From £14k to in the clear

greenpanda

Hello Everyone,

After seeing we are now at the bottom of our overdraft, coming on here and receiving some superb advice I thought I would start a debt free diary.
We got here through a classic mixture of:
a) not paying attention
b) pretty much zero financial understanding (CAN"T COUNT significant bills as a 'one off' and keeping spending as usual)
c) spending a lot on entertainment/ holidays with lots of trips to Pizza Express and the like included

I'm hoping this will be useful to other people and as we've started (yesterday!) being serious about what we are doing I have to say our lives are significantly less stressed.

A bit about us - we live in London, are in our early 30s with a young child. I've signed up to YNAB which has been really useful in us seeing exactly where the money is going. The biggest motivator for clearly the debt is that we can then start using that money to improve our families future.

How we got here

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 3600
Total monthly income.................... 3600[/b]

Monthly Expense Details
Mortgage................................ 900
Secured/HP loan repayments.............. 67
Council tax............................. 125
Electricity............................. 58
Gas..................................... 50
Water rates............................. 33.3
Mobile phone............................ 88
TV Licence.............................. 12.89
Satellite/Cable TV...................... 38
Internet Services....................... 20
Groceries etc. ......................... 600
Clothing................................ 60
Petrol/diesel........................... 120
Road tax................................ 25
Car Insurance........................... 88
Car maintenance (including MOT)......... 40
Car parking............................. 40
Other travel............................ 135
Buildings insurance..................... 67
Presents (birthday, christmas etc)...... 137
Haircuts................................ 11.67
Entertainment........................... 400
Holiday................................. 140
Household repairs.......................... 10.42
Socialising............................. 251.51
Dining out.............................. 195
Subscriptions (netflix etc)........................... 38.53
Work Lunches............................ 93.01
Swimming Lessons........................ 33.88
Total monthly expenses.................. 3878.21


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(900)......0<
Overdraft......................0........(67).......0

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................9000......200.......0
Overdraft......................4588......67........0
Total unsecured debts..........13588.....267.......-


Monthly Budget Summary
Total monthly income.................... 3,600
Expenses (including HP & secured debts). 3,878.21
Available for debt repayments........... -278.21
Monthly UNsecured debt repayments....... 267
Amount short for making debt repayments. -545.21

Personal Balance Sheet Summary
Total Unsecured debt.................... -13,588

greenpanda

This weekend last year we spent £142:
£98 the supermarket (I certain this would not have been a big weekly shop!)
£25 dining out
£25.67 at JL

This weekend £18 at Aldi

MovingForwards

Wishing you the best and keep checking in with how it all goes

Your SOA will change overtime, so don't forget to update it, if only for your own benefit.

You will never walk alone with a diary!

Toni'sfriend

This weekend last year we spent £142:
£98 the supermarket (I certain this would not have been a big weekly shop!)
£25 dining out
£25.67 at JL

This weekend £18 at Aldi

Hello Greenpanda

Nice to see that you've started a diary. Isn't the above amazing?

Mnd

Good luck, I will be following you progress with interest

theoretica

Good luck - I am confident that next year's spending will look quite different!

beanielou

Happy shiny new diary

Drawingaline

Hello!!! So glad you have started a diary, have subscribed

greenpanda

This week we've been a) planning and b) making sure we aren't actually growing the debt. I'm excited for Friday, not because it is payday, but so I can see how we've done against the same week last year. I feel like we've done a really good job. We've both commented how much more we are enjoying things - since we can't spend to have fun we actually have to enjoy what we are doing which is so much nicer.

Tonight we are working on cancellations as the budget threw up quite a few 'services' that we were subscribed to that we don't need. Update to follow.

The small steps we've made so far:
- uploaded the last year to YNAB and categorised everything
- husband has started taking the bus which only adds on an extra 15 minutes but will reduce spending by £20 a week Reducing spending by approx £440 YE
- we've changed cat food reducing spending by £10 Reducing spending by approx £200 YE
- taking lunch to work as often as possible and changing where lunch is bought. Reducing spending by around £15 Reducing spending by approx £330 YE
- meal planning. We are using up all our food stopping spending on food we don't eat and overbuying as we've went to the supermarket several times a week without a shopping list. I've already made one meal last 2 nights.
- stopped eating out and taking packed lunches. This is where our big saving is going to be. I added in bananas and apples to our weekly shop so we always have snacks out and about. I'm also made a cake on Sunday to take out as a treat.

I'm hoping we can't get out of the approx £5k overdraft by the end of the year, but this may be a bit over enthusiastic. I really can't see us going back to our previous spending ways after this!

Drawingaline

Spuds like you are off to a good start!

I will say maybe try to put some money aside for eating out, maybe once/twice a month. Especially if you are used to doing it. It makes it more special. Maybe look on groupon, they often have set menu deals for £20 or so. It might mean two meals out somewhere a litlle less costly than normal, or one special meal out a month? It's important to find the right balance for you, otherwise you get to resent the budget and that's where the lifestyle creep comes back in.

greenpanda

It's been a few weeks since I last posted, but the changes have continued.

We've just come back from a week at Norfolk was truly wonderful. We stayed in a cottage, so could do largely self catering. Drawingaline - thank you for your message, it helpful and nice to receive. We ate out twice - fish and chips, as by the seaside. Prices were still more than I would have preferred to have paid (£25 each time!) but we were on holiday and they were very, very nice. The only other real 'spending' was £30 on steam train tickets which was lovely. I looked at what we spent in three days in Cotswolds, August 2018. Over three days we spent £291 on food and activities (the hotel was around £400) which I now find cringe-worthy. Our holiday also included a trip to a second hand bookshop - 2 books for £4 to top-up our holiday reading.
Holiday activities and dining out comparison
Norfolk 2019 holiday spend: £80
Cotwolds 2018 holiday spend £291

Changes we've made
- Cancelled the cleaner. £40 a week. Reducing spending by £800 to YE
- Cancelled Experien. This was still coming out at £14.95 a month, only due to the inconvenience of cancelling Reducing spending by £74.75 to YE
- Changed to Lidl nappies, rather than Pampers Reducing spending by £20 to YE

I think the huge difference is going to be made in no longer including a cafe visit or meal out with every weekend activity. Looking at our YNAB categories we were spending £427 a month on dining out and activities.

What we've done:
- everyone now has their own drink bottle, no more sneaky £1.20 at the train station
- Sunday my son and I do baking, for snacks when we go out and husband's lunches
- I take a thermos with me almost everywhere as I love drinking tea! Not everywhere (or almost anywhere in London) does a pot for under £2.
- I'm starting on meal planning, this is going to be a bit of a project I think and I want to get it right.

The goal at the end of this month is to have chipped £1k off the overdraft. Will update soon.