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45k debt... anyone want to help please?

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  • ryanm8655
    ryanm8655 Posts: 1,221 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    WhySeaEm said:
    Right, I've done my SOA again and updated my first post. It's much more realistic now as wife helped me along with our bank statements. We're both feeling awful about all the 'wasted' money, it's really shocked us!

    It leaves me with £1250 leftover which feels much more realistic. So my original goal of paying around £1k a month extra onto debt can definitely got up to £1250, which is an extra 3k a year. I'm thinking maybe I'll pay out that money at the start of every month rather than waiting til the end... when we get to the end of the month and see that figure it's so easy to think 'oh go on then, lets pop out for dinner' so if the money isn't there then we can't do that! 

    I’ve found I have the same issue, so I’ve worked out my budget for each month and anything that is left over gets ploughed onto clearing debts on payday.

    I’ve found it far more effective.

    My budget is less complicated than yours but the same principle applies.

    While I appreciate the point raised above, there are a lot of things in your budget that are non-essential so if you find things have gone up in price and you’re running low towards the end of the month, then you can cut back on those things to get you through (e.g. takeaway). Then make an adjustment, if you wish, the following month. It also encourages you to stick to things like the £400 grocery budget.

    Also take advantage of lockdown and hammer them hard. The lower the debt, the more of your payments go to clearing the debt rather than interest, so the process gets gradually faster. Likewise, once you’ve made a significant dent you’ll find you start getting more 0% balance transfer offers. When I first started I had about £30k debt, of which £20k was charging interest. Now I have about £17.5k and only £1100 is charging interest. Once it got to about £25k I got about £11k of new 0% offers, which I made use of and cancelled the paid off cards. It makes such a difference when a big portion of what you’re paying isn’t going on interest. I don’t know how often you check but Barclaycard used to give me a 12 month 0% offer on my existing card every month.

    You earn enough to make a good dent in your debt and still enjoy life. A few small cutbacks and you’ll be away. You must be saving a fortune with lockdown. I’m finding I’m able to spend about 2/3s of my income on debt at the moment.

    A few questions on your SOA, are the figures right for gas and electric? Seems quite high to me. I ask because I was once over £1000 in credit to my supplier, which was more than my bill for the year (they tried to say it was to cover the more expensive winter months ha).

    Your car insurance and maintenance seem high?  Though perhaps it’s for 2 cars rather than one. I budget around £600/year for maintenance and my insurance is £60/month with zero no claims and a driving conviction (when that drops off it will be about £30).

    August 2019: £28.8k

    November 2020: £0 (0% interest)

    My debt free diary: https://forums.moneysavingexpert.com/discussion/comment/77330320#Comment_77330320

    <br>

  • IrishSean
    IrishSean Posts: 397 Forumite
    Fourth Anniversary 100 Posts Name Dropper
    DrEskimo said:
    I think a lot of aspects of the budget can be revised to free up additional money to pay this down faster. I would potentially think about making a hypothetical budget based on only £80-£100k incomes and then see how you would cut costs.

    Remember this isn't forever. It's just a temporary situation to get yourself out of debt. How much you are willing to sacrifice now dictates how quickly you can sort this out and get back to living within your means and building wealth for yourself, not the banks.

    Obvious targets are food, entertainment and doggy care.
    What he said!👍

    If it were me i'd go hard and fast at that debt; if you can trim like mad on that monthly spend and push your 'amount for unsecured debt' close to 2 grand (a lot, I know) you could hammer that debt total in 2 years. 

    There was a programme on TV years ago, Pay off your Mortgage in 2 years. We started to overpay and took a shorter term then.. best thing we did.

