The way forward....

Paydaypayitback

Please see below my monthly budget. Any comments or suggestions are welcome 

Household Information

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

Number of children in household........ 1

Number of cars owned.................... 1

Monthly Income 

Monthly income after tax........ £3250

Benefits.......................£84.20 (child benefit)

Total monthly income........£3334

Monthly Expense Details

BILLS

ESSENTIAL 

Rent....................................£325

Electricity & gas............................. £75

Home ins..............................£12

Car ins....................……................£40

Road tax......................................£22

MOT/car servicing........................£50

Internet..................£50 

NON ESSENTIAL BILLS/CONTRACTS

TV license................................£13

Amazon Prime*......................£8

Disney+*...........................£5.99

Mobile phones.............................£140 three smartphones and ipad both in contract

Amazon Music......................................£14.99 

Bills total................... £755.98

DISCRETIONARY

Food...............£400 

Other groceries/household........£50

Petrol & parking..................£120 

Fun / sports club membership..............................£90  

Clothes...................................£30

Christmas/birthdays.........£100 

Pet insurance / pet food..... £60

Total estimated discretionary 7850

Total expenses.................. £1605.98

Credit Card Payments....... £1157

Loan Payments.......... £184

Store Card.......... £175 

Grand Total........£3121.98

Pensions and emergency fund..... remaining balance each month.

MrFrugalFever

Paydaypayitback said:

Please see below my monthly budget. Any comments or suggestions are welcome 

Household Information

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

Number of children in household........ 1

Number of cars owned.................... 1

Monthly Income 

Monthly income after tax........ £3250

Benefits.......................£84.20 (child benefit)

Total monthly income........£3334

Monthly Expense Details

BILLS

ESSENTIAL 

Rent....................................£325

That’s very low!

Electricity & gas............................. £75 is this the best deal? Monitor and write down your usage from 1st -31st March and then use comparison website on 1st April to se if better deal can be had. Also, be conscious about what and when you’re using. You both work full time so you’re not at home for most of the day.

Home ins..............................£12

Car ins....................……................£40

Road tax......................................£22

MOT/car servicing........................£50

Internet..................£50 wow, that’s high. Lots of deals out there for superfast fibre broadband for half this. Watch out for setup and early exit fees though

NON ESSENTIAL BILLS/CONTRACTS

TV license................................£13

Amazon Prime*......................£8 is this really necessary?

Disney+*...........................£5.99

Mobile phones.............................£140 three smartphones and ipad both in contract how long before all paid off? Move across to sim only deals

Amazon Music......................................£14.99 swap to free Spotify account? If you use iPad for Spotify it still has adverts but you can skip as many times as you want, it’s like a half premium subscription for free! Unless I’ve just got lucky with a glitch in my app!!

Bills total................... £755.98

DISCRETIONARY

Food...............£400 that sounds excessive for 3 people, like really excessive. I would expect round £30 pp, per week would be a great benchmark to achieve. Buying bigger packs is cheaper, Aldi is cheapest supermarket in Britain, no shopping at convenience stores, batch cook, packed lunches, your freezer should become your best friend, separate and freeze large packs of meat / bread / milk etc

Other groceries/household........£50 combine with above?

Petrol & parking..................£120 when filling up, is there an opportunity to gain club card points / nectar points? You know what they say....points make prizes

Fun / sports club membership..............................£90  

Clothes...................................£30

Christmas/birthdays.........£100 Other than your for your kid, is this really necessary?

Pet insurance / pet food..... £60 I would actually look to increase this, pet insurance premium goes up yearly in most cases, pets over 8years old yield greater excesses too. Vet fees are extortionate and if you claim, it will remain excluded with other insurance providers for the remainder of your pets life.

Total estimated discretionary 7850

Total expenses.................. £1605.98

Credit Card Payments....... £1157 - what’s the APR’s of these debts?

Loan Payments.......... £184

Store Card.......... £175 

Grand Total........£3121.98

Pensions and emergency fund..... remaining balance each month.

If you are earning 60k combined then after tax and NI and pension it’s still a good income, so £3,334 * 24 = 80,016 take home total. I would say 2 years is going to be tight but you’ll absolutely make a significant dent nonetheless!

Sarahwithlove

I agree with a lot of above. Amazon prime is cheaper if you pay for the year up front. Amazon music isn't that great i find and prefer Spotify myself. Do you get enough use out of it to warrant paying for it or free service OK? You get a lot of music on amazon prime music these days as well. Same with kindle books you can get free books to borrow with prime as well.
Food shopping is a alot. Make sure you are menu planning and shopping from your cupboards and freezer. Bulk buy and bulk cook. See if you can bulk meals out with veg. If it has a sauce then I use less meat and bulk with carrots, Courgette, mushrooms, pepper, onion and Celery. Cut it up small chunks or blend and use thicken sauces. Good way to get extra veg in and fill you up more. 

Agentmomo

Good luck to you on your debt free journey,
The piece of information that is missing here is how you ran up the CC and loan debts? Of course you don't have to tell us on this forum, but something to really think about....(for you, I mean.)
 I only mention as I have been there. It's so easy to rack up £40k of debt whilst earning a decent income, the real LB moment is when you understand why.... For me it was many sod it moments, let's have the holidays on the CC's, spending money etc.... Eventually leading to loans to consolidate and then continuing spending on the CC's.... I was in this spiral for circa 20 years before having my true LB moment.
 Stopping spending on the CC's and having a very real SOA.
Your circumstances may be very different (Loss of job, SMP, necessary home improvements etc, not sure, but you will know...) However with your current circumstances on your SOA and a surplus each month of £1600 before your CC and unsecured loan debts, you are not in a terrible position at all. Have you tried the Lemon fool snowball calculator? My other advice would be to get some money into an emergency fund, as much as you are able to.
Hope this helps....

bamgbost

Well done guys.. on the lightbulb moment and getting this far. I am on the same journey only a couple months ahead of you.

