Want to be debt free...where to start?

ceb1995

one place I can see that you could find some money from is groceries, could you swap to a cheaper supermarket? make sure you're meal planning if you don't already. is the storage something you could perhaps sort through and sell on anything you don't need and gradually work through the house and do the same, you'd be surprised how much you could make to go towards clearing the debt by doing that. 

gagan23

One of my friend is good advisor, let me ask him for the same.

Singlespeeder

"Total monthly expenses 39885"
Patently not correct .... not helped by
"Monthly Expense Details

Secured/HP loan repayments 6353"

Have a quick rework of the SOA

Food could defo be trimmed....

Kiittykatz

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary	Amount(£)
Total monthly income	5,943
Monthly expenses (incl. HP & secured loans)	4,368.15
Available for debt repayments	1,574.85
UNsecured debt repayments	901.16
Amount left after debt repayments	673.69

 

Personal Balance Sheet Summary	Amount(£)
Total Assets (things you own)	0
Total Secured & HP Debt	-437,001
Total Unsecured Debt	-55,177
Net Assets	-492,178

Household Information

Number of adults in household	2
Number of children in household	2
Number of cars owned	2

Income, Expense, Debt & Asset Details

Income	Amount(£)
Monthly income after tax	3500
Partners monthly income	1516
Benefits	0
Other income	927
Total monthly income	5943

 

Expenses	Amount(£)
Mortgage	977
Secured/HP loan payments	635.3
Rent	0
Management charge (leasehold property)	132.78
Council tax	112
Electricity	83
Gas	0
Oil	0
Water Rates	25
Telephone (land line)	0
Mobile phone	10
TV Licence	13.2
Satellite/Cable TV	0
Internet services	25
Groceries etc.	384
Clothing	54
Petrol/diesel	114.7
Road tax	0
Car Insurance	50
Car maintenance (including MOT)	0
Car Parking	7.4
Other travel	0
Childcare/nursery	877
Other child related expenses	31.66
Medical (prescriptions, dentists, opticians etc.)	0
Pet Insurance/Vet bills	0
Buildings Insurance	0
Contents Insurance	0
Life Assurance	70.27
Other Insurance	0
Presents (birthday, christmas etc.)	83.33
Haircuts	15
Entertainment	50
Holiday	100
Emergency Fund	0
clothes	28
school fund	8
eating out	78.51
coffee snacks etc	23
(Unnamed monthly expense)	0
Dentist	23
car lease	156
charity giving	13
storage	20
service charge 2nd property	168
Total monthly expenses	4368.15

 

Secured & HP Debt Description	Debt(£)	Monthly(£)	APR(%)
Mortgage	221362	(977)	1.81
2nd property mortgage	215639	(635.3)	3.49
Secured & HP Debt totals	437001	-	-

 

Unsecured Debt Description	Debt(£)	Monthly(£)	APR(%)
HSBC Loan	6329	126.5	6.3
Barclaycard CC	8403	178	6.9
Loan	19625	283	6.9
HMRC	2000	10.83	6.5
overdraft	1500	9.83	7.2
halifax CC	10594	109	0
kitchen loan	1491	106	0
water arrears	300	0	0
service charge arrear	935	78	0
Mum	4000	0	0
Unsecured Debt totals	55177	901.1600000000001	-

 

Asset Description	Value (£)
Cash	0
House Value (Gross)	0
Shares and bonds	0
Car(s)	0
Other assets (e.g. endowments, jewellery etc)	0
Total Assets	0

Comments on the results

You have sufficient monthly income to meet your expenses and your minimum monthly debt repayments with £673.69 left over. You can use this to pay off your debts more quickly or to build/top-up an emergency fund. Your total secured debt is greater than the value of your house. Is this correct? Whatever your results show, it always pays to seek advice or comments from others. Why not post your SOA details on our Debt Management discussion board or on your preferred discussion forum elsewhere. Thankyou for using the SOA Calculator at www.stoozing.com.

Kiittykatz

Updated SOA in previous comments. Been looking at Dave Ramsey. Like the snowball plan so currently working on a sball calculator. Thanks all

monetxchange

You have a healthy surplus here (if this is a realistic budget) and you can just go hard and get everything paid off, scorched earth like Dave Ramsey says.

You could even go tighter and stop the eating out, don't buy clothes unless desperate. Charitable giving when you're behind on your own water bill? Sounds selfish, but look after your own needs and essentials first before you're in a position to resume this in the future. Presents for kids only, skip a holiday. Clear out the storage, chuck it and stop paying for it -  if it's sitting in storage unused it's hardly essential to you!

I'd also bet a lot of the run up debt is buying stuff - what can you sell to get a nice lump sum to throw at the debt? You can absolutely do this. Good luck!

Kiittykatz

@monetxchange Thanks for the encouragement! I agree with your points. There is a lot more I can tighten up on. Just feel better about having a plan and the snowball that is talked about a lot makes sense now. I always felt I should pay high interest rate first but knocking off the small amounts is exactly what I need to do to motivate and see results quick

greensalad

I'm here to be the YNAB Evangelist. You have a healthy salary which suggests that you just don't know where your money is going if you're still struggling in debt. I am similar salary and was in a similar situation to you for a long time.

Anyway, I think You Need A Budget. Whether you use the software I'm suggesting or find something else, you need to start completely focusing on your budget for each thing you're spending on. Clearly you are overspending and you need to identify on what.

I recommend categorising and logging every single transaction you make for a month. 3 months if you can. You'll soon see where money is disappearing without you realising once you see a full monthly spend figure.

From there, you can make a plan of a) how to reduce and b) snowball to use up that £600 odd surplus (plus any you manage to reduce simply by not overspending). Depending on how anal you are you can go really granular. Personally I have categories even down to our £15 car tax per year. Yes, I set aside £1.25 every month just to pay our car tax bill (and a lot of other things in a similar fashion).

I think if you can get a firm grip on your money and where it is going you can start crunching the numbers and see just how far away you are from being debt free and the financial freedom that comes with it.

jjdc

You're £1200 in to your overdraft, yet you apparently have £600 a month left over each month, I think your SOA is nowhere near accurate, unless of course 6 month ago your overdraft was £8000.

Kiittykatz

jjdc said:

You're £1200 in to your overdraft, yet you apparently have £600 a month left over each month, I think your SOA is nowhere near accurate, unless of course 6 month ago your overdraft was £8000.

Hi, thanks for the response. Can you please explain what you mean because I’m not following! Thanks