    GL 
    Admin for Tilly Tidy to £1825 DFW challenge: 2021
    Rolling Total for 2021: £970
  • barbarawright
    barbarawright Posts: 1,846 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    I know lockdown won't be forever, but surely this is a good time to save on your entertainment  budget
  • WhySeaEm
    WhySeaEm Posts: 127 Forumite
    100 Posts Second Anniversary Name Dropper Combo Breaker
    Sncjw said:
    Be careful with paying it at the start. You may find you won’t have money to cover amount if they go up slightly such as food. Also you would then need to use credit cards to cover it and thus add more debt. Maybe pop it into another current account so it is set a aside and and there in case you need it. 
    Good point! I'll move it over to my old current account on payday and then if we need to dip into it we can, and actually pay it on the last day of the month. Thanks for the tip!
  • WhySeaEm
    WhySeaEm Posts: 127 Forumite
    100 Posts Second Anniversary Name Dropper Combo Breaker
    ryanm8655 said:
    A few questions on your SOA, are the figures right for gas and electric? Seems quite high to me. I ask because I was once over £1000 in credit to my supplier, which was more than my bill for the year (they tried to say it was to cover the more expensive winter months ha).

    Your car insurance and maintenance seem high?  Though perhaps it’s for 2 cars rather than one. I budget around £600/year for maintenance and my insurance is £60/month with zero no claims and a driving conviction (when that drops off it will be about £30).
    Yeah the car figures is for 2 cars which we both can't do without- pubic transport to work would take twice as long and cost just as much. 

    Gas and electric are sadly right. We live in a detached old 2 bed house and it just seems to eat it up. I switched to Bulb earlier this year which cut about 1/3 off our British Gas bills though, so that was good!

    You're definitely right about saving money in lockdown. We're only spending money on food at the moment.
  • WhySeaEm
    WhySeaEm Posts: 127 Forumite
    100 Posts Second Anniversary Name Dropper Combo Breaker
    DrEskimo said:
    I think a lot of aspects of the budget can be revised to free up additional money to pay this down faster. I would potentially think about making a hypothetical budget based on only £80-£100k incomes and then see how you would cut costs.

    Obvious targets are food, entertainment and doggy care.
    That's a good idea, I'll play with some figures later. 

    We could definitely try to cut down on food but we already do most of our shopping at Aldi. I could try harder though to do less shopping at Sainsburys mid week. 

    Entertainment could be cut down too but I still want us to be able to live a little with our son.  But I could cut it down. 

    Doggy care no such luck. He needs the doggy daycare as he's only a puppy and we're both key workers so out of the house long hours. It's the cheapest one I could find in our area. 
  • curlytop12
    curlytop12 Posts: 1,229 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    are you sure the overdrafts are staying at 0%? I'd be checking, and if not, prioritising them, bank can pull them in anytime.
    rent somewhere cheaper, or smaller?
    gas/electric are hgh-look at usage and a comparison site.
    entertainment-£300- look to lower this
    internet/ tv/cineworld/ netflix/ , high, look to lowering these-these are entertainment too?
    charity/lottery-£50 a month, gift when out of debt?
    what's other child expenses?
    look to lower mobile bills
    I couldn't spend that much on entertainment knowing I had that much debt personally.
    You will gets lots of great advice on here from those way more clever than me, keep posting, good luck, you can do this!
  • Willing2Learn
    Willing2Learn Posts: 6,294 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    edited 9 May 2020 at 12:23PM
    Just so that you know...the 'perfect' SOA (this is subjective) will have you having zero pence left over after everything has been allocated to your various categories.  This is called 'zero-based budgeting'

    You SOA should include savings targets too.  So for example you might have a category for a new car, or for your holiday of a lifetime.  Point is, nothing should be remaining if you are doing things right.


    Good luck again!

    Edit:  Forgot to say.  Don't forget to budget something so that your Emergency Fund grows.  In an ideal world an EF should have an approximate value equal to six months of expenses (housing costs, bills, contractual obligations, doggy care etc etc.)
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • Mahsroh
    Mahsroh Posts: 769 Forumite
    Sixth Anniversary 500 Posts Name Dropper Combo Breaker
    I would seriously look at where you’re living. Not sure where in the country you are but you SOA has rent at £1500pcm but you later say it’s a 2 bed property.

    We live in the south east (commutable to London) and we pay £1100 for a what I would call a “large/luxury” 2 bed house) 2 double bedrooms, en suite, decent sized garden). 

    I know the cost of moving (even when renting) isn’t cheap but if you can save £300/£400 a month you’d soon recover your initial moving costs. A more energy efficient modern property could help your utility bills too. 
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