I just don't know where to begin with this

salXYZ

Hello everyone.

A bit about us -

We are a couple, both pushing 40 with a 9 year old son. We both work full time. I work as a teaching assistant/cover supervisor and my husband works in secondary education as a deputy headteacher.

We are in so much debt I just don't know where to begin. The most annoying thing is that it is entirely self inflicted. We have a good income but we have just spent years overspending and pushing it to the back of our minds. We don't really have anything to show for this debt as it has just gone on holidays, random purchases and general day to day overspending.

We are at a stage where we need to do something about it. We have exhausted all of the balance transfer options and out level of debt means that we are not eligible for new 0% products. Our credit scores are poor and fair.

On paper we should have no issues. We are not in an arrears and thankfully we are still at a stage where we can afford the payments, however there is never any money left by payday as our spending is just so disorganized, chaotic and out of control. We are both to blame and we both accept that some serious changes are needed.

It just feels so insurmountable and I really don't know where to start. We desperately want to get control of our finances before we enter our forties.

I'd welcome any advice and support. Feeling very low about it all. I have to keep reminding myself that we are ok and that we can sort it..... hopefully. I have done a SOA, Please see below.
Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 3699
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4999

Monthly Expense Details
Mortgage................................ 513
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118
Electricity............................. 40
Gas..................................... 80
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 18
Mobile phone............................ 60
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 39
Groceries etc. ......................... 400
Clothing................................ 100
Petrol/diesel........................... 160
Road tax................................ 20
Car Insurance........................... 64
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 120
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 28
Contents insurance...................... 0
Life assurance ......................... 31
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1966


Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 227000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 79000....(513)......1.8
Total secured & HP debts...... 79000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax loan...................8100......132.......7.9
Creation loan..................12000.....248.......9.9
CC1............................12250.....240.......6.9
very...........................1800......120.......49.9
Aqua...........................800.......20........0
HSBC...........................2900......60........16.9
Bcard .........................4800......140.......20.9
Tesco CC.......................4200......125.......19.9
MBNA CC........................7500......250.......23.9
CC2............................4500......90........6.9
Total unsecured debts..........58850.....1425......-


Monthly Budget Summary
Total monthly income.................... 4,999
Expenses (including HP & secured debts). 1,966
Available for debt repayments........... 3,033
Monthly UNsecured debt repayments....... 1,425
Amount left after debt repayments....... 1,608

Personal Balance Sheet Summary
Total assets (things you own)........... 227,000
Total HP & Secured debt................. -79,000
Total Unsecured debt.................... -58,850
Net Assets.............................. 89,150

Willing2Learn

Hi salXYZ,

Your SOA says £1,608 spare money in your monthly budget. I am assuming this not correct and that this SOA is an aspirational one. I suggest firstly start a spending diary to track your 'on the go' expenses, and secondly going through you bank and credit card statements to find some of that missing money.

Here is something to get you started.


Monthly categories missing allocated funds in your SOA:

• Petrol/diesel, car maintenance, car parking categories (you have costs for 2 cars).
• Emergency Fund
• Entertainment
• Holiday

And something to read:
Snowballing vs debt-stacking

http://www.whatsthecost.com/snowball.aspx

fatbelly

You need to put something in for car maintenance. With 2 cars I'd suggest £40 per month.

But apart from that your soa looks good, and you can throw some money at your debts. There is still some room for savings. Gas, Electricity, mobile contracts, car insurance - all need to be researched using info on this site and quidco/topcashback where appropriate. Your clothes budget is a bit high. If you can forego a holiday for 2020 you can be in a much better position in 18 months.

You need to concentrate on lowering the interest where possible and overpaying the highest interest debts first. That's where snowballing comes in.

In the first instance I'd blitz Very and never use them again.

Your credit rating should not be poor. Make sure you are on the electoral roll and set up d/ds for minimum payments on the cards so that those are never missed.

Unicorn_cottage

Hi salXYZ

You and your partner can definitely get through this with a big dollop of determination and following the suggestions above. As fatbelly you need to see off that Very debt asap. Btw is the Aqua debt really 0%? To hit the Very debt do you have any thing you can sell? Plus do you need the 2 cars? These are all things to give thought to and see if you can make adaptations etc to save money.

Best of luck!

Socajam

salXYZ wrote: »

Hello everyone.

A bit about us -

We are a couple, both pushing 40 with a 9 year old son. We both work full time. I work as a teaching assistant/cover supervisor and my husband works in secondary education as a deputy headteacher.

