I just don't know where to begin with this

JayRitchie

Well, you have an interesting financial position. Risky, but very fixable.

A couple of queries about the SOA before looking any further:

- no child related costs such as music lessons, sports etc?

- You have put down two cars with a value of £7,000 and a fuel spend of £160 a month. When are the cars due for replacement and how much would you expect to spend on replacements? Fuel costs look a little high - is this due to distance commuted, other driving, or type of car?

Honeysucklelou2

Looking through, I noticed no contents insurance. If you are both working in education, do you not have union fees to pay?

Spending trackers are very useful, free trackers are easily downloadable and can show clearly where money goes. I use one on a weekly basis and it has been an eye opener!

salXYZ

Wow - so many replies. Thank you all so much. I will try to address questions below -

Cars - we need two cars. husband commutes 60 miles per day ( hence high fuel cost) and I need my car for school drop offs and running son around etc. My husbands car is only 5 years old so we have no plans to replace that in the next few years. My car is 11 years old and at the moment it's running fine. I do worry about what would happen if it dies as I would not want credit. Equally I would not want an old banger. I was involved in a very serious car accident 20 years ago and I am a very nervous driver. I would need something that I felt safe in, although it wouldn't need to be new or expensive.

We do have contents insurance - I just put the one figure for building and contents but we do have this. We have been burgled twice so this is important for us.

In terms of where the £1600 goes, I agree that this is a shocking amount of money. I have sat today and really thought about this and it's quite clear where a lot of our money goes. I will give you an example of the sort of madness that we have allowed to happen -

3 weeks ago we went into town on Saturday morning. Early start so breakfast in Debenhams. Our son needed some new clothes so we spent a couple of hours shopping for him. I like next and Debenhams and I must have easily spent £250. Coffee in Costa before more shopping. Husband bought a new sound bar for the TV and I picked up some work clothes. We then went for lunch at Carluccios before heading home. Total cost for the day - somewhere in the region of £450. Absolutely crazy now that I look at it with a different perspective, however this is something that we would do quite regularly.

We also like to go on holiday and have weekends away so we pretty much have a balance to pay most months. I have looked back at last year. We went to Menorca, Lanzarote as well as a mini break in rome and several weekends in the UK. Last year we must have spent about 7K on travel which is also ridiculous given our current financial situation.

I will often pop in Salisbury's on my way home, even when we have plenty of food at home. I can easily spend £50 on things that we don't need. It wouldn't be unusual for me to do this a couple of times a week which again is absolute madness.

My husband is less of a day to day spender, however he does like gadgets and will spend money of electrical items - sound bar, posh coffee machine etc. All unecessary.

So there we have it. We have no excuse. We have good jobs and we have simply allowed our lifestyle to run away with us. We are both ashamed and embarrassed about our debt level. We have buried our heads in the sand for too long telling ourselves everyone has debt and that it's normal. I am quite sure that most people do not owe 60K in loans and credit cards!

On a positive note we are in full agreement that we need so tackle this now. I have cancelled next years holiday today losing a deposit of £240, however we cannot afford the £4200 balance! We have also done a big shop at Aldi today, buying enough for two weeks worth of meals. It cost £72. We will need to pick up milk, bread etc but this is a massive improvement on our usual £100 online shop from Sainsburys.

I know that the real test will be whether or not we are able to sustain this new life!

Sea_Shell

You've made an amazing start!!! Sounds like you've had your "lightbulb" moment.

I've subscribed.

There will be tough times, when you think you can't carry on your new found frugality...but it will be so worth it in the long run.

Good luck.

Well done for realising you can't afford that holiday. Most people wouldn't lose the deposit, and plow ahead, but the interest you'd end up paying on the balance could easily exceed that cost.

Grumpelstiltskin

The clothes you bought 3 weeks ago, any chance of returning any of them for a refund?

