Too much debt, where do I start?

Indout96

vixx_123 said:

welshspendthrift said:

 car insurance includes breakdown cover amount of £16.40 as well.the form I used combined) 

It does seem a lot. Mine and DH car insurance for our car is just over £30 a month and this includes RAC breakdown cover (in our 30s, fully comp, leisure commute, 6yrs no claims, quite high mileage as I know all these things impact price)

The main thing is where you live I am 58 with 30 + years NCB on a 1.6 D Volvo and only 8k miles but higher than your £30 as live close to Bradford, mind you if you can drive here everywhere else is a doddle even Rome 

katsu

Read the main site articles on breakdown cover. You are paying about £180 a year. You can save over £100 on this. 

Drawingaline

Lots of advice on the debts so won't say anything more re those.

However regarding socialising with friends, you have a national trust membership, once we are able to, arrange to meet up at a local site, take a flask of coffee/tea and go for a nice walk and a chat. Socialising does not have to be expensive. Lots of people are feeling the pinch of furlough, redundancy etc right now, learn to say, it's not in the budget this month, can we plan that for next month, (and then find a way to finance it cutting back on groceries etc) meanwhile shall we arrange to meet for a walk etc etc. 

welshspendthrift

welshspendthrift said:

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

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 0

Number of cars owned.................... 1 by me. 

Monthly Income Details[/b]

Monthly income after tax................ 2800

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

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

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

Total monthly income.................... 2800[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 650*

Secured/HP loan repayments.............. 250

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 90*

Electricity............................. 66 Both elec and gas dual fuel bill**

Gas..................................... 0

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

Water rates............................. 13.50**

Telephone (land line)................... 25**

Mobile phone............................ 32

TV Licence.............................. 6.5**

Satellite/Cable TV...................... 0 We cancelled sky tv about 3 months ago

Internet Services....................... 0

Groceries etc. ......................... 200** we need to cut down on this

Clothing................................ 20

Petrol/diesel........................... 200 ( not this much currently as working from home mostly)

Road tax................................ 12.5

Car Insurance........................... 39.00
aa breakdown 15.56 

Car maintenance (including MOT)......... 35

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

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

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 50

Pet insurance/vet bills................. 13.3** 2 cats 

Life insurance for mortgage not buildings insurance ..... 55** I am diabetic and partner is a smoker so premiums higher

Buildings and Contents insurance...................... 15**

Life assurance ......................... 15

Other insurance......................... 2.5** curry’s fridge insurance

Presents (birthday, christmas etc)...... 40

Haircuts................................ 30

Entertainment...........................Won a prize which means I now have this free for 6 months  29.00 club re emotional eating support group

Holiday................................. 

Emergency fund.......................... 25.00this going forward not yet established

Prof registration ...................... 8

Settee jen.............................. 59 this will end at the end of December 

National trust ......................... 5.3**

Total monthly expenses.................. 1958.16

[b]

Assets[/b]

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

House value (Gross)..................... 250000

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

Car(s).................................. 13500 having checked similar cars on autotrader seems I undervalued the car. ( car is needed for work and grandchildren transport) 

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

Total Assets............................ 258000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 200000...(650)......0 Now balance is 140000.00

Hire Purchase (HP) debt ...... 7480.....(250)......0[b]

Total secured & HP debts...... 147480.00..-.........-   [/b]

[b]Unsecured Debts[/b]

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

Barclaycard....................7733.37...120.......Currently 0%Was 17.03%

Creation.......................6738.45...120.......0% prior 29.9%

Halifax loan...................8144.77.....217.10 .....11.5% Interest being stopped for 35 days From today. 

Next...........................1891.71...30........0% was 23.9%

New day........................1336.63...24........0% was 34.080%

Halifax mastercard.............11076.5...£0 ....Interest Stopped now 18.8% now defaulted the recovery team will contact within 60 days 

Total unsecured debts..........37081.43.. 511.11 current payments

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,800

Expenses (including HP & secured debts). 1958.16

Available for debt repayments........... 841.84

Monthly Unsecured debt repayments....... 511.10 (will need to add payment to Halifax cc when agreed) 

Amount left after debt repayments....... 330.00

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 258,000

Total HP & Secured debt................. -207,480

Total Unsecured debt.................... -37,081.43[b]

Net Assets.............................. 13,438.57[/b]

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

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

Hi Thank you everyone I have amended the SOA the car insurance figure was incorrect, also what I thought was buildings insurance is actually our life insurance linked to mortgage, so buildings and contents is together and my half of it is £15.  water rates were also incorrect think that figure I got from last year when DD and family stayed here in house move process. 

