Twenty Twenty-Two

SmartSid

Hello DFW's, I am writing this today with a hope that sharing it will release some of the shame I am holding. My total debt today is £10,635.99, excluding a car loan. Slowly I have repaid £3,250 this year, but I am still very relaxed with overpaying. I want to be made accountable for my financial decisions.

Some diaries I have read before registering has a 'SOA', this is my attempt at one, if I am missing anything please ask.

Income £1,200 (average hourly wage)

£300.00 Rent (Shared house, includes some bills)
£172.60 Car Loan Repayment
£36.43 Car Insurance
£40.00 Fuel
£10.40 Prepaid Prescription Certificate
£10.00 Sim Only Mobile
£40.00 Groceries
£25.00 Christmas/Gift Savings

£634.43

£565.57 Remaining for debt repayment

*No car repairs/tax is listed, I service & MOT the car by using that months wage/the overdraft account. My car is tax free.

Debts
£7,243.58 Credit Card
£2,509.33 Credit Card
£371.63 Overdraft (separate financial institution from main bank)
£211.43 Catalogue

I have very little possessions (excluding car) that hold any value. The debt was an accumulation of holidays, gifts, car repairs & assisting family. This past year I have started to live a much more frugal life. I no longer eat out/takeaways, I shop exclusively in charity shops/in sales & I have reduced all unnecessary purchases.

I used an online calculator and using £500 a month I should be debt free March 2022 (one month after the car loan ends). This is my current target.

I welcome any ideas or comments, thanks for reading.

Sid

Naomim

Hi Sid,

My only observations are:
£40 a month seems low for food. But I shop for 4 so may be off of what's ok for one.

No socialising or hobbies at all? If you cut back on absolutely everything, it can make life very boring which in turn can make paying the debt seem like it's taking forever even if it is paying off quicker.

Good luck with the journey.

Naomim

ratrace

Hi sid, welcome are you really spending 40 a month on food if you are then thats a bit sad as there is no way you are eating a healthy balanced diet for £10 a week, especially when you are spending 170 (4x times your food budget) a month for a car you dont ise mucch hence the low fuel spend

sell the car buy a run around for £1000 pay your debts of as quick as possible and look after your health mate its our asset, food to me is very important i spend £60 a week just for me 1 person buy everything fresh and meal prep on a sunday and wednesday no junk just clean eating

post an accurate soa using the template on here and the good folks will help you cut back where you need to and offer some good advise

SmartSid

Hello Naomim,

In the past 6 months I have indeed spent £40 or less. I shop mostly in the discount retailers and batch cook from scratch. I have been using some of my store cupboard items so they are diminishing but I think it is achievable.

My hobbies include reading, walking and gaming. All of these can be accomplished using very little cash. I have a long list of 'books to be read' and I always look out for free kindle books. I am also signed up to the local library. I game on a console, I very rarely purchase new games for myself and those I do are second-hand.

ratrace, please see above for an explanation of my food budget. With regards the car, I would be unable to keep my job without a car. I work 8-12hr shifts starting at 5am with no public transportation. I can't sell the car as it is under hire purchase agreement and thus I am not the 'owner' untill 2022. I have also suffered years using a 'run around' which has monthly repair costs, some months in excess of £500.

Thanks for your replys.

ratrace

SmartSid wrote: »

Hello Naomim,

ratrace, please see above for an explanation of my food budget. With regards the car, I would be unable to keep my job without a car. I work 8-12hr shifts starting at 5am with no public transportation. I can't sell the car as it is under hire purchase agreement and thus I am not the 'owner' untill 2022. I have also suffered years using a 'run around' which has monthly repair costs, some months in excess of £500.

Thanks for your replys.

Ok, first of all sid £10 a week on food is very tight as i said before you cannot be eating a balanced diet on such a low budget try to increase this and cut back elsewhere the last thing you want is to become ill and then not be able to work

ok the car i would need a bit more information on it but let me give you a few options

pcp - if the car is on pcp which means at the end of the term you have to find the baloon payment or walk away i would walk away and just buy a cheap car at that point

hp- ok this is when you acutally own the carand the end with no baloon payment and after the term ends its your car as you have paid it off over the term bit like a mortgage when the last payment is made the cars yours, at this point i would sell the car and buy a cheaper one

voluntary termination - you can vt your agreement at any time yes its true there a 2 ways, the first is lets say you own in totoal including intrest and fees 10K once you have paid 50% of the ie: 5k then you can vt the agreement and walk away without paying anything more the only problem with this method is that the 50% point in noramlly only a few month s before the agreemant is coming to an end anyway

