Just need to get on with it!!

warren80

Good evening everyone. 
 I have wanted to post on here for a while so here goes! We ( wife and I) started our debt free adventure about 3 months ago but I like how this site offers support and motivation - something I will need as we are in it for the long haul. 

I will post a proper SOA tomorrow when I am less tired!!

We have struggled with debt for more than 10 years. We built up debts by general poor money management, wedding costs, funding maternity and generally spending without thinking. back then we had a good income and it provided a bit of a smokescreen as the payments were also affordable. My wife lost her job in 2017 and things were very difficult. In hindsight we should have entered into a DMP but we were proud so decided to try and maintain payments. By drastically cutting back, and robbing Peter to pay Paul we stayed aflot and never missed a payment, however we also didnt reduce the debt. Like I said, a DMP would have been wiser but we are where we are! 

Fast forward to 2020 and things have improved for us! I have had quite a big promotion and wife has a good full time job again. This means that our household income has increased from 44k to 85K. We feel very fortunate and lucky. We are now prioritising reducing our debts which in September stood at a stomach churning 65k. This is on top of our mortgage. 

Like I said, I will do the SOA when i less sleepy but here are our figues in summary - 

Joint take home pay - £5053
Fixed bills - mortgage, house bills etc - £1120
Food and fuel - £460
min debt repayments - £1400 ( give or take a few quid)
Kids school clubs/wrap around care - £120


Total outgoings - £3100
'spare' ( I know it's not really spare, but you know what I mean!!) - £1953

I guess what I am looking for is advice on how much of this money we throw at debts, how much we save and how much we allow ourselves? Since September we have overpaid debts, saved £2000 and had a Credit Free Christmas - a first for us. 

I will post SOA tomorrow

Thanks

Karonher

If you can manage it is advisable to have a few months worth of bills put away. That however is likely to depend upon how much interest you are paying on your debt. The £2000 you have may not be the full amount but is a good start. If it were me I would hammer it with virtually every penny going towards paying it down. I know that is not sustainable in the long run so would re-evaluate in maybe April. You could be below £50,000 by then.

RAS

Hi, well done so far, the SOA will help.

Generally, you need to advise whether each debt is a loan, card or account, the APR for each, and the end dates for loans and deals, and what rate they revert to if relevant.

CreditCardJunkie

In my experience, learning to budget (and do without certain things) is the only way out of debt. It's a simple equation of spending less than you earn. Keep a spreadsheet of every single thing you buy for a month, you will be surprised how the little things add up!

warren80

I have done the dreaded SOA. It's not good but it was useful to do as it highlighed that my initial figures were a little out. I have based in on how we have been spending since September as this is when we had out LBM. 
I am doing my best to remain positive and look at this as a challenge rather than a disaster, however I am not in denial regarding the precasiousness of our position. I'd be lying if I said that I hadn't had moments when I have woken in the night and worried about what would happen if our income suddenly dropped, however worry get me nowhere so I need to focus on action! 

The debt is also our dirty little secret as wife is adamant that nobody can know what a mess we're in. I would be happy to be a bit more open as I don't necessarily feel ashamed, however I do respect her wishes for confidentiality. 

I'd welcome any constructive advice or words of encouragement. 

Household Information[/b]

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

Number of children in household......... 2

Number of cars owned.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 3570

Partners monthly income after tax....... 1503

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

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

Total monthly income.................... 5073[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 534

Secured/HP loan repayments.............. 0

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

Management charge (leasehold property).. 0

Council tax............................. 120

Electricity............................. 40

Gas..................................... 82

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

Water rates............................. 40

Telephone (land line)................... 0

Mobile phone............................ 70

TV Licence.............................. 12

Satellite/Cable TV...................... 28

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

Groceries etc. ......................... 300

Clothing................................ 50

Petrol/diesel........................... 160

Road tax................................ 6

Car Insurance........................... 47

Car maintenance (including MOT)......... 50

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

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

Childcare/nursery....................... 120

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

Medical (prescriptions, dentist etc).... 15

Pet insurance/vet bills................. 22

Buildings insurance..................... 12

Contents insurance...................... 10

Life assurance ......................... 40

Other insurance......................... 0

Presents (birthday, christmas etc)...... 50

Haircuts................................ 10

Entertainment........................... 100

Holiday................................. 0

Emergency fund.......................... 0[b]

