Debt Free Wannabe 2020

chirpychick

Hi
I joined way back 9/10 years ago, we had 65k of debt, we went into an IVA, changed our entire lives (no exaggeration). But then we had a series of "disasters" and now we have debt again which i'm ashamed of but determined to sort out.

I want to post a SOA but I can't find where people go to do this?
If anyone can give me a link I will do that now and then post all my information.

DrEskimo

Yea see below:

https://www.lemonfool.co.uk/financecalculators/soa.php

Best of luck!

chirpychick

Thank You DrEskimo

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1 Disabled under 10 and home educated
Number of cars owned.................... 2 Essential

Monthly Income Details
Monthly income after tax................ 2241
Partners monthly income after tax....... 0
Benefits................................ 674 Includes childs DLA
Other income............................ 0
Total monthly income.................... 2915

Monthly Expense Details
Mortgage................................ 721
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 127 12 months
Electricity............................. 55
Gas..................................... 32
Oil..................................... 0
Water rates............................. 29
Telephone (land line)................... 16
Mobile phone............................ 69 Hubby will go sim only when contract ends in Dec
TV Licence.............................. 13
Satellite/Cable TV...................... 39 Will cancel at end of contract in May
Internet Services....................... 16
Groceries etc. ......................... 350
Clothing................................ 25
Petrol/diesel........................... 250 Hubby commutes
Road tax................................ 41
Car Insurance........................... 60
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 230 Therapy, clubs, education
Medical (prescriptions, dentist etc).... 11
Pet insurance/vet bills................. 29
Buildings insurance..................... 8
Contents insurance...................... 8
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 5
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Pet Food & related ..................... 50
Total monthly expenses.................. 2314


Assets
Cash.................................... 1000 Emergency Fund
House value (Gross)..................... 280000
Shares and bonds........................ 0
Car(s).................................. 6000 Possibly less
Other assets............................ 0
Total Assets............................ 287000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 125658...(721)......1.99 17 years left
Total secured & HP debts...... 125658....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
AA Loan........................12000.....241.......7.9 4.5 years left
V12 Finance....................1500......42........0 18 months left
H Amex.........................310.......25........22.9
Me Amex........................200.......25........22.9
H Sainsburys CC................1800......50........0
Me Virgin......................1714......25........0
H Halifax CC...................721.......25........0
Total unsecured debts..........18245.....433.......-


Monthly Budget Summary
Total monthly income.................... 2,915
Expenses (including HP & secured debts). 2,314
Available for debt repayments........... 601
Monthly UNsecured debt repayments....... 433
Amount left after debt repayments....... 168

Personal Balance Sheet Summary
Total assets (things you own)........... 287,000
Total HP & Secured debt................. -125,658
Total Unsecured debt.................... -18,245
Net Assets.............................. 143,097

Created using the SOA calculator at https://www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.

So we have 1 disabled child who is home full time, I am his carer and have my own health problems, I have no support from family and hubby often works away so I can't work right now. But I do surveys and sell things on ebay etc when I get chance.
We have 3 dogs, 3 chickens and a Hamster.
We do need 2 cars. I need my big car for wheelchair etc.

We are quite good with money in general but we had a lot of bereavments and health problems last year and during the emotional stress everything just went haywire. We are also terrible for spoiling our son which we have discussed and will reduce drastically.
I do not get haircuts neither does my son hubby goes once every now and again.
We rarely buy new clothes, if we need clothes for us we just go without or ask at Birthdays and Christmas. Our son requires certain items his 1 and only pair of shoes cost £50 and quite often I will buy his clothes and then he can't wear them so I tend to try and look for second hand, freecycle, freegle etc

I know we can pay our debt back and quite quickly but Id like advice on the best way to do it quickly as we live in a tiny house and we need to move for my sons benefit and would like to be able to do that next year. We are in the SE and live in a tiny 2 up 2 down. We need to be able to afford something for 325k at a minimum to give him the space he needs for mobility etc. SO this is the drive really.

DrEskimo

The immediate thing that could make a small difference is shopping around for your energy. £87 for both seems high, even with both you and your child in all day.

I also live in a 2 up 2 down, and I pay <£50 per month for both gas and electric. I moved to Octopus last year and they have proved to be the cheapest. I don't know what the forum rules are on referrals, but you can also get £50 credit if you use a referral code (the person referring also gets £50). I posted my link on another forum and got a quite a bit of credit that way too. Happy to provide you mine if you find they are cheaper for you (pending forum rules).

The second aspect is more tricky, as it's rarely cheaper to change cars, but your husbands commuting costs seem on the high side. VED is around £492 a year, with high insurance and high fuel bill all could point towards a pretty inefficient car? That being said, changing car would be very difficult with no capital...