2nd way - you can vt at any point yes its true but you have make up the short fall so for example i have a car on pcp/hp and i own x on it, i call my finance company and ask for a settelment figure to settle today they say to pay it off today its £18,000, but the caris only worth 15k its in 3k negative equity, but i dont have 18k to pay the car off so i go to a car dealer or we buy any car,the dealer offers me 15k to buy the car i try to get a 3k loan/cc card borrow from family etc... for the 3k and pay the finance company off, this way the caris off my hands yes i now own a debt of 3k but i have just got rid of 18k and took on 3k i would own 3k than 15k, next i would swallow my pride and go buy a small toyota or a mica for 1k and drive that to work, do i really need a 18k to drive to work for it to be sitting there all day no not really

ok so thats another way at looking at things, i totaly understand you need a car for work we all do but we dont need expensive cars especially when we have debt, hope this long post clears some things up for you

SmartSid

but we dont need expensive cars especially when we have debt

I don't own an expensive car! My car is 1L city car (hence no road tax), it's used for work, driving 120miles (both ways) to see my only friend, giving me some freedom (I live in a single bed box room in a shared house, smaller than a prison cell) & access to cheap holidays. I have overestimated the petrol consumption as if I don't visit my friend/stay in I can make one tank last 2 months.

The car is on hp, I will NOT be terminating the agreement or selling it when I clear it. My plan is to keep this car for a minimum of 15years (since purchase), I have had the car 2.5years. It was £6k on the forecourt with 14k miles for a 2014. It's not a fancy 2019 model and its certainly not uneconomic. This is the first time in my life I have owned a car manufactured after the 2000's every other car has pre 1995.

The car is something I will not compromise on, sorry.

If I posted a SOA with £500 rent instead of rent and car repayment would we still be having this conversation?

CJRyder

I just wanted to wish you luck. You have a good plan which will hopefully work out for you!

ratrace

SmartSid wrote: »

The car is on hp

The car is something I will not compromise on, sorry.

If I posted a SOA with £500 rent instead of rent and car repayment would we still be having this conversation?

Ok, in regards to my last post i did not mean to offend you, i was just giving you a few diffrent prescative on how to get out of debt a lot quicker as thats the general point of the tread and thats how i did it over the last fews years, i was looking at the whole picture the income compared to debts vs assets

just to give you an idea the reason i suggested sell the car as that what worked for me to pay my debts off quicker that and getting a delivery driver job on the weekends to pay it off even quicker i persoally hated seeing my hard cash go on intrest every month and not make much of a diffrence to the principal

You bought the car for £6k and are paying £172 x 55 ish months (2.5 years are already paid ( 30 months) and the hp ends in Feb 2022 (25 months left) so it has cost overall £9,500 this is to give you an idea of the ammount of intrest payed over the term

as far as having a conversation in regards to £500 rent, it depends on the property and what you get and how close it is to work and if its in an expensive area if so does the salary make it worth paying the extra to live in that area etcc...

i undersatnd you dont want to compraise on the car and thats fine you asked for advise and thats what got me out of debt fast i had a lot of tools and other things i sold clothes on ebay etc... to get out of it, I wish you all the best on your debt free journey, and once again i apologise if i said anything that upset you that was not my intention.

SmartSid

Thanks ratrace, I am glad that removing your car outgoing was good for you but for me I don't think it will be good mentally or financially. I am probably top heavy on the car so even terminating the agreement will leave me in more debt with no asset to show for it. Plus no car because I have no savings and no access to cash to purchase a 'run around'.

I didn't buy the car for £6k, that was what the forecourt price was. I actually got a good deal with extras thrown in for free. Of course I am paying interest which is pre loaded but at the time I had no way to purchase a car except HP. During the 9 months prior to getting this car I paid £2.6k in car repairs (1995 car) & then the head gasket blew. Commuting using public transport/taxis was costing in excess of £200 a month and putting me at risk - a person was stabbed 10feet from where I was stood to catch a bus.

The cost of the car repayment and insurance is less than the cost of other ways to get to work. Weighing up the pros and cons I think the car payment is sustainable.

.

As with most employers we are going to be paid early in December however I will not use it until the 1st. All my Christmas gifts have been purchased and I have £20 for groceries between 20th and 31st. I am aiming to make another debt repayment before the end of the year.