Finding money to pay off Debts 30 April 2020 at 9:05AM in Debt-free wannabe 19 replies 1.9K views

Moon2

Hi, I'm new to the forum I have been around reading and trying to get my head around it all for a few months.
I won't bore you with all the details but the gist is I have got myself into debt that I am struggling to get out of, I'm a single Dad and have my son 50% of the time, I don't go out drinking wasting money or buying clothes but I always have no money through poor money management, I should know better at my age I know ( 40 )  I have a good job which currently I know is very lucky I just want to sort the mess and buy a house get some security for me and my son.
Debts are around £28,000 this has been through a car loan, moving houses, deposits, fixing car issues as I didn't have an emergency fund to do it  I am now very aware of the mess and really want to clean things up. I have been trying to trim down my spending but I'm finding it hard,

• fuel is expensive as I do a lot of traveling with work and picking up my son,

• I'm locked in a mobile phone contract I can get out for about £800

• I've done an electricity/gas check and I can save about £20 a month on this if I change it 
• I  can no longer move my cards around due to the amount I have, I can only get an Aqua card with a limited 0% in the past I have moved things around and spent the extra money they give me, I know how stupid this is now!! 

any help would be appreciated, I know I need to find extra money to pay down the debt starting with the lowest first, etc but its finding that extra money that I am struggling with and I know now that when I have no money I use the cards to live for shopping or fuel. I am trying to somehow get an emergency fund just to give me a buffer.

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

Household Information[/b]

Number of adults in household........... 1

Number of children in household......... 1

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 2300

Partners monthly income after tax....... 0

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

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

Total monthly income.................... 2300[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 725

Management charge (leasehold property).. 0

Council tax............................. 121.41

Electricity............................. 46.9

Gas..................................... 46.9

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

Water rates............................. 26.25

Telephone (land line)................... 0

Mobile phone............................ 59.86

TV Licence.............................. 13

Satellite/Cable TV...................... 0

Internet Services....................... 33

Groceries etc. ......................... 140

Clothing................................ 16

Petrol/diesel........................... 160

Road tax................................ 17.5

Car Insurance........................... 59.37

Car maintenance (including MOT)......... 10

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

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

Childcare/nursery....................... 100

Other child related expenses............ 16

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 0

Buildings insurance..................... 0

Contents insurance...................... 0

Life assurance ......................... 0

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

Presents (birthday, christmas etc)...... 30

Haircuts................................ 15

Entertainment........................... 0

Holiday................................. 0

Emergency fund.......................... 0

Gym .................................... 27[b]

Total monthly expenses.................. 1663.19[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

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

Car(s).................................. 3000

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

Total Assets............................ 3000[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

MBNA...........................688.22....25........27.93

MBNA...........................7735.84...96.26.....27.93

Barclay .......................5767......139.9.....28.2

Loan...........................10000.....191.......3

Virgin.........................4400......49.97.....0[b]

Total unsecured debts..........28591.06..502.13....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,300

Expenses (including HP & secured debts). 1,663.19

Available for debt repayments........... 636.81

Monthly UNsecured debt repayments....... 502.13[b]

Amount left after debt repayments....... 134.68[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 3,000

Total HP & Secured debt................. -0

Total Unsecured debt.................... -28,591.06[b]

Net Assets.............................. -25,591.06[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

bamgbost

Well done for coming on and sharing. Im in similar boat...just come to self realisiation a month ago. So you are not alone...

Some quick wins I see...

Can you get discount on council tax. As a single person gets you 25% off. Also are you sure its spread out over 12months rather than 10.

2) Try change your utilities provider. "20 quid a month adds up

3) recheck your car insuraance. Hopefully you can pay less. we have 2 cars and pay similar to you as a total.

Im sure others will analyse this and suggest more. But well done for taking this first step!