I wish you all the will in the world, in succeding to get debt free. Its not easy but acknoledfing and starting is the hard part, which you are doing.

Paydaypayitback

Good Morning everyone and thankyou to everyone who took the time to comment and make suggestions on my budget. I have tried to answer as many as your questions as possible below -
MrFrugalFever - Our electricity and gas is on the best tariff we can currently get and I do regular checks on the comparison sites to ensure we are getting the best deal. I have no problem swapping as and when required if it saves money  Internet costs are high and I will look at moving to a lower contract as soon as we can move with no fees incurred. Ama*on Prime and Music are little luxuries we do allow ourselves. I am a guitar player and absolutely love all genres of music and my OH also loves her music so we do get our monies worth from it. Food and christmas spending are probably a bit excessive as you suggest and I will look at this area to try and reduce what we spend.
The BIG problem with my debts are the APRs that my credit cards are sitting at with most of them over 22% and some approaching 40%. I need to clear these ASAP.
Sarahwithlove - I love reading and do read a lot of books with the Prime service so we do get our value from this and also as I mentioned above we do use music a lot. Thank you for the suggestion of menu planning. This is something that I want to start doing to reduce our food spending and so we only buy what we need for the planned meals. Also this reduces the food waste and on the environmental front reduces food packaging.
Agentmomo - to answer your question on how I got here and to be quite honest - I was stupid. I started earning good money at a young age and I never thought about the future. I spent like it was going out of fashion and never thought twice about spending huge sums on the whim. The worst I did was buy a BMW 3 series convertible as it looked good in the showroom without even planning to, that was when I was in my mid 20s and a lot less wiser than I am now. Holidays became a regular thing twice a year and my job actually took me to live overseas for a few years too. It was only when my daughter came along that I realised we needed to slow the lifestyle down but by then the debts were there and they have remained with us for the last 7-8 years with us paying bits off and then borrowing again. It has now got to stop. On the positive side I have always looked to the future pension wise and have paid into pensions since the age of 18 (I am 40 now). My last pension pot valuation was 365k at the end of last year so that is one financial thing I have got right I think.
bamgbost - thank you for your kind comments. You mention you are on the same journey, well I wish you all the luck along the way too. I am sure with perseverance and time we will get there
Sorry for the long post everyone but wanted to reply to you all.

MrFrugalFever

You know what paydaypayitback, life happens and we often don’t understand the consequences until our actions force us to face up to them. I for one am glad some progress is being made as far as education on money management is concerned in schools although don’t feel like it’s gone far enough (thanks to ML on here I believe!). I think the temptation to spend is like a drug, then to ‘balance transfer’, meet the minimum payment there and spend all over again is all to easy to do. The thought of missing out on what everyone else was doing, the new car, the holidays the short city breaks etc etc. 

The fact and reality now is you’ve come to terms with an unsustainable way of life and are determined to change that fir the better which is just great. If it wasn’t for the strictness of the IVA in forcing me to live off a set amount each month (no access to credit & when it’s gone it’s gone) and the damage it does to your credit history, I probably wouldn’t think in the mindset that I do today. It’s completely changed my outlook and train of thought about how and what I spend my money on. When I finish my IVA, not that long now, I will effectively have £800 per month ‘spare’. It’s the thought of that which has driven me to continue to get through this and make the best of it.

great news regarding your pension, unfortunately I only really started taking it seriously 3 years ago (I’m 31 now) so lots of catching up to do!

keep us all updated on your progress, it spurs many on. Throughout my IVA I had been forced to find ridiculous ways to save a few £’s so can help further in that respect should you need it.

Paydaypayitback

MrFrugalFever - absolutely agree. I never received any form of money management education when I was young and to be handed a great wage (I was earning 40k a year at 19 years old in 1999) was a recipe for disaster. I think its a great idea that schools should give money management lessons. Bizarrely I was never one for 'keeping up with the jones' and I purely spent as it was a lifestyle I had become accustomed to. Strangely now if I didn't have the debt I am earning enough to fund the lifestyle I got into debt for in the first place.... thats life I guess. I will update regularly and I am finding all the support is giving me the enthusiasm and is spurring me on.

alt80

Something I notice with my employed staff always measure their income as gross which is no where near the net figure. Almost wonder if you mentally think you have £60k/a available when it’s actually £40k/a. Def know a few of my staff fell into that trap. Personally I measure my net income not interested in gross personal income it’s irrelevant (ltd co director so it is different tbf) - not necessarily helped me with overspending (historically been a massive issue for me but not for the reason of not quite marrying up my gross income is not my net income). Just a thought possibly called this very wrong. 

Couple of things I noticed -
Rent very low, is it realistic it’s going to stay this low long term? Also do you not have council tax to pay?
Mobile phone/ internet - obscenely high! 😆

Paydaypayitback

alt80 - yes the joys of income tax. Could cry most months when I see the amounts deducted. With regards to my rent it is very low as my employer pays 50% of it along with my council tax (it was part of the contract I negotiated when I started with them). I only have another 2 years of my contract left hence why I have to move quickly and get this debt cleared. Mobile phone and Internet contracts WILL reduce when I can renew contracts on them.