I have paid £72 extra to the car loan today 
Babystepper thank you , no big purchases planned, we will downsize if needed to retire in a few years , would also like us to overpay on mortgage out of joint account, I hope we can cut down on the food budget by at least a £100. 

TheR3ader said:

You've done a great job on clearing your overdraft, it's an excellent milestone to achieve! There's a lot of practical advice given above so I won't re-iterate on that.

I found with my debt it didn't start going down until I addressed my emotional relationship with money. For a lot of people, making a budget is enough for them to stick to getting out of debt, for others, it's not so easy. My advice would be to spend a bit of time with yourself and exploring your relationship with money. What does spending money give you? How do you feel about it? What does having it/not having it mean to you? It will take time but you can get there! Work on both the practical aspects as well the emotional triggers, it's hard but worth it in the long run.

Thank you I think you make a really good point about addressing my  emotional relationship with money, I have an emotional comfort eating relationship with food and think it’s also true with money. 

Thank you Sorry haven’t named everyone but appreciate all your helpful advice, my next step is to update my signature so I can update on the reduction to keep me motivated and get some eBay sales done this weekend too

Thank you 

TheAble

Are you really paying £50/month for a landline? If this is for your internet connection you can probably shave £30/month off that.
I would sell the car and buy something cheap and reliable. You're burning a huge amount in petrol, how many miles a month is that?
Mobile phone is excessive unless in contract, I pay £5 for a decent sim-only package
Buildings insurance insanely high.
Two lots of life assurance - why?
Groceries way high for two adults.
Fridge insurance? Come on. Insurance is to protect you from catastrophic loss, eg your house burning down. Not the fridge going on the blink.
£400/yr in car insurance? I pay half that for two cars.
Sorry if I sound critical, I appreciate this stuff isn't necessarily obvious. Just wanted to give a few areas to work on.

welshspendthrift

TheAble said:

Are you really paying £50/month for a landline? If this is for your internet connection you can probably shave £30/month off that.
I would sell the car and buy something cheap and reliable. You're burning a huge amount in petrol, how many miles a month is that?
Mobile phone is excessive unless in contract, I pay £5 for a decent sim-only package
Buildings insurance insanely high.
Two lots of life assurance - why?
Groceries way high for two adults.
Fridge insurance? Come on. Insurance is to protect you from catastrophic loss, eg your house burning down. Not the fridge going on the blink.
£400/yr in car insurance? I pay half that for two cars.
Sorry if I sound critical, I appreciate this stuff isn't necessarily obvious. Just wanted to give a few areas to work on.

The land line is also for internet , but I do need to have a look see if I can get that cheaper. Will start a log of mileage ( if in work miles I can claim back) and fuel cost, this is when I was not working from home possibly start again at office after lockdown. One life insurance is one I’ve had for years, value has dropped but should pay for funeral, will look into it further.The one that’s expensive is the one linked to life of mortgage , think I should look at whether this can be changed. 

Yes I get that about fridge insurance  will talk to partner re cancelling that. 

Car insurance I did shop around maybe it’s area we live in? Think there is some cost to paying monthly too. I will check renewal date. £100 a year for each car insurance? Is that fully comp too? How did you find that? Comparison site? Thanks for the advice

SandyShores

Hi WST, I've recently come through a journey to pay down my debts - at the start we had two cars on finance and about £25k debts - which we kept paying off but kept coming back - we also sold our house and I had a bit of a job disaster - which was sort of the start of it all.  So keep going, you've had your lightbulb moment, you've got a good job so from what I can see you will be able to do this.  It might take a little time, but at the end of that time you'll be in a good position and you'll be able to help out your family once again without risking your own financial position.

Like lots of people, we had a good income but we spent more than we earned.  I know you also said that you should in theory have money left over but don't.  The one thing that helped me was to set up separate accounts for personal spends - so instead of spending whatever is left over, I physically allocated 'spending money' to separate personal accounts (for personal spends only) and the rest of the money in my other account was only used for bills/debts.  It took a bit of working out what the best amount was and at the moment for us its £400/mth - (£5k a year).  Its worked for us because we don't dip into the bill money now and I think that £5k a year is a really good amount.  DH could easily spend way more but its really helping keep his spending in check.

