Getting to grips with my debt! 26 January 2020 at 7:17PM in Debt free diaries 43 replies 2.2K views

Synchro

Hello everybody,
I posted on this forum last year.
Only the one post and then I buried my head back into the sand and accrued more debt. More fool me eh?
Anyways I have decided enough is enough!
This week I have spent a grand total of £23 only on food and a car headlight bulb.
I have spent money on petrol but that is covered by my work mileage allowance so I'm not concerned about that.
I have just completed an entirely realistic SOA and will post along with this introduction.
Most months I earn more than I have stated on here, but I thought I would be conservative with my figures.
Yes I do know my entertainment budget may appear high to some folks, but I have a beautiful new girlfriend and to be honest I don't see it as excessive in the slightest.
I'm Andy, 47 and I work in social research.
I am aiming to clear this debt by my 50th birthday in July 2022.
I will pull out all of the stops to achieve this, even a spot of freeganism from supermarket skips.Yep, I have no shame, lol!
Seriously I do believe I can achieve this, but would appreciate help and advice from peeps on the same journey and from the sages amongst you that have achieved being debt free.
Ask me any questions. I am for the most part an open book.
Here is my SOA -

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1631
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 292
Total monthly income.................... 1923

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 135
Clothing................................ 30
Petrol/diesel........................... 120
Road tax................................ 13
Car Insurance........................... 46
Car maintenance (including MOT)......... 125
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 50
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 110
Holiday................................. 0
Emergency fund.......................... 0
Therapy................................. 140
Total monthly expenses.................. 1109


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Tesco Credit Card..............6074.97...168.......18.9
Barclaycard....................9224.79...249.......21.9
Virgin Credit Card.............6342.64...104.......17.4
Total unsecured debts..........21642.4...521.......-


Monthly Budget Summary
Total monthly income.................... 1,923
Expenses (including HP & secured debts). 1,109
Available for debt repayments........... 814
Monthly UNsecured debt repayments....... 521
Amount left after debt repayments....... 293

Personal Balance Sheet Summary
Total assets (things you own)........... 500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -21,642.4
Net Assets.............................. -21,142.4

Synchro

Here I will add my credit card details and then ask 2 questions.....


Tesco




Cash - 30% - £286.89




Money Transfer - 23.9% - £2533.42




Purchases - 18.9% - £3164.73








Barclaycard




Cash - 27.9% - £733




Money Transfer - Nil Transfers




Purchases - 21.9% - £8216.62








Virgin Credit Card




Cash - 24.9% - £3654.30




Money Transfers - 20.8% - £811.84




Purchases - 17.4% - £1876.50


My questions are.......


1) Which order should I clear these credit cards in?


2) Should I apply for another credit card and take advantage of a 0% interest balance transfer deal?

Thanks in advance, Andy

Karonher

Firstly is everything included - if all the bills are in with the rent that is a good deal.

Are the car figures correct - it is worth £500 but you spend 3 times its worth on repairs each year?

Is the therapy ongoing or will it be ending soon?

The entertainment is not too bad under the circumstances but could you make the most of a few nights in using the cold weather as an excuse?

Normally the card with the highest interest rate should be tackled first. You could do a soft search to see if you would be accepted for a 0% deal.

Synchro

Hi Karonher,


Yes, I have a beautiful one bedroom flat with all bills included. I am a lucky guy!


My car is a 2007 Peugeot 207. My expenses are mainly for tyres as I sometimes do 1000 miles a week for my job.


The therapy is ongoing and may not end in 2020.


Thanks, help and advice truly appreciated.


Andy

middleclassbutpoor

3 years is a marathon when it comes to living within your budget.

I would agree with the above poster in that your SOA seems to raise a few questions for clarity.

2 ways of approaching the priority of debts - by highest interest rate or by lowest balance.

Highest interest rates will have you paying back the debt with less interest paid but lowest balance gives you the continued motivation as you clear them because you feel the progress. I tackle mine lowest balance first.

Unicorn_cottage

Hello Synchro

Glad you came back. Please do not bury your head in the sand anymore

The biggest win for you right now would be to move some of your debt to lower or nil % if this route is open to you. Have you joined https://www.moneysavingexpert.com/creditclub/ to check out any offers?

If you do earn a higher amount than the above stated in your SOA would it be possible for as soon as you get paid to ping that straight into your debts so it doesn't get swallowed up?

I would urge you to start an emergency fund Just so you have a little something should the sh*t hit the fan. Obviously your car is quite old so you will need to have a bit of money set aside should your car die

Synchro

Hi Unicorn Cottage,


Yes, anything I earn over and above the SOA total will be channeled straight into my debt.


My wage varies so much from £550 - £900 a week so I have been truly conservative with my SOA.


I have never defaulted on a payment so I will indeed look towards another credit card for a 0% balance transfer deal.


I will also squirrel away a grand for an emergency fund. My car is old and does have a few problems that I nurse it along with. However it is relatively low mileage. I have also spent a few quid on it so I am keen to keep it on the road for as long as possible.


Thanks for advice.


My head is firmly out of the sand now btw.

Synchro

Is it possible for a moderator to move this post into the Diaries section please?


I think a diary will help to keep me motivated.


Thanks,


Andy

enthusiasticsaver

I have moved this for you Andy

Synchro

Okay folks,


So now I have a diary on this ere site.


I have just applied and been accepted for a Halifax credit card.


I can balance transfer £3990 for a 3% fee and it is 0% for 16 months.


This means I can attack the Barclaycard that has the highest APR with immediate gusto.


The journey begins.....

enthusiasticsaver

Synchro wrote: »

Here I will add my credit card details and then ask 2 questions.....


Tesco




Cash - 30% - £286.89




Money Transfer - 23.9% - £2533.42




Purchases - 18.9% - £3164.73








Barclaycard




Cash - 27.9% - £733




Money Transfer - Nil Transfers




Purchases - 21.9% - £8216.62








Virgin Credit Card




Cash - 24.9% - £3654.30




Money Transfers - 20.8% - £811.84




Purchases - 17.4% - £1876.50


My questions are.......


1) Which order should I clear these credit cards in?


2) Should I apply for another credit card and take advantage of a 0% interest balance transfer deal?

Thanks in advance, Andy

If you can get a 0% interest rate card then it would be worth moving some or all of the debt as you are paying quite high interest rates. Do a soft search to see what you may be able to get. I don't think you will be able to move it all because of the level of unsecured debt you have.

If you cannot move any then tackle the cards with the highest interest rates. From the above it looks like you have taken cash advances (a big no no on credit cards), money transfers and used the card for purchases. It is imperative you no longer use these cards as everything you buy on them is costing you a lot more than their worth simply because of the interest added.

You need an emergency savings account to stop you turning to credit cards and save for car repairs.

I would tackle the Barclaycard first.

With regards to the soa.

Can you reduce the therapy sessions to cut the cost?
Can you make do with what clothes you have and not buy any new ones for a while?
Can you explain to your girlfriend you are saving and trying to clear debt so go for cheap nights out or stay in more often?
Your car is costing you a lot but from the sound of it you need one for work. It is therefore imperative you put money aside each month for repairs.
Can the pet and vet bills be reduced?

On the plus side your rent and bills are low and you seem to be able to live within a groceries budget.
What is the additional income of £292 for?

The biggest change for you will be that presumably you have been overspending for a long time and you have three years possibly to live within a constrained budget as your debt repayments are almost a third of your income and you have no savings. You will need to be much more disciplined and really think where your money is going to be able to tackle this. You also need to get out of the mindset of using the cards so ideally you would put them away so you are not tempted.