When the bottom line figure is scary! But you have to start somewhere

edited 16 May 2020 at 3:56PM in Debt free diaries
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mrsmoneypenny90mrsmoneypenny90 Forumite
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edited 16 May 2020 at 3:56PM in Debt free diaries
Happy weekend everyone, 
This is my first thread on here but I have been a serial lurker for a while now. However, yesterday I decided enough was enough and I actually sat down and listed all of our debts. It was probably the scariest thing I have done, but do you know what, because I feel like I have some sort of plan now I already feel more positive and focussed to sort our situation out. For years I have been living in denial, booking fancy holidays on credit, buying friends expensive gifts that truth be told we could just not afford. Because we both felt like we had a good income it did not seem as scary having 'debt' and to be honest my Mum has always been of the attitude "you could die tomorrow - book the holiday!" and whilst the holiday memories are lovely they are tainted with guilt because I knew deep down we could not afford them. Anyway, enough of me rambling on but here is my SOA, any comments suggestions please do let me know :) 

Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2[b]

Monthly income after tax................ 2215
Partners monthly income after tax....... 2650
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 4865

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 520 (Two cars, unfortunately only recent agreements, but they are needed for work & reliable)
Rent.................................... 795
Management charge (leasehold property).. 0
Council tax............................. 130
Electricity............................. 35
Gas..................................... 35
Oil..................................... 0
Water rates............................. 17
Telephone (land line)................... 0
Mobile phone............................ 55 (for both)
TV Licence.............................. 12
Satellite/Cable TV...................... 42
Internet Services....................... 0
Groceries etc. ..................…...200
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 10
Car Insurance........................... 90 (for two)
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 14
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 (Christmas savings pot - £100 saved to date)
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Coffee Subscription..................... 25
Total monthly expenses.................. 2200
[b]
Assets[/b]
Cash.................................... 1600 (Emergency fund)
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 1600
[b]
Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 15000....(310)......0<
HP (car).......................12000....(210)......0[b]
Total secured & HP debts...... 27000.....-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Halifax .......................4475......132.......NaN
 MBNA..........................1685......46........NaN
Tesco..........................1830......55........NaN
Loan (25 mths left)............5800......235.......0
RBS............................3200......76........NaN
Aqua Card......................4673......146.......NaN
Barclaycard 3 .................14584.....332.......NaN
Barclaycard 2..................9330......210.......NaN
Barclaycard 1..................2735......65........NaN
Capital 1......................1000......46........NaN
HSBC...........................2721......76........NaN[b]
Total unsecured debts..........52033.....1419......-  [/b]
[b]
Monthly Budget Summary[/b]
Total monthly income.................... 4,865
Expenses (including HP & secured debts). 2,200
Available for debt repayments........... 2,665
Monthly UNsecured debt repayments....... 1,419[b]
Amount left after debt repayments....... 1,246[/b]

Total assets (things you own)........... 1,600
Total HP & Secured debt................. -27,000
Total Unsecured debt.................... -52,033[b]
Net Assets.............................. -77,433[/b]

So this is my debt free diary. As of January 2020 we have already cleared off the following
£3000 overdraft that we had been in for goodness knows how many years and many £££ in interest charges 
£250 overdraft 
Capital one credit card - £500
Tesco credit card - £350 
Any now that I have sat down and got an actual plan together I feel in control for once. I have filled out a credit card snowball calculator and because we are fortunate enough to have a decent amount of surplus money to throw at the debts the calculator says we can be debt free in 25 months which is incredible, I can kind of resigned myself to think we will be paying this debt off for the next 10 years. My aim is to get the debt paid off and have started to save for a house deposit by the time we are 33 (3 yrs to go!) as like many others we would like a home of our own and a family one day. 

Anyway, thanks for reading if you have made it this far, I'll look forward to following some of you guys too and picking up tips along the way.

MrsMoneyPenny x 
«13456

Replies

  • mrsmoneypenny90mrsmoneypenny90 Forumite
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    Afternoon all,

    so day one of the new serious frugal me 😊 at the beginning of May I put £200 into a Monzo ‘pot’ for groceries after being disgusted at how much we had spent in April on supermarket shops. I think as lockdown was a bit of a novelty then we splurged at the supermarket treating ourselves to the little luxuries in life. I had also done a lot of baking and just giving the baked goods away to ppl, although it’s a kind gesture (if the baking is any good 😂) it works out a dear do. And unfortunately I can not afford to keep doing this. 

    So back to the £200 budget for groceries, as of today we had £53 left in the pot to last 10 days until payday. I did a freezer inventory before I went to Aldi this am and managed to plan a whole week of 3 meals a day with what I already had in the house and a few extra bits from the shops for £26 so v pleased with that. It also is coincidentally just under half of our remaining budget. Get me. 

