*sigh* this may take a while 20 December 2018 at 11:56PM edited 30 November -1 at 1:00AM in Debt Free Diaries 772 replies 70.8K views

ohdearhowdidthathappen

HI

I've been using this site for years, although I haven't posted for a while and my account seems to have been lost! However, I've decided to accept that as a clean slate :-)

I'll post an accurate SOA over the next few days... but the short version is my husband and I have a nice income between us (about £100K) but we have 5 children and a big house to run and we're not good at saving before we spend. We've just done a massive extension on our house and find ourselves in a large amount of debt circa £45000. We can service this debt, but we'd like it gone asap.

I'm hoping by doing a diary, it'll keep me focussed

pidge04

Good luck with your diary and your debt busting!

Can anything be done to lower the grocery bill? There are lots of you at home I see but can that be your first point of attack?

enthusiasticsaver

Do you actually have £558 spare each month? Even though you have allocated £100 to emergency fund do you really have no savings?

I think your first action should be a spending diary so you can see where that £558 is leaking away and which categories you are overspending on. Clothing, groceries, presents are all high although obviously you have a large family so that might account for it.

ohdearhowdidthathappen

Thanks for your comments

I made a rookie error on my SOA; I put my income after childcare costs and then put childcare as an expense, so we should actually have £858 a month spare. I've now edited the SOA to reflect this

It’s hard to know if that’s accurate as up until last month we were ploughing all our cash into finishing the build. I use the term ‘finished’ loosely as there’s a lot of painting and flooring left to do!

My SOA figures are accurate in terms of fixed outgoings; bills, mortgage etc but other figures are based on what I feel we should be able to stick to. My children are aged 3-15, all expensive in their own way!

I agree food, entertainment and clothes are high, I’m hoping they’re worst case numbers.

We could just add the debt to the mortgage, but I think we should be able to clear it ourselves, especially as most of it is interest free. My main concern is the Virgin card as the 0% runs out in September.

Christmas is an expensive time to try and budget, especially as we’re hosting guests for 6 of the next 10 days. I’m just trying to be mindful and cut costs where I can

beanielou

Happy shiny new diary

ohdearhowdidthathappen

No, we currently have no savings :-( all used up on building work.

We managed a NSD day today, first in a long time!

I'm currently weighing up whether to do more hours at work... it sounds like a no brainer, but it's not. I work 3 days a week across 2 jobs. When I do the sums for working a 4th day, I don't keep much of the money because of deductions (especially childcare!). It would only be an extra £150 a month.

Last year, I switched one of my working days to a Saturday to save on childcare. It definitely helped, but I'm loathe to now do a 3rd weekday on top. Tricky! Think I'll give it a few months and see how we do on our existing income

ohdearhowdidthathappen

Hope everyone's having a good Christmas. Ours has been lovely so far.

I had to work Christmas Eve, but now have until 7th January off, absolute bliss. Managed not to spend anything the last few days and am avoiding the tempting Boxing Day sales emails so far!

I think I'll use this diary to monitor my weight and drinking too, both have got a bit out of hand, much like the debts. I've noticed that's a pattern many have on these boards.

Weight wise, I'm not overweight, my BMI is 23. However, I've put a stone on over the last year and would like to shift that over the coming months.
My drinking is, again, not a massive issue but it's crept up over the last 12 months. On average, I drink 2 glasses of wine a night, although I ensure I have 2 booze free evenings a week.

I'm thinking if I cut down on the booze and food, it's a win win. I'll lose weight, feel healthier and save money in the process :-)

mark55man

Hello - good luck with your plans for the year. I was in a very similar position (only 4 little cost centres) a few years ago you will really appreciate the benefit if the building works.

couple of observations - a SOA shouldnt be your budget it should be what you actually spend - different things - but if you do as EnthusiasticSaver suggests you will be able to update as time goes on

the second is that its very easy to get bored with saving / scrimping so you need to pull the belt tight, but not ridiculously so. However really your target must be to change your spending mentality so you naturally spend less and won't revert back when you've cleared the debt

finally with a large family don't underestmate the power of small savings - one family coffee out a week could be £100 a month - or a sweet treat each every day could easily be similar. A bit of ingenuity here could make a big differnce

finally finally - it is rare for people earning £5K to be on here, although your lifestyle is entirely your choice - just to say I have seen this cause misunderstandings - in my view everyone needs to be able to save and target their debts and get advice and support, and learn from each other.

enthusiasticsaver

Maybe start your spending diary from January if you were doing home improvements and now hosting over Xmas plus Xmas expenses this is obviously not a normal month. An soa should be what you spend rather than what you aspire to though. If the soa is correct though £858 spare each month would help you reduce the debt and build up the savings which you should definitely address. I am not sure how secure your jobs are or if you have any sort of 8ncome protection but with a large mortgage and no savings you would very quickly be in difficulty.

Turning unsecured debt into secured by sticking it on your mortgage would be very unwise. Firstly debt consolidation never works in reducing debt. Without addressing the cause of overspending people who consolidate usually end up with the consolidation loan and then carry on spending on credit effectively meaning the debt increases. Secondly it is much more expensive as it takes a lot longer to clear and instead of being 0% a loan, secured or unsecured would charge interest which in some cases is quite high depending on what deals are available to you. Thirdly you risk losing your house if you default on repayments.

pidge04

Well done for your NSD and for steering clear of the sales.

ohdearhowdidthathappen

Thank you, really helpful insights and advice.

I'll definitely look at a spending diary, I'd imagine it'll make for interesting (depressing?) reading. We definitely have a constant drip...drip pattern out of our account. Today, I had to get some medicine for kids' various ailments, batteries and a couple of bulbs.... £22! And asda did stupid subs so I had to pop to the shops to replace, another £8. Those things all add up.

I agree with a large family little treats end up costing too, I only had 3 of them with me today and usually I'd get them a hot chocolate each and wouldn't get change from a tenner. I managed to avoid it today by pointing out how much chocolate we already have in the house.

My job is very secure, I work for the NHS as a healthcare professional, I undertook extra postgrad training a few years back and it qualified me for a very sought after role. My colleague recently decided to locum and now earns £40 an hour, I wouldn't want to locum through choice, but I would if I had to.
My husband's role is arguably less secure, but he has a 6 month notice period and he could find another job relatively easily, albeit for potentially a slightly lower salary.
I definitely agree our lack of savings is a cause for concern and once our debts are clear, we need to build up a pot.
Before the building work, our debts were £3k, so most of it stems from the build.. We made the decision to 'only' borrow £100k for the work, which was a bit daft as we knew it would be more.... it ended up being £135k. The other £4k debt was because we paid for my dad's funeral, my mum wasn't in the financial position to afford it and my siblings both refused to help :-(