Willing2Learn

salXYZ, I think you and your husband are ready to start your debt-busting journey. It would be great to follow. Are you going to start a DFW diary?

kimplus8

have you tried a 'pantry/cupboard' shop for the week.
Essentially you go shopping in your own cupboards. you can easily google meals to make with ingredients that you have and then you won't be spending on shopping when you can not-buy what you have at home already.
it will make for some interesting eating but I promise it really works. then cut you supermarket shop to once a week MAX! list exactly what you need to buy to make the meals that you have planned (account for 2 extra portions for next days lunches at work) and only buy what is on your list. it really is amazing what you will save.
the only exception to this rule that I do is if I see significantly reduced item because they are abut to go out of date or something and then I take home and freeze to use in the following weeks meal planning. I account £10 for this in my weekly food budget.
I promise you it can be done cheaply. I have 8 kids, some of whom are teenagers and we comfortably eat for £100 per week including all lunches etc.
I recommend doing a weekly and monthly budget. It will take 3-4 months of tweaking to get it perfect but it does work.
personally I use an envelope system for all of my spending besides what is paid by standing order or DD.
I have an envelope for groceries, car fuel/parking, kids 'pocket' money, my 'pocket' money, everything else goes into the bills account or savings accounts for emergency fund, MOT/Car fund, house expenses fund.
when I had debts to clear I paid into my 'emergency fund' until I had £1000 for emergencies and the rest went on debts.
It is hard, I'm not gonna lie, the first 3-6 months were torture for me to not spend money. I avoided shops/sales like the plague and I only went into the town centre if I specifically needed something, then I walked and bought that specific item and then walked home (by walking I knew I was limited as to what I could carry home). I was like a woman possessed to get my debts cleared as fast as I could and even then I sadly went through bankruptcy as part of my divorce.
YOU GOT THIS!!!!
the fact you are here wanting to change the rest of your life is a huge step.
I wish you the best in achieving debt freedom and will be following with interest.

enthusiasticsaver

It does sound as if you have had a light bulb moment and you have made a good start.

I would say spending diary is a good start but you seem to know where you have been going wrong which is uncontrolled spending. You can do holidays, buy clothes and meals out but it should be within your budget and affordable.

You have no savings for emergencies and that Very card is horrendous interest so I suggest you tackle that one first. First do a sustainable soa though as it is unrealistic to have nothing in entertainment unless your child does no extra curricular activities, you never eat out or do takeaways or cinema or any other activities. This will be a long journey so it needs to be sustainable. Well done for cancelling the holiday and as you say £4200 when you have almost £60k of debt and no savings is ridiculous so in spite of the loss of the deposit you have done the right thing. If you are certain you will not be able to do without a holiday then budget a monthly amount and put it away in savings. Same goes for car running costs and clothes. Stop using the cards altogether.

You can cut down the groceries and presents by meal planning and shopping in a cheaper supermarket and setting lower limits on presents.

salXYZ

enthusiasticsaver wrote: »

It does sound as if you have had a light bulb moment and you have made a good start.

I would say spending diary is a good start but you seem to know where you have been going wrong which is uncontrolled spending. You can do holidays, buy clothes and meals out but it should be within your budget and affordable.

You have no savings for emergencies and that Very card is horrendous interest so I suggest you tackle that one first. First do a sustainable soa though as it is unrealistic to have nothing in entertainment unless your child does no extra curricular activities, you never eat out or do takeaways or cinema or any other activities. This will be a long journey so it needs to be sustainable. Well done for cancelling the holiday and as you say £4200 when you have almost £60k of debt and no savings is ridiculous so in spite of the loss of the deposit you have done the right thing. If you are certain you will not be able to do without a holiday then budget a monthly amount and put it away in savings. Same goes for car running costs and clothes. Stop using the cards altogether.

You can cut down the groceries and presents by meal planning and shopping in a cheaper supermarket and setting lower limits on presents.

Thank you. We certainly will not be going on holiday next year apart from maybe a few days in a B&B in the UK. We cannot spend that sort of money when we are in such a hole.

Willing2Learn

salXYZ wrote: »

We certainly will not be going on holiday next year apart from maybe a few days in a B&B in the UK.

This should be saved for. So put a little aside every month and update your SOA accordingly so that it shows you are saving money in to the 'holiday' budget category.