Do you actually have £168 surplus each month, or is this what you hope for now while reducing your spending on the little one? With a bit of belt tightening and surplus from reduced mobile and energy bills, you could snowball the smaller debts quite quickly I think. Using a debt snowball calculator and assuming you can get a budget that gives you £250 surplus to throw at the debts, paying them smallest to largest, you could be in a position where by the end of the year you will have cleared all debt except the Sainsbury CC and AA loan, which would be at £1200 and £9,000 respectively given the current payments.

chirpychick

We do have an inefficient 35+ year old boiler. With joint issues for the 2 of us I have to say I do tend to have the heating at 20 most of the time and bump it to 21 at bath time. Talking to my husband he thinks our boiler costs us an extra £10-15 a month. But with plans to move and no cash we don't feel in a position to get it changed.

The car situation is something we are talking about - we both drive 13 year old s max big engines and diesel. We do not need 2 big cars but we do need 1 big car. He is actually currently in negotiations about a new job only 6 miles away which would be great for more money and less commuting costs (business trips are covered) so we are just holding off on changing these until we know what is to come. Also as you say it's quite tricky to do and as he needs his essentially more than I do I could potentially be out of a car if he sold his and then had to find something else and that is out of the question during the winter because of my sons health. But definitely thinking about this. There is also an emotional aspect as his car was his brothers and his brother passed away.
I never really budget for clothes or shoes or car repairs we use all surplus money and plough it into the debt. Then if anything crops up we use the emergency fund and top it up the following month.

a_silver_lining

No major help from me, but quick question -

Is Hubby on 35k? Because I can't see how his salary will enable you to borrow 170k mortgage? Unless you manage to include benefits or get a 5x mortgage.

chirpychick

He plans to withdraw from his private pension to give us the extra we need. Ordinarily not something we would do but we've taken advice on it. Plus a new job potentially would increase his earnings also (not counting our chickens so to speak)

DrEskimo

chirpychick wrote: »

He plans to withdraw from his private pension to give us the extra we need. Ordinarily not something we would do but we've taken advice on it. Plus a new job potentially would increase his earnings also (not counting our chickens so to speak)

Make sure you think very very carefully about this...

chirpychick

Absolutely, no decision has been made, we despite our current debt are very sensible people. We wont do anything risky. Even if it means staying put. It's just something we are talking about and have sought advice about in the last 6 months.

DrEskimo

chirpychick wrote: »

We do have an inefficient 35+ year old boiler. With joint issues for the 2 of us I have to say I do tend to have the heating at 20 most of the time and bump it to 21 at bath time. Talking to my husband he thinks our boiler costs us an extra £10-15 a month. But with plans to move and no cash we don't feel in a position to get it changed.

The car situation is something we are talking about - we both drive 13 year old s max big engines and diesel. We do not need 2 big cars but we do need 1 big car. He is actually currently in negotiations about a new job only 6 miles away which would be great for more money and less commuting costs (business trips are covered) so we are just holding off on changing these until we know what is to come. Also as you say it's quite tricky to do and as he needs his essentially more than I do I could potentially be out of a car if he sold his and then had to find something else and that is out of the question during the winter because of my sons health. But definitely thinking about this. There is also an emotional aspect as his car was his brothers and his brother passed away.
I never really budget for clothes or shoes or car repairs we use all surplus money and plough it into the debt. Then if anything crops up we use the emergency fund and top it up the following month.

Yea replacing the boiler isn't something I would consider. Worth looking at your standing charge and kWh cost for both gas and electric and seeing if you can get a better deal elsewhere.

If you can calculate your kWh use over a typical year, you can punch it into calculators like USwitch and see if you can get better rates.

Yes apologies I forgot the cost was for two cars, so not as high as I initially thought.

middleclassbutpoor

Without changing anything.... a basic/rough calculated snowball method of you becoming debt free..

1 - use your £170 overpayment to pay off the 2 amex cards (done within 3 months)

2 - your overpayment now goes to £220 with the £50 that you were paying to the amex card - use this to pay the husbands Halifax CC at £721 - (done within 4 months)

3 - you will now be at £245 to overpay your debts. - apply to your V12 finance - (done within 6 months)..

4. your overpayment will now be at £290 roughly - apply this to husbands sainsburys cc. (about another 7 months)

5 - You now have £340 to overpay - apply to your virgin cc = 5 months to repay

You will have paid all your debts apart from your AA loan within around 2 years (dependent on when 0% rates run out)

6 - This gives you £365 to overpay your AA loan - you should be able to pay within a year/15 months

Unsecured Debts
Description....................Debt......Monthly.. .APR
AA Loan........................12000.....241.......7. 9 4.5 years left
V12 Finance....................1500......42........0 18 months left
H Amex.........................310.......25........2 2.9
Me Amex........................200.......25........22 .9
H Sainsburys CC................1800......50........0
Me Virgin......................1714......25........0
H Halifax CC...................721.......25........0
Total unsecured debts..........18245.....433.......-

Now if you apply the same method but can increase the amount you repay through being brutal to your budget and really knuckling down, you could clear that all within 2 years.

You should put the figures into a snowball debt calculator for more accurate timings.

Withdrawing from a pension is not required - assuming you're at the age when you can.