Total monthly expenses.................. 1918[/b]

[b]

Assets[/b]

Cash.................................... 3000

House value (Gross)..................... 225000

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

Car(s).................................. 6000

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

Total Assets............................ 234000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 62000....(534)......1.79[b]

Total secured & HP debts...... 62000.....-.........-   [/b]

[b]Unsecured Debts[/b]

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

bcard 1........................12500.....257.......6.9

bcard 2........................4720......98........6.9

loan 1.........................10450.....248.......10.9

overdraft......................2000......0.........0

Next...........................750.......45........0

Creation CC 2..................4320......43........0

creation CC 1..................5400......54........0

very...........................2100......113.......50

MBNA 2.........................2400......62........19

tesco CC.......................4650......125.......19.9

halifax loan...................8100......132.......7.9

aqua...........................4700......175.......30.9

MBNA...........................8230......230.......19.9[b]

Total unsecured debts..........70320.....1582......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 5,073

Expenses (including HP & secured debts). 1,918

Available for debt repayments........... 3,155

Monthly UNsecured debt repayments....... 1,582[b]

Amount left after debt repayments....... 1,573[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 234,000

Total HP & Secured debt................. -62,000

Total Unsecured debt.................... -70,320[b]

Net Assets.............................. 101,680[/b]

madaboutspots

Hi Warren... It's not a disaster - you have a really good amount left over after all the bills and minimums on debts. Not having such a good income might be more disastrous.

Well done on putting together the SOA - never easy to face up to debts, whatever their size. 

You will get loads of advice and much of it will differ in details but the one bit of advice that will stay the same is to focus and stay focused. You can do this. Yourself and your wife will need to now keep the lines of communication fully open with full disclosure for you both to reach the end. Conversation without judgement will really help but also talk through when days are tough - temptation is everywhere.

If it were me I'd start with Very & Aqua. A few months of the full £1,573 being thrown at these and they'll be gone. Close both accounts and then either start with the smallest for the feel good factor or with the higher interest rates for maximum reduction in interest.

Your overdraft - is that definitely 0%? I only ask as it's unusual these days. 

I can't see much in your DDs that needs huge reduction except the mobile bill - that seems very high. There are great SIM only deals out there. A new phone can surely wait until all debts are gone and you've saved the cash? 

Keep focused, keep talking and be kind to each other. You can get through this - it's not a disaster.

Jami74

Is your overdraft really at 0%? 
And do you really have about £1500 left at the end of every month? If you have then you could surely be debt free in 4 years and mortgage free within 10. 
If you've got £3000 cash saved, I'd be tempted to pay off Very. If it is 50% interest then out of your £113 a month, less than £30 goes towards reducing the balance. Pay it off. You'll still have £900 and you could add £100 each month to that instead of giving it to Very.
Personally, I'd be tempted to then pay off MBNA 2 over 2 months with your spare £1500, they might send you a money or balance transfer offer.

I guess what I am looking for is advice on how much of this money we throw at debts, how much we save and how much we allow ourselves? Since September we have overpaid debts, saved £2000 and had a Credit Free Christmas - a first for us. 

What do you want to save for? In a perfect world all the things on your SOA, you really put that money away, eg every month you put £50 aside towards Christmas and the same for your MOT and tax/insurance. It is good to have an Emergency Fund, eg a £1000 tucked away somewhere safe in case your car unexpectedly breaks down or your roof needs a repair but it's not cost effective to have loads of money sat in an account not earning interest when you are paying interest on that money elsewhere.
When you say 'how much we allow ourselves', what do you do with money you allow yourselves? It looks like you are already budgeting £100 a month on entertainment on top of your TV subscription. Looking back over the last year, how much do you usually spend on yourselves a month?