We are in so much debt I just don't know where to begin. The most annoying thing is that it is entirely self inflicted. We have a good income but we have just spent years overspending and pushing it to the back of our minds. We don't really have anything to show for this debt as it has just gone on holidays, random purchases and general day to day overspending.

We are at a stage where we need to do something about it. We have exhausted all of the balance transfer options and out level of debt means that we are not eligible for new 0% products. Our credit scores are poor and fair.

On paper we should have no issues. We are not in an arrears and thankfully we are still at a stage where we can afford the payments, however there is never any money left by payday as our spending is just so disorganized, chaotic and out of control. We are both to blame and we both accept that some serious changes are needed.

It just feels so insurmountable and I really don't know where to start. We desperately want to get control of our finances before we enter our forties.

I'd welcome any advice and support. Feeling very low about it all. I have to keep reminding myself that we are ok and that we can sort it..... hopefully. I have done a SOA, Please see below.
Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 3699
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4999

Monthly Expense Details
Mortgage................................ 513
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118
Electricity............................. 40
Gas..................................... 80 - this is high, but winter is coming so might need to stay
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 18
Mobile phone............................ 60 - Is this for 3 phones?
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 39 - Can you get something cheaper?
Groceries etc. ......................... 400 - this is really high, that works out to 100 per week?
Clothing................................ 100
Petrol/diesel........................... 160
Road tax................................ 20
Car Insurance........................... 64
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 120
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 28
Contents insurance...................... 0
Life assurance ......................... 31
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1966


Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 227000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 79000....(513)......1.8
Total secured & HP debts...... 79000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax loan...................8100......132.......7.9
Creation loan..................12000.....248.......9.9
CC1............................12250.....240.......6.9
very...........................1800......120.......49.9
Aqua...........................800.......20........0 - take 800 from what is left over and get rid of this.
HSBC...........................2900......60........16.9 - use the 20 from above add 800 and tackle this,then move onto the next one
Bcard .........................4800......140.......20.9
Tesco CC.......................4200......125.......19.9
MBNA CC........................7500......250.......23.9
CC2............................4500......90........6.9
Total unsecured debts..........58850.....1425......-


Monthly Budget Summary
Total monthly income.................... 4,999
Expenses (including HP & secured debts). 1,966
Available for debt repayments........... 3,033
Monthly UNsecured debt repayments....... 1,425
Amount left after debt repayments....... 1,608

Personal Balance Sheet Summary
Total assets (things you own)........... 227,000
Total HP & Secured debt................. -79,000
Total Unsecured debt.................... -58,850
Net Assets.............................. 89,150

Both you and your husband need to start taking lunches (if you are not doing so already). Try this for the next 3 months, and put that lunch money in a bottle (you will be shocked at how much money you were spending on lunches).
Cook extra food for the next day lunch.
Start baking from scratch, buy marked down bananas to make banana bread or muffins - use for breakfast for afternoon snack.
Cook every 2 days to save on your gas bill. You can cook one large chicken, baked fish or meat dish at the same time and warm up the next day
Go around the house and see how much supplies you have sitting around, make a note and do not buy anything until you are on the last one. Yes, it's nice to buy that bargain on sale, but you have too much debt to be doing so.
Start recycling your clothes, learn how to mix and match - you can do a search on google for this.
Start putting all those odd coins in a bottle, you would be amazed how they can add up.
I took my bottle of coins to the bank and walked away with over 200 pounds.
You need to tighten you belt, only one Christmas present until you are debt press.
Lastly do you have a life happens fund or even an emergency fund?

uknovaman

So, let me get this right, you have £1608 left each month, but you have no money left at payday? What does the £1608 go on? That's about £400 a week spare, or am I missing something here?

Scrimps

fatbelly wrote: »

You need to put something in for car maintenance. With 2 cars I'd suggest £40 per month.

But apart from that your soa looks good, and you can throw some money at your debts. There is still some room for savings. Gas, Electricity, mobile contracts, car insurance - all need to be researched using info on this site and quidco/topcashback where appropriate. Your clothes budget is a bit high. If you can forego a holiday for 2020 you can be in a much better position in 18 months.

You need to concentrate on lowering the interest where possible and overpaying the highest interest debts first. That's where snowballing comes in.

In the first instance I'd blitz Very and never use them again.

Your credit rating should not be poor. Make sure you are on the electoral roll and set up d/ds for minimum payments on the cards so that those are never missed.

^^THIS

Pay the very account off next pay day and close it.

Also your broadband is high. I pay £13.50 a month, I just called Sky and said I foudn this deal, please match it or im off, and they did. They do every year:).

