is quite high as well. I budget £150 per month but that has to include school uniform and shoes for four kids who seem to be growing continually! Saying that, their out of school clothes I tend to buy from primark as they grow out of them before they wear them out. The kids tend to get clothes for birthdays and Christmas as well as they really don't need anymore toys!

Also what are your other Child Related expenses for?

But saying all that you have a date when your income will go up and you can look forward to that. Also good luck with your debt free journey!

Mindfulness

Tonight I’ve also finally totalled up what our current debt is and discovered we are also around the 9k mark.
It’s a shock, a BIG shock. I knew we had debt, but not that much.
So I shall be eagerly following your diary.

We are a 2adult household with 2kids.

Good luck on your journey

enthusiasticsaver

Maternity leaves are often a cause of debt rising and presumably you will have childcare costs rising when you go back in May until your 2 year old gets their free hours?

£6500 plus the debt to your mum is not phenomenally high but although you say you don't spend a lot having three kids is expensive in terms of food, cloth8ng, entertainment. However it gets more expensive as they get older with school trips, after school activities etc etc so sorting this now should be priority.

I think your soa could be trimmed a little with groceries and clothing. As you say the mobile phones cost is huge so that is where your spare money is going. You have no savings though which is a worry and would have removed the need to borrow from your mum when your car broke down etc. Also having two cars is expensive. Although you say you save £50 a month for car maintenance you have no savings so I am guessing this is an aspirational soa rather than accurate. You need to claw back the shortfall to stop the debt rising further so I would suggest a £25 cut on groceries, presents and clothing until May then find the odd £2 by selling stuff or reducing entertainment to £48. Any spare money you make by selling bits etc put into an emergency fund. Once you are back to work you can use the extra £350 to put back on your disposable income budgets, overpay the debt and build up savings.

It will be tight but if you don't sort this now it will very quickly escalate as you have two quite expensive drains on your income (three kids and two cars) and as you say your car also needs replacing which is another cost you will need to find the money from. I would wait until those ridiculously high mobile phone contracts are finished though. You could save £80 straight away by going sim only.

Mindfulness

How have you been getting on glitterjunkie?

I’ve been busy crunching numbers this side and seeing where savings can be made. First month in FOREVER I’ve been looking at the out going properly. I’m horrified by what we have spent on food; and that’s being careful. Dread to think what it would be months I paid no attention.

Anyhow, just dropped in to see how you are getting on and off some support/motivation