Needless Debt

Saverooney

Hi all,


After reading some diaries over the last few weeks, I thought this would be a good place to record my journey of clearing some needless debt that I have accumulated. Here's what my SOA looks like:


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.................... 1
Monthly Income Details
Monthly income after tax................ 3950
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3950
Monthly Expense Details
Mortgage................................ 875
Secured/HP loan repayments.............. 435
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 128
Electricity............................. 25
Gas..................................... 10
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 62
TV Licence.............................. 12.5
Satellite/Cable TV...................... 47
Internet Services....................... 52
Groceries etc. ......................... 150
Clothing................................ 150
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 70
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 12
Contents insurance...................... 9
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 25
Entertainment........................... 250
Holiday................................. 50
Emergency fund.......................... 50
Spotify................................. 5
Gym..................................... 22
Lottery................................. 22.5
Netflix................................. 10
Total monthly expenses.................. 2622

Assets
Cash.................................... 0
House value (Gross)..................... 225000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 225000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 187000...(875)......4.33
Secured Debt.................. 31000....(435)......0
Total secured & HP debts...... 218000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2600......26........0
IKEA Finance...................400.......50........0
Sofa/Carpets Finance...........3000......85........0
Total unsecured debts..........6000......161.......-

Monthly Budget Summary
Total monthly income.................... 3,950
Expenses (including HP & secured debts). 2,622
Available for debt repayments........... 1,328
Monthly UNsecured debt repayments....... 161
Amount left after debt repayments....... 1,167
Personal Balance Sheet Summary
Total assets (things you own)........... 225,000
Total HP & Secured debt................. -218,000
Total Unsecured debt.................... -6,000
Net Assets.............................. 1,000
Stoozing
Reproduced on Moneysavingexpert with permission, using other browser.


I applied for a credit card a few months ago to pay for a potential holiday which never materialised, and instead I used it to buy a new iPad, clothes etc which I really didn't need and now I have £2,600 to clear on it.


My monthly expenses are quite high and I need to cut back somewhere (clothes would be the obvious one). I should really be able to pay more off my CC each month but always end up choosing to buy something new instead. Boredom at work is a big contributor to buying things! I need to learn how to have consecutive NSD's rather than thinking that the moneys going to burn a hole in my pocket. Any money saving tips would be greatly appreciated!

mark55man

Hi there

Good to start with a SOA people should be able to help a lot.

You have a good salary so you should be able to make a real difference once you stop buying new stuff.

Like me you are currently paying for stuff that you enjoyed last year, and you need to start using today's money for today's things.

Mortgage's are different. Good luck with your journey and well done on your LBM - you will need to live a slightly more boring life for a bit until you get your head around the new reality but safe in the knowledge that when the non secured debt is busted you will have enough to spend well with out overspending

good luck

adg89

hi Saverooney,


Just dropping in to say congrats on the LBM, I've seen a few areas where you could make savings (to the tune of £2400+ per year).


It's good that you are wanting to pay things off.

Myself & my other half had our LBM a few weeks ago, and we have already made cutbacks and paid off almost 20% of the £9000 debt we have. Cut backs are going to feel painful at first, but hopefully you will get the repayment bug and want to see your debt numbers go down!


I'm subscribing to your thread and look forward to watching the rest of your journey!


- adg89

Saverooney wrote: »

Hi all,


After reading some diaries over the last few weeks, I thought this would be a good place to record my journey of clearing some needless debt that I have accumulated. Here's what my SOA looks like:


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.................... 1
Monthly Income Details
Monthly income after tax................ 3950
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3950
Monthly Expense Details
Mortgage................................ 875
Secured/HP loan repayments.............. 435
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 128
Electricity............................. 25
Gas..................................... 10
Oil..................................... 0
Water rates............................. 0 - do you not receive a water bill? If it's less than monthly, divide into monthly as you should put aside for this
Telephone (land line)................... 0
Mobile phone............................ 62 - are you tied into a contract or could you consider sim-only? Cost would be 1/3 of what you currently pay.
TV Licence.............................. 12.5
Satellite/Cable TV...................... 47 - this seems high - can you make any cutbacks on channels you don't use/need or cut a deal with your provider?
Internet Services....................... 52 - as above, this seems too high. Myself & OH pay £26 p/month for ours with EE - savings definitely to be made here.
Groceries etc. ......................... 150
Clothing................................ 150 - now that you're looking to move forward, do you really want to see 150 per month going to new clothes? That's £1800 a year that could pay off your debt.
Petrol/diesel........................... 100
Road tax................................ 0 - you have a car but pay no tax? Is it in an electric?
Car Insurance........................... 70 - this seems high if you are the only driver. How far are you from renewal? I'd look around for cheaper if you are close to renewal date.
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 12
Contents insurance...................... 9
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 25
Entertainment........................... 250 - can you cut back here? Even £50 would mean you have an extra £600 a year to debt.
Holiday................................. 50
Emergency fund.......................... 50
Spotify................................. 5
Gym..................................... 22
Lottery................................. 22.5 - do you need to play lottery while you are in debt? This could be another £270 per year saved.
Netflix................................. 10
Total monthly expenses.................. 2622

