Getting out of the vicious circle

outoftheviciouscircle

I was here a few years back. I can’t for the life of me remember my old password and no access to the email account linked so here I am again as the title suggests with a brand new diary. 
5 years ago I cleared all my debt, however I’m finding myself falling into the same bad habits and need to curb it now before I’m back in the same boat. 
I’m in no way in the same amount of debt as some people but it’s too much for my liking and the spending has to stop now. 
At present I estimate our debt to be around £7000 and I’m setting myself the challenge to clear all this in 12 months.  I’m sitting down and working it all out properly this evening. I hope it’s not more than I think. 

outoftheviciouscircle

So I’ve worked it out and it is slightly more than I thought £8080 to be presise. This is spread over 4 credit cards and a dfs 0% credit loan. 

I also owe my mother a lot of money. She lent myself and my sister £40,000 4 years ago. We pay her back £200 a month each. This amount was set by mother, it’s interest free and she will not allow me to pay a penny more. I would love to just pay more and clear it but she wants to know that if the worst was to happen that myself and my sister have had exactly the same. So getting rid of this is not an option and currently stands at around £35,000. This was not just thrown away but paid off our mortgage. 

katsu

Hello Out Of the Vicious Circle.  Welcome back.  Do you know what makes you spend more than you have coming in?  I'm thinking that might help you decide how to break out of the vicious circle for good.  
I wouldn't worry about the money for your mum as she has set out her approach to it, so the £200 is a monthly bill really.  

outoftheviciouscircle

katsu said:

Hello Out Of the Vicious Circle.  Welcome back.  Do you know what makes you spend more than you have coming in?  I'm thinking that might help you decide how to break out of the vicious circle for good.  
I wouldn't worry about the money for your mum as she has set out her approach to it, so the £200 is a monthly bill really.  

Hello Katsu. That’s how I look at it really, it would have only been money on our mortgage otherwise but with a lot more interest 

outoftheviciouscircle

I’ve been reading so many diaries this morning and been so inspired. You all do so well. I hope I can do as well. 

I realised, I didn’t really introduce myself. 

Our household is made up of myself, my husband and our 3 year old Labrador who is just like a baby. We both work full time, earning decent enough wages, have a nice home with a mortgage of just under £180,000. We enjoy our holidays which is where some of the debt comes from. If we saved we could afford them but we’ve always found saving a problem. 

I manage all the household finances and think sometimes DH should have a go himself then he might realise that his love of the words I WANT doesn’t always mean he gets. 

I’m not saying I’m perfect but he has very expensive taste and I tend to always give in. 

I was wanting to do an SOA but I’m having trouble getting the link to work so I’ll keep trying.

outoftheviciouscircle

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 0

Number of cars owned.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 1860

Partners monthly income after tax....... 1860

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 3720[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 572

Secured/HP loan repayments.............. 239

Rent.................................... 0

Management charge (leasehold property).. 10

Council tax............................. 140

Electricity............................. 35

Gas..................................... 35

Oil..................................... 0

Water rates............................. 25

Telephone (land line)................... 24.75

Mobile phone............................ 92

TV Licence.............................. 13.14

Satellite/Cable TV...................... 43

Internet Services....................... 0

Groceries etc. ......................... 200

Clothing................................ 50

Petrol/diesel........................... 200

Road tax................................ 15

Car Insurance........................... 70.48

Car maintenance (including MOT)......... 50

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 29.4

Pet insurance/vet bills................. 23.01

Buildings insurance..................... 10

Contents insurance...................... 10

Life assurance ......................... 20.46

Other insurance......................... 0

Presents (birthday, christmas etc)...... 50

Haircuts................................ 30

Entertainment........................... 200

Holiday................................. 400

Emergency fund.......................... 500[b]

Total monthly expenses.................. 3087.24[/b]

[b]

Assets[/b]

Cash.................................... 1000

House value (Gross)..................... 235000

Shares and bonds........................ 0

Car(s).................................. 18000

Other assets............................ 0[b]

Total Assets............................ 254000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 179885...(572)......1.6

Hire Purchase (HP) debt ...... 9000.....(239)......0[b]

Total secured & HP debts...... 188885....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Virgin Atlantic card...........2800......36........14.9

MBNA ..........................2700......29.83.....0

VA Card........................159.83....25........0

Loan off mother ...............35000.....0.........0

Creation.......................46.25.....0.........0[b]

