Untangling our financial disaster

getmore4less

Another strategy that can help a lot is to break the project up into small chunks and deal with them individually.

Use the SOA to track the progress of spend categories as you deal with each one.

I would start with the cars, have a good think about what they really cost and any bill that might be coming up, eg how long will the tires last when is the next MOT/Service and when will you needing to replace them.

Next is that entertainment budget, do an analysis to see where you get best value and what you can drop completely or cut back on, with 2 kids it won't go to Zero but might find there are weeks when you can spend a lot less than you do now.

Groceries often that is just a case of better planning and changing shops to get the first big hit, then over time you start to squeeze as you fine tune.

holiday, are you going to have one this year plan it now and start putting the money aside, or skip a year

Clothes , do the audit and work out budget for this year.

utilities regular review

Forward planning and bulk buys.
work out what you use and what the cheap prices are for them, bulk buy when cheap with 4 in the house some regular buys will result in significant savings.

The other advantage is they come off the regular shop so you don't end up impulse buying because you think you need some.
Also many are bulky and heavy so you can either do by car or have delivered.
examples are toilet rolls, tinned foods, washing up liquid, washing powders, toiletries, teabags, coffee.....

Use hotukdeals the MSE deals forums and supermarket checkers.

An example is my target for teabags is 1p each and I get close with ty-phoo they are regularly on offer for 240 for £2.50 try to keep stock levels at 6m-1Y

Dishwasher tablets target is 5p, that is getting harder.
List the things you use a lot of and price watch then bulk buy

Sea_Shell

Good Morning RtC. I've subscribed to your thread, so just wanted to let you know that i'll be cheering you on from the sidelines.

This is fixable, as others have said, as long as you stay strong and don't let the debt busting get you down. There will be hard days when all you want to do is throw in the towel, but if you keep your eyes on the prize, you'll get there.

Good luck!!

Readytochange

Uo early today. Feeling much better now antibiotics have kicked in and also feeling more positive again. I’m generally a positive person but I’ve spent the last few days in bed feeling ill, so I’ve been over thinking.

Went through the stepchange debt remedy again and it confirms that a DMP is not for us. Selling the house won’t be an option either as neither of us are willing to end up debt free but paying rent.

We had a good talk last night, I’m actuakky really thankful that we’re both on board as I know this isn’t Always the case. I’m the one that sorts the Payments etc, but dh is totally on board.

We both agreed that we just need to knuckle down and throw around 2k at the debts each month. Trying to forget about the interest until we can do something about it.

getmore4less

Readytochange wrote: »

We both agreed that we just need to knuckle down and throw around 2k at the debts each month. Trying to forget about the interest until we can do something about it.

If you can manage £2k every month you will see progress very quickly that will be great


One thing you can do if any of the low interest cards can have purchases put on at a lower rate than the top rate cards is migrate the debt to those cards by picking a spend to put on the card and throw the cash at the higher rate.

Might also be worth seeing if any of your current cards have offers that will help move that 22.9% debt.

One-step-at-a-time

Take heart, you can definitely, definitely do this!

When we started on this road two years ago our debt ratio was at its worst more than 17x our combined monthly net incomes (now we’re down to around 11x).

Most of our extra expenditure was on food and holidays/entertainment/mindless frittering - with effort the food bill got halved and the ‘fun stuff’ spending was cut by more than 90%. We ditched all subscriptions except Netflix (cost shared with my family). No takeaways, no posh coffees, LOTS of home cooking, shopping around for deals on all utilities and phones, looking critically at our stuff and selling things little by little (I’m still doing this and will be for many months to come).

I set up savings pots for all the different types of expenditure and set my bank account up to pay those first every month to stop nasty surprises - knowing where every penny goes and what it needs to do has been very empowering!

I still spend 5-10 minutes a day every day logging into all of my accounts as it helps me to keep focus. At times it still borders on obsession, but it’s so satisfying to see those numbers gradually come down. After time we started getting adequate BT offers and although there wasn't much room to manoeuvre, pingponging the same 2k of debt between two cards as many times as we could got the interest down from 20% to between 0 and 3.9%.