Assets
Cash.................................... 0
House value (Gross)..................... 225000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 225000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 187000...(875)......4.33
Secured Debt.................. 31000....(435)......0
Total secured & HP debts...... 218000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2600......26........0
IKEA Finance...................400.......50........0
Sofa/Carpets Finance...........3000......85........0
Total unsecured debts..........6000......161.......-

Monthly Budget Summary
Total monthly income.................... 3,950
Expenses (including HP & secured debts). 2,622
Available for debt repayments........... 1,328
Monthly UNsecured debt repayments....... 161
Amount left after debt repayments....... 1,167
Personal Balance Sheet Summary
Total assets (things you own)........... 225,000
Total HP & Secured debt................. -218,000
Total Unsecured debt.................... -6,000
Net Assets.............................. 1,000
Stoozing
Reproduced on Moneysavingexpert with permission, using other browser.


I applied for a credit card a few months ago to pay for a potential holiday which never materialised, and instead I used it to buy a new iPad, clothes etc which I really didn't need and now I have £2,600 to clear on it.


My monthly expenses are quite high and I need to cut back somewhere (clothes would be the obvious one). I should really be able to pay more off my CC each month but always end up choosing to buy something new instead. Boredom at work is a big contributor to buying things! I need to learn how to have consecutive NSD's rather than thinking that the moneys going to burn a hole in my pocket. Any money saving tips would be greatly appreciated!

dawyldthing

Electric and gas seems rather low too. Think do I need it or can I do without for 6 months. There’s a lot you’ll be surprised you say no you don’t need it

enthusiasticsaver

According to that soa you have almost £1200 spare income each month and as you have debt and no savings I am guessing that money is leaking out somewhere. As your soa shows lots of opportunities for saving (£150 for clothing!!!!) you should be able to turn this around quickly and have no interest being charged so that is good. Find the missing £1167 first though as you are obviously overspending this somewhere.

natsplatnat

Spending diary time! Any means that works for you, be it a notebook, app or spreadsheet- but you need to track ever single penny spent and withdrawn from the bank to find out where that elusive £1200 is going!! If you can pin down £1000 of the missing £1200 each month, you can clear your debt in under 6 months without changing you current soa... if you can find an extra £500 / month out of the missing £1200 you can be debt free in under a year!
You need to know where it is going!
The good news is you can bust this debt in a reasonable amount of time if you re-purpose this money!!


Good luck on your mission! You can do this! x

D_M_E

£99 for internet and sat/cable tv - when does your contract end - you can get both together as a package for a lot less than this.

Also l;ook at why you have cble tv - do you really need it?

Nothing for water - are you in NI?

mark55man

Saverooney wrote: »

..
<snip>

My monthly expenses are quite high and I need to cut back somewhere (clothes would be the obvious one). I should really be able to pay more off my CC each month but always end up choosing to buy something new instead. Boredom at work is a big contributor to buying things! I need to learn how to have consecutive NSD's rather than thinking that the moneys going to burn a hole in my pocket. Any money saving tips would be greatly appreciated!

So there is a thread (https://forums.moneysavingexpert.com/discussion/5590353/payment-a-day-chapter-18), make a payment a day - so rather than the money burning a hole in your pocket all month until its frittered away then you have a +ve daily experience busting the debt and as for spending,well that is part of old you - that will be gone forever not just put on hold until you clear the debts

plus boredom at work is a real downer - depending on where you work you have different options - one is ask for more work - you may still be bored but too busy to spend (and which is worse bored or broke??) - otherwise spotify/podcasts but be really experimental, or just practice some mindfulness or wellbeing - a few years ago it may have seemed odd but really common in the workplace