Facing up and time for action

DasDachs

I've been following some of the stories and progress of other folks on here for a while, so thought it was time to sign up and set out my plans for getting my overspending and my debt under control. In June this year I was carrying £72.1k of unsecured debt across two consolidation loans (!), five credit cards, a store card and an overdraft. Using an annual bonus and cashing some investments has allowed me to reduce that to £58.3k this month, and I have cleared two credit cards, the store card and my overdraft. 

I'm married with two children, my wife works part time but all living expenses and costs of running the family are met by me.  Anything I do here therefore has got to be done within my income. The debt has built up over the last 11 or 12 years, and I have faced up to the fact that this is a severe case of overspending and I was simply moving things onto a new card and then spending again. Part of that is a real failure to plan ahead and a mentality of, "I'll cover it from next month's pay". I'm not proud of it at all, in fact I find it pretty shameful as I think I manage most other aspects of my personal and professional life pretty well. I think I'm now finally engaging with tracking what I actually earn and what I spend, and trying to stop viewing each pay packet as an individual fund; I'm also trying to adhere to Martin's mantras before parting with cash.  

Anyway, I guess that every journey begins with a step, so this is mine. My plan is to first focus on my remaining credit card debt - starting with the smallest debt (£7690) (which is the second highest APR), and then switch to the highest APR one. The loans I'm just going to treat as a fixed commitment until the credit cards are cleared. All three credit cards are being repaid at a fixed payment rather than at minimum repayments, so two are reducing at around £100pm, with the one with the smallest balance now set to reduce at around £200pm.

I have managed to build a contingency fund to help stop dropping into cards and overdraft again, so that will hopefully keep me on the straight and narrow in the event of emergencies - I really don't want to use the cards I've just cleared if I need some funds, although I realise from a interest rate perspective it makes sense to use that money to clear more credit card debt. At the moment it's a security blanket that I think I need.

Anyway, that's me, I've completed an SOA and will post below. I don't know how regularly I'll update on here - I'm guessing monthly is a good bet, so I can show some progress (hopefully) and some accountability if not! 

DasDachs

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

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................ 5245.95

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

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

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

Total monthly income.................... 5245.95[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

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

Rent.................................... 1200

Management charge (leasehold property).. 0

Council tax............................. 136

Electricity............................. 74.12

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

Oil..................................... 44.36

Water rates............................. 31.1

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

Mobile phone............................ 93.23

TV Licence.............................. 13.25

Satellite/Cable TV...................... 89

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

Groceries etc. ......................... 600

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

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

Road tax................................ 2.5

Car Insurance........................... 42.49

Car maintenance (including MOT)......... 29.16

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

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

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

Other child related expenses............ 46.66

Medical (prescriptions, dentist etc).... 8.33

Pet insurance/vet bills................. 0

Buildings insurance..................... 0

Contents insurance...................... 28.03

Life assurance ......................... 37.84

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

Presents (birthday, christmas etc)...... 133.33

Haircuts................................ 27.5

Entertainment........................... 400

Holiday................................. 83.33

Emergency fund.......................... 150[b]

Total monthly expenses.................. 3480.23[/b]

[b]

Assets[/b]

Cash.................................... 2000

House value (Gross)..................... 0

Shares and bonds........................ 2800

Car(s).................................. 5000

Other assets............................ 10000[b]

Total Assets............................ 19800[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

Consolidation loan 1...........8261.9....363.9.....3.4

Consolidation loan 2...........18381.2...191.9.....5.8

Virgin Credit card.............7690.4....201.......19.17

Tesco credit card..............12250.8...326.8.....20

RBS Credit card................11748.1...195.6.....6.68[b]

DasDachs

Afternoon!

I did a bit of tidying up on my current account last night and cancelled a direct debit for Amazon Prime; not a huge amount, but it builds up to £96 for the year. I rarely use Amazon TV, so it's not worth it right now - especially as I am paying for a digital TV package anyway. My electricity tariff is also due for renewal, but when I went through Uswitch, I couldn't get a better tariff than EDF were proposing, so I'll stay put. I also spent a useful 30 minutes unsubscribing to emails alerting me to new stuff to buy. I figure that if I need something I'll go looking for it rather than buying because it's a 'bargain'.

I gave some thought to setting goals following reading other diaries. I know that I want to focus on reducing my credit card debt so had a look at a snowball debt calculator. Having input figures into this, and assessing what I think is realistic and sustainable, my targets starting August 2021 are:

• Reduce overall credit card utilisation to 50% in 12 months (currently 63%) - two cards already cleared, but left open with a £0 balance. 
• Clear Virgin CC by Sep 2023 (current balance £7690)
• Clear RBS CC by Nov 2024 (current balance £11748)
• Clear Tesco CC by Jun 2025 (current balance £12250)

I've excluded the loans from the equation at present, but I will review that as I go along.  If I include them (and assuming that overpayments are okay), then I could be debt free in 48 months, rather than 60 - or so the snowball calc tells me.

