My Journey To Freedom From Debt

JamesByeTaylor

Ok here goes. *Deep Breath*


So I am a male who turns 40 this year and pretty much since I left school and started working I have never had a financial mind set.


When I turned 18 I got given about £2000 from my mother, when I was younger she took out some kind of insurance policy for us kids that paid a lump sum when we turned into adults. I think this started me on the road to a poor mindset with money. Not long after this I started a job at a company that believe it or not I am still working for. So being an 18 year old single male with money was dangerous.


Needless to say I drank most of my money away, or bought crap with it. For s few years I was living just within my means, but then came women. I met my first serious girlfriend and started to go into debt in order to impress her, foolish right, it wasn't major debt, just increasing my overdraft slowly. Oh and at this time I was sharing a house with two mates which meant that we were drinking most nights/weekends oh and smoking as well.


This was when I first tried starting to get myself straight but I was never disciplined enough. I also believe this was when I first came across this site.


So me and the girlfriend split up, and then I met the love of my life. We moved into a house together ( renting), deposit paid by a similar insurance policy in her behalf, and life was good. We didn't spend too much but I was always in my overdraft, always spending just that little bit more than I could afford.


Then in 2010 came our first DS. I wish I could say this was a lightbulb moment for my finances, but it wasn't. After a year and with help from her Nana paying the deposit we bought our first house, where since then we have had a DD and two more DS's. With each successive child we have had the discussion about finances.


Well Christmas 2017 came and my partner was caught off guard with Christmas presents (probably understand why later), so we signed up for an Argos card and Christmas went on that.


Early 2018 our fridge packed up so we bought a new one on finance and whilst there for good measure we decided to get a dishwasher, washing machine and tumble dryer at the same time.


A couple of months went past and I didn't like the state of my finances so we discussed it and decided to take out a £10000 loan and pay off all outstanding balances and bring our banks out of the overdraft.


For a few months it was bliss, just looking at my bank and actually having money in there and not living in the overdraft. I tell you it was bloody lovely.


As you can probably guess it didn't last long. I took a fall at home and I was out of work for a month and then I was in short hours for a month as well as forking out for public transport.


So both our finances took a nosedive again.


Christmas 2018 went on Argos card again.


In January this year we decided to take out a £5000 loan to once more pay of outstanding balances and save a little money in payments.


That again for it is in the clear, but unfortunately we didn't keep their. It was all the little spends that soon add up, a coffe or four at work, snacks out of the machine at work. A pop on the way home etc etc.


So we come back to today where money is super tight, we are living in our overdrafts and we are extremely dissatisfied in ourselves. And we aim to sort it. Eventually.


How out finances work out.


When we moved in together we were both working. We agreed that I would take care of all the bills and my smoking out of my bank and she would take care of all the food and her smoking out of her bank as well as clothes etc for us.


When she left work I started to give her X amount of money per week towards food to top up her child tax. This was fine for a while. Untill 2017, due to the Argos spend I had to give her less money. Then the fridge etc so she had less money from me.


Four years ago I moved positions within the company, I got a pay rise on paper but a pay cut in real terms as there was no overtime. But the trade off was worth it as I got to spend a lot more time with family. Unfortunately that lasted for two years before office politics meant I had to take a pretty hefty pay cut and go to a different role. But our spending habits didn't change.


The annoying thing is that really we have nothing to show for the debt ( not counting the mortgage). As it's pretty much all went on junk, a while back I started to use a spending app and I was absolutely disgusted with myself to discover that in one month I spent £155 just on food/drink from vending machines at work.


Well that's it for this essay for now. I will be back at some point with an SOA.


Thanks for reading.

JamesByeTaylor

Statement of Affairs and Personal Balance Sheet


Household Information
Number of adults in household........... 2
Number of children in household......... 4
Number of cars owned.................... 1


Monthly Income Details
Monthly income after tax................ 1304
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1304


Monthly Expense Details
Mortgage................................ 326.3
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 114
Electricity............................. 31.5
Gas..................................... 31.5
Oil..................................... 0
Water rates............................. 35.82
Telephone (land line)................... 0
Mobile phone............................ 46.5
TV Licence.............................. 11.5
Satellite/Cable TV...................... 45.82
Internet Services....................... 0
Groceries etc. ......................... 108
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
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..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 84
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Overdraft............................... 30
Smoking................................. 120
Total monthly expenses.................. 984.94



Assets
Cash.................................... 0
House value (Gross)..................... 105000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 105000



Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 62333....(326.3)....0
Total secured & HP debts...... 62333.....-.........-


Unsecured Debts
Description....................Debt......Monthly...APR
M&S Loan.......................10000.....158.7.....0
My Community Bank..............5000......123.2.....0
Zopa Loan......................1500......24.02.....0

Notes
Food budget is low as it's money I give my partner towards food etc.
Gas/Electric has just been changed to a new supplier for a year. I am expecting this to increase in a few months. Hopefully not by much.
Cable TV has recently been changed for a year , I saved myself £30 a month.
Oh and I forgot to add £20 a month for Argos and PayPal Credit payments.