NeverendingDMP

The good news is you have a good income and normal outgoings. Yes the debts are high but you have spare money to get them lower. You do owe a few different places which can make it harder to keep track of. As time goes on and you pay some of them off it will feel easier and more streamlined. Yea I also think aqua and very are potential ones to aim for first.
Good luck

warren80

madaboutspots said:

Hi Warren... It's not a disaster - you have a really good amount left over after all the bills and minimums on debts. Not having such a good income might be more disastrous.

Well done on putting together the SOA - never easy to face up to debts, whatever their size. 

You will get loads of advice and much of it will differ in details but the one bit of advice that will stay the same is to focus and stay focused. You can do this. Yourself and your wife will need to now keep the lines of communication fully open with full disclosure for you both to reach the end. Conversation without judgement will really help but also talk through when days are tough - temptation is everywhere.

If it were me I'd start with Very & Aqua. A few months of the full £1,573 being thrown at these and they'll be gone. Close both accounts and then either start with the smallest for the feel good factor or with the higher interest rates for maximum reduction in interest.

Your overdraft - is that definitely 0%? I only ask as it's unusual these days. 

I can't see much in your DDs that needs huge reduction except the mobile bill - that seems very high. There are great SIM only deals out there. A new phone can surely wait until all debts are gone and you've saved the cash? 

Keep focused, keep talking and be kind to each other. You can get through this - it's not a disaster.

Thank you! The mobile bill will reduce in about 4 months when our contracts expire. We will both go to sim only at that point. 

warren80

Jami74 said:

Is your overdraft really at 0%? 
And do you really have about £1500 left at the end of every month? If you have then you could surely be debt free in 4 years and mortgage free within 10. 
If you've got £3000 cash saved, I'd be tempted to pay off Very. If it is 50% interest then out of your £113 a month, less than £30 goes towards reducing the balance. Pay it off. You'll still have £900 and you could add £100 each month to that instead of giving it to Very.
Personally, I'd be tempted to then pay off MBNA 2 over 2 months with your spare £1500, they might send you a money or balance transfer offer.

I guess what I am looking for is advice on how much of this money we throw at debts, how much we save and how much we allow ourselves? Since September we have overpaid debts, saved £2000 and had a Credit Free Christmas - a first for us. 

What do you want to save for? In a perfect world all the things on your SOA, you really put that money away, eg every month you put £50 aside towards Christmas and the same for your MOT and tax/insurance. It is good to have an Emergency Fund, eg a £1000 tucked away somewhere safe in case your car unexpectedly breaks down or your roof needs a repair but it's not cost effective to have loads of money sat in an account not earning interest when you are paying interest on that money elsewhere.
When you say 'how much we allow ourselves', what do you do with money you allow yourselves? It looks like you are already budgeting £100 a month on entertainment on top of your TV subscription. Looking back over the last year, how much do you usually spend on yourselves a month?

Thank you - I wasn't sure what apr is on the overdraft but I will find out!
Yes, we do have the 'spare' money now that we are both earning more. In terms of entertainment, i was thinking about days out, the odd coffee. I have a read thing about still being able to do stuff with the kids, although I know that this needs to be budgeted for and as low cost as possible. 

I didn't mention before but we need some serious work doing on our kitchen and bathroom. Not just for cosmetic reasons but because they ( particularly the kitchen) are faling apart. My father in law is a carpenter and handy man and he has offered to do the work for free as a gift but we still need to find the money for the materials. The kitchen is particularly bad and becoming unserviceable. Our aim is to get units as cheaply as possible so that its workable. The floor and other bits can come later on. The bathroom is also pretty bad - wobbly cracked bath, sink that moves around and generally in a bad state of repair. We feel that we need to do this work as long as it doesn't add to our debt. 

warren80

NeverendingDMP said:

The good news is you have a good income and normal outgoings. Yes the debts are high but you have spare money to get them lower. You do owe a few different places which can make it harder to keep track of. As time goes on and you pay some of them off it will feel easier and more streamlined. Yea I also think aqua and very are potential ones to aim for first.
Good luck

Thank you. I appreciate your kind words and reassurance.