On your emergency fund - I've set up a £25 monthly payment to Premium Bonds.  There's a very slim chance of a prize, and there's less chance of me spending it.  I did draw most of it out just recently when we moved house so its not too difficult to get your hands on for an emergency.  I also follow Dave Ramsey and Anthony O'Neal on instagram - its really motivating.  

Good luck on your journey.

welshspendthrift

SandyShores said:

Hi WST, I've recently come through a journey to pay down my debts - at the start we had two cars on finance and about £25k debts - which we kept paying off but kept coming back - we also sold our house and I had a bit of a job disaster - which was sort of the start of it all.  So keep going, you've had your lightbulb moment, you've got a good job so from what I can see you will be able to do this.  It might take a little time, but at the end of that time you'll be in a good position and you'll be able to help out your family once again without risking your own financial position.

Like lots of people, we had a good income but we spent more than we earned.  I know you also said that you should in theory have money left over but don't.  The one thing that helped me was to set up separate accounts for personal spends - so instead of spending whatever is left over, I physically allocated 'spending money' to separate personal accounts (for personal spends only) and the rest of the money in my other account was only used for bills/debts.  It took a bit of working out what the best amount was and at the moment for us its £400/mth - (£5k a year).  Its worked for us because we don't dip into the bill money now and I think that £5k a year is a really good amount.  DH could easily spend way more but its really helping keep his spending in check.

On your emergency fund - I've set up a £25 monthly payment to Premium Bonds.  There's a very slim chance of a prize, and there's less chance of me spending it.  I did draw most of it out just recently when we moved house so its not too difficult to get your hands on for an emergency.  I also follow Dave Ramsey and Anthony O'Neal on instagram - its really motivating.  

Good luck on your journey.

Thanks SandyShores, I think the idea of a separate account for personal spends is a good one, my vice is music gigs so that would be good to restrict those ( Covid has cancelled loads for this year so been good in that respect although missing the live music) , if no money left then can’t go!  I’m going to get OH to set up somewhere for the EF so it doesn’t get swallowed up in grocery overspend. I’ve had a look once on Dave Ramsey, but hadn’t heard of Anthony O’Neal But will have another look at them. Need all the help I can get , thanks for all your suggestions 😀

SandyShores

I'm following Dave Ramsey's baby steps - the first one is to get £1,000 saved into an emergency fund as fast as possible, so you don't have to put any more on the cards/loans.  The next step is to pay off all your debts.  There's a debt snowball calculator on here somewhere to help with that.  Good luck with it all here's a link to the baby steps;  https://www.daveramsey.com/dave-ramsey-7-baby-steps#baby_step_1

Anthony O'Neal is also really positive, there's a link to an article about him here:  https://www.success.com/anthony-oneal-can-help-you-get-out-of-debt/  

enthusiasticsaver

You have a fairly decent surplus on the presumably temporary payments so you have a great opportunity to save that £330 plus the £59 for the settee from January so that you are in a position to tackle the most expensive of the debts when they start charging full interest again.  I would not rush to overpay initially but concentrate on saving any surplus and living within the budget as long as they aren't charging interest so the exception may be Halifax.  You won't be able to get new credit as you now have defaults so you need access to a decent emergency fund. As you don't appear to have savings this should be your priority.  The only exception to this would be if you are  tempted to dip into the savings  for other unbudgeted stuff in which case I would overpay the New Day which was not only the most expensive but also the smallest debt so clearing that will give you a good win and get rid of one of the cards.  Make sure you close them as you clear them. 

There is one more thing I would say and as a mother and grandmother myself I understand how difficult it is to see our children struggle and I love helping my DDs out too but we don't have debt and are already early retired but you really need to get your financial ducks in a row if you are close to retirement so you may need to take a step back and fight the urge to  offer financial support.  You have a mountain of debt to clear (on your own) , I am not sure why your partner is not helping if the debt was spent on things for both of you but that is your choice and hard as it is you can offer emotional support and free childcare to your children but they have a lifetime to sort out their finances but you now have a limited window.  I assume the settee was for your daughter but you are actually prioritising that over debts in your own name. 

 How far off retirement are you?