EimearF

Put £50 a month into the budget for emergency fund as a minimum. 
You need life and contents insurance so budget something for those as well. 
As above switch your energy providers and look at the car insurance its sky high!
Do you need the gym at £27 a month, could you take up jogging or kettlebell at home? 
Throw every spare penny at that first MBNA, I would go for the barclaycard after that as its not too much high than than the virgin one but its high interest and the required minmum is higher too. 

enthusiasticsaver

Your car insurance is very high.  You do need to make building an emergency fund a priority as you have a low value car and say you need it for work.  While we are in lockdown can you save on fuel or are  you having to still travel for work? Utilities and council tax look high for a single person unless you are in a house rather than flat. 
Your biggest problem though is your debt as 25% of your income is going on debt repayments so you do need to stop adding to it by using cards for food and fuel when money runs out.  A much tighter budget will help with that.  Presumably you can stop buying clothes for a year and just make do with what you have and haircuts looks high.  My DH pays £5 for just a haircut and I think mens haircuts are usually available much cheaper than women so £15 looks high each month. Every little amount saved will help.  Move to sim only on your phone asap. 

I would use £50 per month as emergency savings and put the rest towards overpaying the debt. Tackle the lower MBNA first.  You need to stop using the cards full stop or this situation will get worse.  

Willing2Learn

Hi Moon2 and welcome to the forum 

My thoughts on your SOA:

Are you council tax instalments spread across 10 or 12 months?  Are you receiving the single person discount?
Are you water rates spread across 10 or 12 months?  Is it metered?
Ouch - You monthly rent must hurt...Where do you live?
Mobile phone costs can be drastically reduced by going SIM-only?  (I pay just £6 month)  Change this as soon as your contract ends.
Your clothing costs are unrealistic when you have a child.
Haircut costs can be 'trimmed' with a pair of clippers (Did you like the pun?)
You need to allocate something toward entertainment (or are you a monk by trade?)
You need to allocate something toward you Emergency Fund
Can you afford your gym contract?  You know you can workout from home....
Have you considered snowballing your unsecured debts?

The two differing snowball methods are described in the article linked below:
https://www.thebalance.com/debt-snowball-vs-debt-stacking-453633


Edit:  Oh yeah...almost forgot...Are you in receipt of child benefit? 
Are you eligible for working tax credits?

Have a check of your benefit entitlement using the calculator linked below:
https://benefits-calculator.turn2us.org.uk/AboutYou

Moon2

My thoughts on your SOA:

Are you council tax installments spread across 10 or 12 months?  Are you receiving the single person discount? - it's over 10 months and yes that's with a 25% discount, I am not entitled to any benefits it goes to mum. 

Are you council tax installments spread across 10 or 12 months? I am not sure on this ill check
Are you receiving the single person discount? yes I am
Are you water rates spread across 10 or 12 months?  Is it metered? - it is metered 
Ouch - You monthly rent must hurt...Where do you live? I live in Cheshire its a small 2 bed house this is standard really in this area.
Mobile phone costs can be drastically reduced by going SIM-only?  (I pay just £6 month)  Change this as soon as your contract ends. that's my big one as soon as it ends 
Your clothing costs are unrealistic when you have a child. I literally spend nothing on myself only work shoes if needed
Haircut costs can be 'trimmed' with a pair of clippers (Did you like the pun?) I did - I have done this in lockdown
You need to allocate something toward entertainment (or are you a monk by trade?) yes really I have nothing to spend on entertainment, I did do martial arts but the cost was too much so I cut it out
You need to allocate something toward you Emergency Fund - I agree like the others have said I think £50 saving a month 
Can you afford your gym contract?  You know you can workout from home....  yes I can do this
Have you considered snowballing your unsecured debts? yes that's my goal as soon as I find the money to throw at it

thanks for all the replys.. 

steve808

£700 a year on car insurance? I really hope it's a Ferrari or something similar? I'm a couple of years younger than you and l pay around £200 a year for my little fiesta.

Moon2

richardc316 said:

£700 a year on car insurance? I really hope it's a Ferrari or something similar? I'm a couple of years younger than you and l pay around £200 a year for my little fiesta.

haha I wish it was a ferrari, its a small old bmw 1 series 

Moon2

thanks for all the help so far, I have just found an insurance quote that is £444.25 a year and that includes RAC breakdown which I really need! that's a saving already of £350 if you include the breakdown, it would be cheaper if I paid in full but I can't do that at the minute.

Naomim

Have you registered with Quidco & Topcashback? They usually have good deals with insurances. 

Spinelli99

OP. I have no advice to add to all the good suggestions so far but I just wanted to say, well done for being such a good dad, you will get out of debt if you are strict enough with your budgeting, it might seem like forever to get there but if you keep your end goal in sight the long game will be worth it. Good luck, you deserve it.