After two and a bit years we’re really making progress. It's a slog, and I b!tch and moan about it (mostly here to let off steam as the real world, especially close family, has no clue we are having to do this). We’ve hit a fair few roadblocks along the way, (the emergency fund never gets refilled before the next emergency hits!) but all in all it’s really not been nearly as awful as I was expecting, and the good habits will stick for life.

Wishing you the best of luck and subscribing to follow your progress!

tallyhoh

I second the suggestion for Dave Ramsey. I watch him on youtube, very motivating!

runaroundpauper

Just offering support I had £35000 of debt in 2011 I have now got that down to £5700 in a payplan dmp. With 14 months to go, it has not been easy I always always look at the cheapest option and what I can get for the money sometimes I have had to go without new cloths holidays and cheap mobiles and to be honest when the dmp is finished I don't think I'll change, we have had to control the money with a iron fist. Old cars. basic TV broadband. And the kids are always first. Don't skip or fall behind with council tax or mortgage when you go shopping look at how many meals you can get out of vegetables meat etc. Home made lunches. If need be where the same shoes for 5 years. Make the dent make it now and every month get that debt gone.. Debt ruins lives

Readytochange

Hello everyone

I have updated our SOA based on what I think we should be doing. I have slashed the holiday and entertainment funds, as well as reducing our food shop as this is definitely an area that we can reduce. I am a good cook, but I have become lazy.

I am actually starting to think that we can actually do this.

ousehold Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 3324
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 5124

Monthly Expense Details
Mortgage................................ 519
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 130
Electricity............................. 50
Gas..................................... 90
Oil..................................... 0
Water rates............................. 33
Telephone (land line)................... 26
Mobile phone............................ 60
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 27
Groceries etc. ......................... 280
Clothing................................ 50
Petrol/diesel........................... 210
Road tax................................ 5
Car Insurance........................... 0
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 320
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 30
Contents insurance...................... 21
Life assurance ......................... 32
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 15
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2130


Assets
Cash.................................... 0
House value (Gross)..................... 25000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 32000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 84000....(519)......1.79
Total secured & HP debts...... 84000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................25000.....410.......7.9
cc1............................10400.....230.......6.9
cc2............................4800......98........6.9
cc3............................7200......247.......22.9
cc4............................6000......197.......19.9
cc5............................3000......30........0
cc 6...........................4800......48........0
argos..........................500.......18........20
very...........................1800......97........0
Total unsecured debts..........63500.....1375......-


Monthly Budget Summary
Total monthly income.................... 5,124
Expenses (including HP & secured debts). 2,130
Available for debt repayments........... 2,994
Monthly UNsecured debt repayments....... 1,375
Amount left after debt repayments....... 1,619

Personal Balance Sheet Summary
Total assets (things you own)........... 32,000
Total HP & Secured debt................. -84,000
Total Unsecured debt.................... -63,500
Net Assets.............................. -115,500

JayRitchie

Wow - thats amazing!

For what its worth I think its easier to just say no to any spend than to play with pots of £10 here and £50 there so long as its for a relatively short period.

So - for one year you pay back around £3k a month. If no emergencies happen (and they might well) you'll be down to £30k debt after a bit more than a year. Of that debt about £21k will be on a reasonable and fixed interest rate - and you should be in good shape to get decent deals on the remainder and have no fears about your mortgage. Then save a ;fighting fund' of £10k for replacement car/ major house works.

At this point - about 18-22 months - life is back to normal. The loan payments drag on a bit, as do the repayments of the remaining credit card balances but you are out of the woods. I'd find a year of austerity far less stressful than selling a house and buying a new cheaper one while trying to generate cash.

Perhaps some people on the board could suggest very cheap/ free ideas for things to do? I think national trust passes could be great - especially as you have cars so can easily take a picnic and have somewhere to sit if it rains. An in car kettle for coffees might make it more pleasant?

getmore4less

Where has the car insurance gone?