Its great that youve realised the position that youre in now, you both know your need to change, your income is great! youve got this.

it can be hard but make sure you stick to your budget and you will be out of debt fast. On the above figures, you should have £3k left over and you still have fat you can trim (energy, clothing, broadband and gifts, im looking at you)

Also - if you spent money and have nothing to show for it, that sounds to me like you have a lot of uneeded stuff you can sell.

You have £3k a month, you need to pay off £60k, ive calculated that at 20 months. youll be completely debt free in less than two years. You just have to commit and focus, At times it will be hard but it will also feel great each time you pay off one of those debts and close the accounts!

Read, watch and listen to dave ramsey for some motivation and guidance. It has really helped us

Scrimps

Also, something else that really helped us was YNAB. Its an app that really helps you organise your money and spending. which youve nailed as being one of your issues. We over spent our budget by week 3 every month, that completely changed once we got YNAB.

Now our finances are very simple and easy to manage, so much so we no longer use the app and just use cash most of the time and a pen and paper to track.

Willing2Learn

+1 for YNAB...

enthusiasticsaver

salXYZ wrote: »

Hello everyone.

A bit about us -

We are a couple, both pushing 40 with a 9 year old son. We both work full time. I work as a teaching assistant/cover supervisor and my husband works in secondary education as a deputy headteacher.

We are in so much debt I just don't know where to begin. The most annoying thing is that it is entirely self inflicted. We have a good income but we have just spent years overspending and pushing it to the back of our minds. We don't really have anything to show for this debt as it has just gone on holidays, random purchases and general day to day overspending.

We are at a stage where we need to do something about it. We have exhausted all of the balance transfer options and out level of debt means that we are not eligible for new 0% products. Our credit scores are poor and fair.

On paper we should have no issues. We are not in an arrears and thankfully we are still at a stage where we can afford the payments, however there is never any money left by payday as our spending is just so disorganized, chaotic and out of control. We are both to blame and we both accept that some serious changes are needed.

It just feels so insurmountable and I really don't know where to start. We desperately want to get control of our finances before we enter our forties.

I'd welcome any advice and support. Feeling very low about it all. I have to keep reminding myself that we are ok and that we can sort it..... hopefully. I have done a SOA, Please see below.
Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 3699
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4999

Monthly Expense Details
Mortgage................................ 513
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118
Electricity............................. 40
Gas..................................... 80
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 18
Mobile phone............................ 60
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 39
Groceries etc. ......................... 400
Clothing................................ 100
Petrol/diesel........................... 160
Road tax................................ 20
Car Insurance........................... 64
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 120
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 28
Contents insurance...................... 0
Life assurance ......................... 31
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1966


Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 227000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 79000....(513)......1.8
Total secured & HP debts...... 79000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax loan...................8100......132.......7.9
Creation loan..................12000.....248.......9.9
CC1............................12250.....240.......6.9
very...........................1800......120.......49.9
Aqua...........................800.......20........0
HSBC...........................2900......60........16.9
Bcard .........................4800......140.......20.9
Tesco CC.......................4200......125.......19.9
MBNA CC........................7500......250.......23.9
CC2............................4500......90........6.9
Total unsecured debts..........58850.....1425......-


Monthly Budget Summary
Total monthly income.................... 4,999
Expenses (including HP & secured debts). 1,966
Available for debt repayments........... 3,033
Monthly UNsecured debt repayments....... 1,425
Amount left after debt repayments....... 1,608

Personal Balance Sheet Summary
Total assets (things you own)........... 227,000
Total HP & Secured debt................. -79,000
Total Unsecured debt.................... -58,850
Net Assets.............................. 89,150

I think if you both accept you need to make changes then you can sort this but it will take financial discipline and you will need to start prioritising paying off the debt.

Getting some sort of realistic budget in place will help. You have obviously been seriously overspending if you are going into debt in spite of a £1600+ monthly surplus and some pretty high amounts in some of your spending categories. £100 a month on presents when you have almost £60k of unsecured debt can be cut down as can £400 a month on just 3 of you for food. Start a spending diary, cut the cards up and save an emergency fund as a start. Clothing and groceries and presents is high but you have nothing down for car maintenance, entertainment, emergency savings or holidays and yet you say you take holidays. More than your entire salary is going on minimum debt repayments so getting a grip on this is imperative.

Tackle Very first. If you really stop spending on any unnecessary things for just one or two months you could clear that and save yourself £73.50 interest each month.

macman

£100 a month on clothes, but no contents insurance?! That's a real false economy.