It's a start and now that it's in black and white I have upped my direct debit to Virgin so the first higher payment will go out in September. I've also updated my budgeting spreadsheet (now that I have one!).

Rather pleasingly, I've also realised that since doing the weekly shop and filling the car on Saturday I haven't spent anything at all this week. This week is a little bit of anomaly as my Wife is on holiday with my daughter, so it's just me and my son, but even so it's good that I haven't been out and about and spending or even needed to top up any of the groceries I bought.

I have a day off work tomorrow and I'm intending to go for a long walk with the dog - I'm even going to be super-good and take my own coffee rather than buy one whilst I'm out.  I'm also doing the weekly shop tomorrow as I won't have time on Saturday because my son has football training. 

rigare11a

Hi Das, 
Following along for your debt free journey! Good luck and all the best sounds like you have a great plan  
Like you I unsubscribed from all those pesky marketing emails letting me know when they were having sales etc, most of the time it has been thoughtless spending.
Much Love
Rigarella

DasDachs

Thanks Rigarella! It’s amazing how compelling those emails can be some times (or at least in my head…) so it’s felt good to unsubscribe and remove temptation - and declutter the inbox. 

I’m sure things won’t be as straightforward as the plan suggests but it certainly gives me something to work towards and I feel much better for it 

DasDachs

Weekly shop completed today with a total spend of £139.56. Thats’s a little less than I plan for, so I’ve transferred the £10.44 into a separate account to start tracking where I’ve saved some money - and to be able to add back to food spend if required. I think I should start doing the weekly shop more often, as my wife seldom spends less than £150, which always frustrates me as it comes out of my current account and makes it quite difficult to budget effectively.

 I also returned a shirt to Matalan that didn’t fit my son, so that’s £7 back in the account soon. 

No unplanned spending today at all which I’m pleased with. My wife and daughter returned from holiday today and I’m cooking burgers for dinner tonight. 

I have an opticians appointment in the morning - I’m pretty sure I need new glasses as I think my prescription has changed - I’m overdue an eye test anyway, so be interesting to see what happens. My prescription hasn’t changed since I was in my twenties but I’m definitely feeling a little eye-strained nowadays. 

rigare11a

Sounds like a well planned day, food shop is such an expense my boyf moans when I do the shop too  

I needed new glasses recently and got my test cost refunded from my work and then got my glasses from Select Specs who have some really cheap frames. I appreciate they might not be everyone's cup of tea however

Have a great weekend

DasDachs

That’s a great tip on the glasses Rigarella - thanks 😊 I’ll check whether or not I can do something similar with work - I know there’s provision for people struggling with computer related eye-strain, so I’ll see if there’s anything about eye tests. 

If my prescription has changed I’m hoping to just reuse my existing frames - not through any particular desire to save, but they aren’t that old and I quite like them, so it seems a shame to discard them. 

you have a good w/e too 

DasDachs

I had my eye test over the weekend and confirmed today that I can indeed reclaim the cost from my employer - thanks @rigare11a !
I don't have to change my glasses which is good, but I am trying out a different type of contact lens and will see how I get on. If I don't like them, then I will probably need to get new glasses with varifocal lenses, but I'll see how the multifocal contacts play out first. 

I also had a bit of a bargain this weekend. I was looking at what I could do with my Tesco vouchers and noticed that they could be exchanged for 3 x value with Denby. I wanted a new everyday dinner set as we've currently got a mix and match of different sets for everyday use, so I exchanged vouchers and have a new 12 piece dinner set, plus 4 pasta bowls on the way - it's cost me £19.95 incl postage, so I was quite pleased with that. 

The largest expense of the weekend was new football boots for my son - he's gone up a full size since last season, and really needed a new pair, especially with training restarting. We spent a bit of time trying different boots and he settled on a pair that were discounted by £30, so £95 spent. Fingers crossed that he's pretty much at the end of foot growth now and this may be the one of the last times he needs new boots.

Other than that I spent just under £20 on some back to school stationary and pens for the children and some dishwasher tablets and bird food. Had it not been fort the boots it would have been a very inexpensive weekend! 

rigare11a

Glad you will get a reclaim on the cost of the eye test I think the last time I had mine it was nearly £50 so deffo worth claiming back! 
Sounds like you had a bit of a pricey weekend but things you needed etc so suppose that is just the way it goes  

BellaLasagna2018

DasDachs said:

Weekly shop completed today with a total spend of £139.56. Thats’s a little less than I plan for, so I’ve transferred the £10.44 into a separate account to start tracking where I’ve saved some money - and to be able to add back to food spend if required. I think I should start doing the weekly shop more often, as my wife seldom spends less than £150, which always frustrates me as it comes out of my current account and makes it quite difficult to budget effectively.

You don’t have to answer my questions here, but does your wife know about the amount of debt you have? Is she on board with you debt busting efforts? Does she see these debts as solely yours or family debts? 

 You said she works part time but you take care of all the family’s expenses, so what does she spend her money on? 

I’m asking all these questions because I think her attitude will have a big impact on your efforts to get rid of your debts.