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

Mahsroh

Hi there. I don’t have a diary (yet!) but also fall into the “high income, high debt” category so will be watching with interest.

Good luck on your journey. 

mrsmoneypenny90

Good morning all, 
I have to say waking up to email notifications that you lovely lot have read my diary / signed up to follow is so motivating, it's great to feel like part of a community where we can all support each other. Debt has so many negative thoughts associated with it, for years i felt so guilty and embarrassed to admit we have this problem, but it was not enough to make us change our ways. I think i used to book a little holiday or treat us to something nice to cheer us up because we felt so low about it all. It sounds ridiculous now i am actually writing that, but i guess it is a bit of vicious circle. 

Anyway, @WhySeaEm thanks for sharing how to follow, i have been able to do that. @shoppingobsessed2020 I have not allowed for monthly car maintenance as they are both under 1 yr old and under warranty, and i have the emergency fund for anything that would not be covered. Also, re life insurance i have never really thought about that, luckily i (or my OH) would get 10 x my salary if anything should happen to me but he does'nt have anything in place so i should get him to sort that out, thanks for the reminder.

Also, here is an updated SOA, I think like you say @shoppingobsessed2020 it will take a few tweaks to get it right. I have also included interest rates @enthusiasticsaver;

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2215
Partners monthly income after tax....... 2650
Benefits................................0
Other income............................ 0
Total monthly income....................4865

Monthly Expense Details
Mortgage...................0
Car HP 1 ..................220

Car Finance 2………310

Rent..........................795
Council tax................130
Electricity...................35
Gas............................35
Oil................................0
Water rates..................23
Mobile phones.............55 (for both)
TV License..................12
Satellite/Cable TV........43
Internet Services...........0  (included with TV)
Groceries etc. ...............200
Clothing......................... 0
Petrol/diesel..................100
Road tax........................10
Car Insurance.................90
Car maintenance (including MOT)......... 0
Car parking...................... 0
Other travel..................... 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills.......14
Buildings insurance............0
Contents insurance............ 0
Life assurance ....................0
Other insurance..................0
Presents (birthday, Christmas etc)...... 20
Haircuts................................ 15
Entertainment........................ 100
Holiday................................. 0
Emergency fund................. 0
Nespresso subscriptions.........25
Total monthly expenses.................. 2232


Assets
Cash.................................... 1,600 (Emergency Fund)
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 0...............0.............0
Total secured & HP debts...... 0

Unsecured Debts
Description....................Debt...... ……………. Monthly..    .APR

Barclaycard 1…………..£2,735/ £3000……….£75……….19.20%

Barclaycard 2…………. £14,584 / £14,750…...£340……...16%

Barclaycard 3…………..£9,330 / £9500……….£250………17.6%

Aqua…………………….£4,673 / £5000……….£150…….17.60%

MBNA…………………..£1,727 / £2,000……….£55……….24.93%

Capital 1………………..£1,000 / £1,750……….£50……….19%

RBS……………………..£3,200 / £3,750……….£80……….15.7%

Halifax…………………..£4,475.30 / £4750……£140………28.55%

Tesco…………………..£1,830 / £2,000………..£60………..21.60%

HSBC…………………..£2,721 / £3,000………..£80……….21%

Bank personal loan……£5890 / £10,000……….£235……..(25 months left)

Total unsecured debts.................£52,165
Monthly Budget Summary
Total monthly income......................................... £4865
Expenses (including HP & secured debts)……. £2232
Monthly Unsecured debt repayments.................£1515

Available for additional debt repayments…..£1,118

I should say that this is our usual budget, however since lockdown my OH has had to take a voluntary pay cut to the FURLOUGH cap (£2,500 gross per month) and his employers are not making up the difference, but he is still working. Like he says though, at least he still has a job. They are still paying his £500 per month car allowance (gross) so I think that works out at about £2,150 net per month. Being honest when i found this out i panicked and applied for payment holidays on my car, my MBNA card, my Husbands loan and the two big scary Barclaycard repayments. I do understand that interest is still applied so probably not the best move. But actually it looks like we are going to have more spare money than before so i am going to use this, and the additional money not spend on fuel, to make a big repayment to the Halifax card as this has the highest interest rate and this was the way the snowball calculator told to do it. 

Feeling a lot more in control and motivated to do this, only 9 days till payday and we can chuck that lump sum off that horrible Halifax card that has been hanging around our neck for yrs... Have a good monday everyone  

Moneywhizz

Glad you are feeling more in control and less stressed about your debt situation. Being determined to bring it down is the big turnaround and sticking to your budget on a monthly basis is how you will get to the end successfully. That is why it is so important to make sure your budget is realistic and if you find you need to tweak it in the first few months that is perfectly ok. Your interest rates are very high, so any offers that you get to move your cards on to interest free deals would make a big difference to you. Enthusiastic Saver is great at working out how much interest you will be paying which is a great motivation to clearing the debt as soon as you can. That is clearly what you are planning to do and you have made a great start. 

WhySeaEm

'High income, high debt' describes us perfectly. I know what you mean about buying holidays to cheer yourself up. We do it with food- save money throughout the month then blow it in the final weekend on eating out loads. And that money just disappears. 

comeandgo

Do you have contents insurance?  It's not very expensive and I think a must.  Also, is your husband working for the employer who has furloughed him?  That is a big no no.

mrsmoneypenny90

Hi @comeandgo thanks for reading. 

To be honest we have never had contents insurance, very naive and stupid. I’m going to get on to that today! 

And my Husband has not been Furloughed he Is still working. But SOME employees in the company have been furloughed and so the company have said to the non furloughed staff that they must take a “voluntary” pay cut which mirrors the furlough cap. It seems unfair but he has only been with the firm for just over a yr and just before lockdown had a promotion which resulted in a £9,000 pay rise so he is just keeping his head down and getting on with it. There are people in much worse positions than us so we have to be grateful. 

enthusiasticsaver

Well done for finding out all the interest rates and I am guessing you can no longer get any 0% deals? There are two different ways of tackling the credit cards by using a snowball approach.  That means tackling one by paying minimums on all the others and directing overpayments to the first targeted debt then the next and so on. Some people start with the smallest debt on the grounds it gives them motivation and they see progress very quickly.  Others, and I prefer this approach, target the most expensive one first on the grounds you are paying most interest on those. I agree that tackling the Halifax card looks like a good move.  The only exception to this is if you have an overdraft most of them are  now charging 40% so you should pay that off first. 

mrsmoneypenny90

hi @enthusiasticsaver thanks for the comment. Thank goodness we cleared off a £3,000 overdraft in Feb this year after years of living in it without even thinking! The hike in interest rates really hit home and I put my derrière in gear so to speak! 

Halifax card is going down down down on payday, actually excited to pay it off, isn’t that sad 😂

enthusiasticsaver

So your income will be down by £500 this month due to Furlough but outgoings down by £1100 plus the £100 fuel payment? I assume your car is the £220 and your husbands loan the £235 monthly payment? That looks like you will have about £1800 spare to throw at the Halifax along with the normal payment of £140? As the debts on which you have agreed payment holidays are all charging less interest I think it makes sense to do that and put the £1940 towards that expensive Halifax debt. 

GeorgianaCavendish

Well done for starting your diary and facing up to the debts, it is definitely the scariest part but also empowering to feel fully informed about where your money is! 

I just wanted to quickly add my voice to all the people saying make sure you sort out contents insurance, but also consider using a cash back site when selecting a provider. I usually get £15-20 a year in cash back from our contents insurance policy which is like getting a 6 weeks free!