All told I don't earn enough each month if you look at this. But I have put my income as my basic weekly rate. Normally it is more than this but not by a set amount.

My current goals are....

1. I have a set amount of overtime each week I am aiming to do to boost my income.
2. Don't spend unnecessarily.
3. Get out of my overdraft (currently predicted to be January 2020).
4. Put extra Money towards loans.
5. Save save save.

I am considering remortgaging to save money there, and i am also contemplating consolidated the loans to save there also (don't know aprs or actual balance on them yet)

A long road to travel yet.

jwil

It's worth having another look at your SOA as you are missing any costs for your car as well as the missing debts. Your overdraft should be listed as a debt too. Definitely find out what your APRs and exact balances for your debts are.

How much is your OH spending on food/smoking? It might be an idea to have a household budget, even if you keep your finances separate.

Your mobile phone costs are high - when does your contract end and can you go sim only? What are the 'other insurances'? You need to budget for christmas and birthdays so you are not taken by surprise by them.

You are spending almost 10% of your basic monthly income on smoking. Is there any way you can give up/reduce that?

Remortgaging to get a better interest rate on your mortgage might be worthwhile, but do not add your debts to the remortgage as you will be putting your home at risk. Definitely don't consolidate again - you've done that at least twice and it's not working (been there, done that!). You need to just focus on reducing your debts now, not moving them around.

Yellow_mango

Adding all that up it looks like your expenses are more than your income. Even without the items that are missing (eg car costs).

How much extra income can you realistically make through overtime?

Yellow_mango

Is your wife working now? What is her income?

With 4 kids you’re definitely going to need some budget for clothes / toys / entertainment / medical etc. Is your wife covering all that?

JamesByeTaylor

Jwil


All car costs are covered by the Mrs, it's her car and I don't drive. She also covers her smoking (trying to quit) and her phone bill.
Any costs for the family (clothes, presents, day trips etc) are all covered by the Mrs also.


We decided to keep things seperate for ease years ago, so she never needs to worry about leaving X amount of money in the bank for bills etc.


Mobile phone is up for renewal next year and I fully intend to just take a sim only deal to save pennies.


Other insurances are life, house, contents and warrantys for white goods, I lumped them together as I wasn't sure what insurance was what.


Smoking is something I have started to make cheaper by using a vape, so instead of a pouch of tobacco a week I am to cut that right back and mainly vape as it's a hell of a lot cheaper.


I am of work for holiday in about a month and I'm hoping to have all my ducks in a row so I can spend the time and actually speak to a mortgage advisor about remortgaging. I have done online calculators and I think I could save maybe £50-100 a month.


Yellow_mango


I can make about £50 a week if I can get my act together.
And as above she earns a similar amount to me.


We are both doing this together in our respective banks but I can't speak to her situation as it's not right to broadcast her info if you know what I mean. We have both sat and talked about money and our plans to get better with managing it.

Yellow_mango

OK. Whilst it may have made sense to arrange your finances that way in the past, the problem I see looking at it now, is that it appears she has responsibility for all the “discretionary” spending (groceries, clothes, entertainment etc) whilst you have almost entirely fixed costs. Which means you have very little scope to control spending or reduce your costs, and she has all the responsibility (and benefit) of doing so.

Even if you make the maximum £50 a month overtime you’re only just going to break even and will still have no surplus to make payments on the debt. It just doesn’t seem realistic or fair on either of you.

Could you maybe set up a joint account for all the shared / fixed expenses and each pay half of those costs in each month, then split the responsibility for the remaining discretionary costs between you?

Is all the debt in your name and your responsibility to pay? Or is there more that you haven’t included in her name too?

JamesByeTaylor

Sorry I should have clarified, i could make £50 a week overtime if I got my but in gear.

All debts bar the mortgage is in my name.

I think we both like it this way. I have a set wage coming in and more if I do the overtime so to us it makes sense for the set bills to come out of one bank. If we split bills and paid into a shared account I think that at some point something will need something that will end up coming out of the shared account meaning bills don't get paid.

As it stands if something comes up and I can afford too then I will pay it, sometimes I will get the money back and sometimes I won't.

I know exactly what is due to come out my bank and when. I know if I hit my set targets then I will be out of the overdraft Jan 8th 2020 and then I can start knocking loans off. Now obviously there will be surprises along the way so it's not a hard set in stone date. If things are split then any of us in a moment of weakness can ruin it, whilst now I can only ruin it.

I'm not sure if I'm explaining myself right here, all I can say is that we have both discussed a joint account a few times over the years but we both feel it's better as it stands.

JamesByeTaylor

Can't edit my last post....

She does have a Next card in her name that she pays off.

Yellow_mango

Sorry I misread. You did say £50 a week.

If it works for you then go for it. Life would be boring if we were all the same!

Best of luck with your journey :-)

PositiveBalance

Hi JBT! :wave:


Yay to starting your diary! :j I'm sorry I didn't drop in sooner, but I didn't see it when you started it as I was on holiday at the time.


I found it lurking several pages into the Debt Free Diaries.


Come back and tell us how things are going.