My SOA

getmore4less

The current loss on the bike may be made bigger by keeping it.

EssexHebridean

790hero wrote: »

Thank you for the input, I'm having a sit down tonight where I'll look at where I can trim down the outgoings, and maybe consolidate two cars into one.

The bike is on HP, so it may have to stay as I imagine I'll be underwater on it. The stark reality is my spending on cars, bikes and drinking this year would have seen a good £20-25k come off that debt.

Time to start thinking about future me, and not borrowing against him.

I'll come back with an updated SOA, I do use monzo so tracking my last three months spending will be quite straightforward.

This post - and particularly the bit I've put in bold - absolutely makes my day. Congratulations - you have now had your lightbulb moment. Consider yourself a Debt Free Wannabe! :T:T:T

790hero

I be very surprised if it was less than a grand neg eq - which at the moment I wouldn't be able to find

EssexHebridean

For now, look at the overall picture - the spending. That's No. 1 priority. Once you have your budget sorted and in place then maybe have a look at the situation on the bike HP to see where you're at with it.

790hero

I can't get on with the SOA, so I've had a go with a budget planner. Here is the overview. The debt reduction comes from a consolidation which is drastically reducing the interest rates. This would see me servicing all debt and having approx £2k per month to overpay.

Interestingly, looking at my outgoings, drinking out was only £400 a month, and my motoring spend was nearly double my estimate.

eta - no image as I can't figure it out - hang on

EssexHebridean

Do NOT consolidate! At this point you don't have a handle on budgeting, managing spending etc, now have you dealt with some of the issues that are leading to your uncontrolled spending,. If you consolidate without fixing those things, and starting to learn to manage your money (not have it manage you) you will be back here in a few years with an additional 30k or more to have to clear.

Your income puts you in the unusual position where you can actually clear even the relatively high (by most standards) debt that you have quite fast, with some work. Yes, it's going to cost you some money in interest, but nothing like as much as not learning the lessons that the process teaches you, and ending up in more debt down the line would.

790hero

I don't get it.

If I consolidate my high-interest debt I reduce my payments by £600pm, (£1350 to £699) then allowing me to overpay by £600pm and clear the debt faster? It also then leaves a £1400 surplus per month to allow further overpayments with my new, streamlined budget (which includes a new (to me), economical car and the sale of one and mothballing of another. I'll tackle the bike in the spring.

I appreciate the discipline factor of consolidation, I have fallen foul of this before, but surely this is the right path to walk down?

EssexHebridean

Not until you have sorted out your spending issues. On paper, yes, it makes sense, but on paper, not buying a motorbike or spending a grand a month (ish) on entertainment type stuff when you are already in debt ALSO makes sense - no?

You KNOW that for you, consolidation did not work last time,. You also know that currently you have not put in place a plan to deal with your spending issues, AND lived with that plan for a while to see how it fares when you hit bumps in the road. And that includes the next time you go for a night out, bluntly.

You are already talking about buying a new (to you) car, selling one of your existing ones and mothballing another - thus still leaving yourself with 4 vehicles - start by selling one of your cars - preferably the one which costs the most to run - and using the other. Don't spend any further money on buying something else unless you are going to sell BOTH the current ones and just invest the proceeds in something that will be cheaper to run than either of them.

Think about DFW in the same way that someone might think about the AA (not the motoring one!) - they have a "12 step" programme for a reason - it's because each of those steps will help you to learn valuable life lessons for your future. Remember future you? He needs to start learning those lessons, and he won't do that by consolidating at this stage.

Hillwalker11

Unless you sort your budget out properly how do you know that every month you will pay off the extra £1400.You admit you only have a vague idea of entertainment and food spends.This is what you need to address before you start even thinking about consolidation.

It takes determination and willpower to clear debts and unless you know exactly where your hard earned cash is going you will set yourself up for failure.

You will begin with good intentions and pay off the extra, but then something will crop up and you will think this month I will pay a little less on overpayments and before you know it this starts to spiral.

You earn a good salary, make it work for you and be in control.

790hero

I have done a budget, but I don't know how to share screenshots on here. I spent time last night going through my last three months spending, and found that I have 3 main weaknesses;

Car - £800+ per month
Beer - £3-500 per month
Superfluous spending - £500pm

Backed up by big and significant bike purchases totalling £8k over the past 8 months.

So they are having to be cut back. My main car is a horrendous drain on funds, but it is not in saleable condition so that is being parked up. The spare car is good as a spare, but can't do consistent big miles that I need, that is already on ebay, I expect £1500.

I have found a car for £900, that is economical, cheap to run, but thoroughly uninspiring, so it fits the bill perfectly. That alone would save £5400 per annum over my main car.

I am happy to email the budget (it's the MSE excel one) over to anyone if they know how to post the screenshot