New here - Want to give up life of Debt

Mr_Clark1000

Hi there,

Been following some great threads on here over the past few weeks after realising I had let myself get into an amount of debt that I am now uncomfortable having.

For too many years I have been all to happy to buy the latest gadgets on finance, with no problem getting loans, 0% offers etc, whilst still paying out for family holidays and day to day household running.

It was all too easy for me and I kidded myself by thinking that as all my debt is pretty much 0% or very low APR loans, it didn't really matter - that was until I actually added up all the individual components and realised what it amounted to - just over £38,000!!!!

I recently put together a very comprehensive spreadsheet detailing all my outgoings, income and debts, with details about what needs to paid off first etc. Using this I have managed to kill off about £1500 in the past few weeks just by moving some cash around my accounts, whilst keeping out of my overdrafts.

I aim to be debt free within 24 months, I even set up a wooden board in the garden with all these month numbers on which I plan on plinking at with my air rifle as each month passes - something physical to show for each little bit of progress... childish maybe but hopefully a little extra motivation.

So I put together a little SoA to try and show situation, but it may be missing stuff.

Thanks for any comments or ideas!

SOA:
Household Information
Number of adults in household 2
Number of children in household 1
Number of cars owned 2

Monthly Income Details
Monthly income after tax 3010
Partners monthly income after tax 1018
Benefits 0
Other income 0
Total monthly income 4028

Monthly Expense Details
Mortgage 818.87
Secured/HP loan repayments 0
Council tax 205
Electricity 60
Gas 60
Water rates 37
Telephone (land line) 0
Mobile phone 35
TV Licence 12.5
Satellite/Cable TV 9.99
Internet Services 27
Groceries etc 400
Clothing 10
Petrol/diesel 50
Road tax 27
Car Insurance 50
Car maintenance (including MOT) 40
Childcare/nursery 250
Other child related expenses 80
Medical (prescriptions, dentist etc) 10
Pet insurance/vet bills 30
Buildings / contents insurance 15
Presents (birthday, christmas etc) 20
Entertainment 9.99
Holiday 100
Emergency fund 0
Total monthly expenses 2357.35


Assets
Cash 300
House value (Gross) 330000
Shares and bonds 0
Car(s) 11500
Bikes 3000
Computers / iPad etc 2350
Total Assets 347150

Unsecured Debts Debt Monthly Payment APR
Barclays Loan 8819 203 0
Santander Bike Loan 3207 106 0
Sofa 449 18 0
Virgin 11594 137 0
Baclays CC 6287 150 0
Very Buy Now Pay Later 0% 925 0 0
first direct cc 2655 83 0
paypal credit 3065 94 0

Total unsecured debts 37001 791


Monthly Budget Summary
Total monthly income 4028
Expenses (including HP & secured debts) 2357.35
Available for debt repayments 1670.65
Monthly UNsecured debt repayments 791
Amount left after debt repayments 879.65

Personal Balance Sheet Summary
Total assets (things you own) 347150
Total HP & Secured debt 210000
Total Unsecured debt 37001
Net Assets 100149

MallyGirl

2 adults and a child should be able to eat for a lot less than £400 per month so that is a good place to start - plan meals, cook from scratch, shop at Aldi/Lidl, audit the cupboards and freezer and see what you can eat up before buying more

TommyTBFC

Hi Mr Clark,

Firstly well done for admitting that you have an issue. The Penny dropped for myself only a few months ago and I entered into a DMP and I am in a better place for it so congratulations.

It sounds like you have thought all this through and got a time line of 24 months, I wish you the best of luck buddy.

Although I’d like to echo the comment above from mallygirl the grocery expense is rather high at £400. Between you and your partner and child that’s £133 per week. This will be a good place to start cutting back.

Mr_Clark1000

Thanks for the replies,

Yes the 400 does seem a bit high but I’ve included a little contingency in there, I generally put 100 on my Monzo card once a week and use that to cover food, the odd pint at the pub and any other odd things that might be needed.

My initial plan was 24 months, according to my calculator I’m down to 22 months and might even be better than this as no council tax the next few months which will be a big help.

Any other big ticket items that come up I will be considering selling off things to cover the cost so I can keep to my payment plan, be ruthless about it.

It all adds up on paper so just need stick with it and not lose my job!

Thanks all for the encouragement...

theoretica

While your food looks high, clothes and entertainment look low, so I guess you will do some juggling there.


Do not let the Very account charge interest!

Mr_Clark1000

I've got until end of November to get rid of that one, it's one thing I've been good at over the years of bouncing one debt to another and never really paying interest on them (apart from 2% transfer fees). I've really had enough of worrying about when these offers come to an end, so hopefully this is the end of it all!

Chandelier.

Is all your debt on 0% CCs or promo offers? Remember to keep a close eye on when those offers end.
What is the plan going ahead on tackling your debts? Will you throw all your surplus towards the card which 0% offers first or split them between all?

Your budget looks as if it could do with a few tweaks here and there. Do you really only spend £9.99 a month on entertainment? You could also look into building up an emergency fund, start small and increase it as you go along. I just think some things within your budget look tighter then others and wonder whether it is truly realistic.

Mr_Clark1000

All the CC debt is 0% and I hammer the ones that are running out on these deals first and foremost.

In terms of entertainment, I just put down what I pay for spotify, other than that, going out for drinks or any meals would come out of my 400 allowance for groceries... I haven't got separate pots for groceries / going out as I don't spend much time going out nowadays...

poppy10_2

Mr_Clark1000 wrote: »

Assets
Bikes 3000
Computers / iPad etc 2350

Would you really get £3000 for those bikes or £2350 for the computer/iPads if you had to sell them? Assets are only worth what someone will pay you for them, not what you originally paid for them

Fireflyaway

I love the idea of shooting targets ! Never heard of that but sounds cool!
I agree that food is a bigger outgoing than need be. we are a 2 adult, one child household and manage on around £250. Aldi all the way!
Good idea to get an emergency fund together as well. Just so you don't have to interrupt debt payments if something does crop up. I
I've learned not to borrow based on income as it can change and leave you in a mess. The fewer monthly commitments you have the safer it is.

ToeDipper

In terms of entertainment, I just put down what I pay for spotify, other than that, going out for drinks or any meals would come out of my 400 allowance for groceries... I haven't got separate pots for groceries / going out as I don't spend much time going out nowadays...

If the SOA is based on total household income, is the rest of your family's entertainment also covered by the £400? It's not just the odd beer for you that needs to be accounted for - how about your partner's social spends, or trips out as a family?