    Just putting it out there what frugal things does everyone do to reign themselves in at the supermarket ? It’s so easy just to throw That extra bottle of vino into the trolley... today I abstained! 
  • PonyloverPonylover Forumite
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    Always do a stock check before your food shop and write a list of what you NEED.
    Then stick to the list while shopping. Try some own brands, alot are just as good.
    Doing half your shops at Aldi helps too.

    Good luck!
    January 2020- starting point! Update jan 2021
    Loan 1: £10798 £5637
    Loan 2 (DH)  £4586 £3280
    Credit card 1: £2496 £1755
    Credit card 2 (DH): approx £1000 £600
    Mortgage: £234,235 £227,746
    Total debt: £252,125  £239,018
    Savings approx £2k. Approx £9k




  • MoneywhizzMoneywhizz Forumite
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    Well done on getting yourself organised and ready to tackle this debt. It is great that you are both ready to make changes to how you have been living and are committed to getting this debt gone. I just wonder though if your budget is realistic enough to stick to for over two years. You have obviously been used to spending money quite freely and cutting back to only £50 each per month for spending is going to be quite a shock. I see you also have nothing in the clothes/toiletries/haircut/holiday categories and I am not sure that it is going to be possible for you to live  in such a frugal way. I guess it will depend on how much you want to meet that debt free date and then get saving for a house deposit. The other thing you could look at, of course, is if there is any way you can bring in some extra income through surveys, selling on eBay, overtime, mystery shopping? If you could make some extra money it could go towards making life a bit less frugal over the next couple of years. Just some thoughts that might be worth considering. I wish you every success in your journey. 
  • WhySeaEmWhySeaEm Forumite
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    Hello, sounds like we're in a similar boat! I've bookmarked your diary and am wishing you lots of luck along the way. My only tip is to shop at Aldi if you can, I swear it's half the price of Sainsburys :)
  • mrsmoneypenny90mrsmoneypenny90 Forumite
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    WhySeaEm said:
    Hello, sounds like we're in a similar boat! I've bookmarked your diary and am wishing you lots of luck along the way. My only tip is to shop at Aldi if you can, I swear it's half the price of Sainsburys :)
    Hey there WhyseaEm, thanks for subscribing 😊 I am still trying to figure out how to subscribe to someone’s diary could you tell me how please? I have read your diary earlier today, well done on having your LBM 👋
  • WhySeaEmWhySeaEm Forumite
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    WhySeaEm said:
    Hello, sounds like we're in a similar boat! I've bookmarked your diary and am wishing you lots of luck along the way. My only tip is to shop at Aldi if you can, I swear it's half the price of Sainsburys :)
    Hey there WhyseaEm, thanks for subscribing 😊 I am still trying to figure out how to subscribe to someone’s diary could you tell me how please? I have read your diary earlier today, well done on having your LBM 👋
    I don't know if there's another way as I'm new here, but I just clicked on the 'bookmark' button which is on the top left of my screen when I'm on someone's first post. 

    And thank you! 
  • I’m seeing lots of high income high debt on here and it’s nice to know that we are not alone.  I know that sounds weird but I was reading through the debt free roll of honour for inspiration and I wish if had my lbm at the 6k,10k or even 12k point.

    good luck and I’m looking forward to reading your journey.  We’ve (I) have managed to pay off a whole credit card in 3 weeks (ok it wasn’t a high balance) but it’s a start and it’s motivating when you release what you could have done with that money.  Document everything and your soa will probably change half a dozen times in the first few weeks as you tweak it as you remember things and add them in :) 
    2 credit cards gone forever, just 6 more credit cards, 2 loans and 2 car loans to go! What were we thinking!
  • Some thoughts on your soa.  Maintenance for your cars?  Servicing costs and new tyres?

    no contents insurance?  Tip your house upside down and calculate what it would cost to replace everything that fell.  That’s a content and you need to make sure you have insurance just in case.

    life insurance?  Again a few pounds a month is really worth having and won’t make a huge difference to your debt free date.

    pop something away each month for dental/prescriptions as you will need something at some point and how nice would it be to have a little pot of money to cover or majority cover what you need.

    good luck 
    2 credit cards gone forever, just 6 more credit cards, 2 loans and 2 car loans to go! What were we thinking!
  • enthusiasticsaverenthusiasticsaver Forumite, Ambassador
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    As you say there are a few high earners on here over the last few days who have realised they have to get to grips with their debt and you have cleared around £4k already since January so obviously have found a way to make your budget work and meal planning is a great tool to help keep the grocery spend low.  You also have an emergency fund which is great. 

    Can you put the interest rates on the soa? 

    Well done on your progress so far. 
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected] All views are my own and not the official line of MoneySavingExpert.
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