Total unsecured debts..........40706.08..90.83.....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,720

Expenses (including HP & secured debts). 3,087.24

Available for debt repayments........... 632.76

Monthly UNsecured debt repayments....... 90.83[b]

Amount left after debt repayments....... 541.93[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 254,000

Total HP & Secured debt................. -188,885

Total Unsecured debt.................... -40,706.08[b]

Net Assets.............................. 24,408.92[/b]

outoftheviciouscircle

So I have just posted my SOA. Its a bit of an eye opener as I don’t budget for things like haircuts, birthdays, holidays at present and even if I did it’s still saying I would have over £600 left which I most definitely don’t. 

I’m currently in isolation for  2 weeks so I’m going to spend this time scrutinising every penny we spend 

outoftheviciouscircle

Okay I’ve spotted a couple of errors. Time to redo 

outoftheviciouscircle

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 0

Number of cars owned.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 1860

Partners monthly income after tax....... 1860

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 3720[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 572

Secured/HP loan repayments.............. 239

Rent.................................... 0

Management charge (leasehold property).. 10

Council tax............................. 140

Electricity............................. 35

Gas..................................... 35

Oil..................................... 0

Water rates............................. 25

Telephone (land line)................... 24.75

Mobile phone............................ 92

TV Licence.............................. 13.14

Satellite/Cable TV...................... 43

Internet Services....................... 0

Groceries etc. ......................... 200

Clothing................................ 50

Petrol/diesel........................... 200

Road tax................................ 15

Car Insurance........................... 70.48

Car maintenance (including MOT)......... 50

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 29.4

Pet insurance/vet bills................. 23.01

Buildings insurance..................... 10

Contents insurance...................... 10

Life assurance ......................... 20.46

Other insurance......................... 0

Presents (birthday, christmas etc)...... 50

Haircuts................................ 30

Entertainment........................... 200

Holiday................................. 400

Emergency fund.......................... 500[b]

Total monthly expenses.................. 3087.24[/b]

[b]

Assets[/b]

Cash.................................... 1000

House value (Gross)..................... 235000

Shares and bonds........................ 0

Car(s).................................. 18000

Other assets............................ 0[b]

Total Assets............................ 254000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 179885...(572)......1.6

Hire Purchase (HP) debt ...... 9000.....(239)......0[b]

Total secured & HP debts...... 188885....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Virgin Atlantic card...........2800......36........14.9

MBNA ..........................2700......29.83.....0

VA Card........................159.83....25........0

Loan off mother ...............35000.....200.......0

Creation.......................2000......46.25.....0[b]

Total unsecured debts..........42659.83..337.08....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,720

Expenses (including HP & secured debts). 3,087.24

Available for debt repayments........... 632.76

Monthly UNsecured debt repayments....... 337.08[b]

Amount left after debt repayments....... 295.68[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 254,000

Total HP & Secured debt................. -188,885

Total Unsecured debt.................... -42,659.83[b]

Net Assets.............................. 22,455.17[/b]

outoftheviciouscircle

I’m being so lazy today. Have no get up and go in me at all. Sitting in my bum all day has some advantages. I’ve traded DH old iPhone in so that should be £250 coming our way and also got him to finally cancel his amazon prime subscription. It’s only £7.99 a month but he can get it for free as one of his swappable only his ee contract. I’ve been on at him for ages about it. Isolation has it advantages 

savingholmes

Hi - thanks for sharing your SOA. I've been where you are - so just want to make a few  suggestions

• What can you do to reduce your mobile bill as that seems very high? Could you go sim only for a while? If you halved your current spend that would free up close to £500 per year
• Holidays are great but with the amount of debt you are in - I would trade the £400 pcm for more like £100 a month and throw and extra £3.6K a year at debt
• What are you spending your entertainment money on? Could you halve that for a bit? If you did you could save yourself £1.2K per year
• Could you sell your car(s) and get cheaper ones? This could reduce your debt burden. We got a really good run around car for £750. We did keep one nice one TBF but its paid off.
• Can you get a balance transfer for virgin as that is a really high rate?

I am assuming you don't currently have an emergency fund. If that is the case that is a definite priority. After you have £1K though, I would be tempted to throw the extra at the Virgin card for a while if you can't move it. If you did just those simple things you could potentially be down to just your mortgage and your loan to your mother within about 18 months. What do you think?