On the road to becoming debt free

MrBowler

Afternoon All,

Just thought i should create a post about my journey to becoming debt free, hopefully it will end up helping people do the exact same thing.

Also some people may be able to help me get there a lot quicker.

So the start of 2021 i had a £17,521.70 of debt, then an additional debt of £10,000 to parents and an additional £12,500 on a car that was just drinking fuel a total of £40,021.70.

This is how i started
Argos Card - £853.51
HSBC Loan - £11,787.84
HSBC Overdraft - £2,377.83
Halifax Overdraft - £837.85
Nationwide Overdraft - £1,014.67
Paypal Card - £650

Total £17,521.70
I also owed parent £10,000
Also a car payment due on PCP of £12,500 (approx)

Every Month i was paying nearly £600 to clear the debts, the overdrafts were just getting credited to cover the charges.
Argos Card/Paypal Card and Loan were getting paid monthly 

In April we had a bit of a crisis and decided to do our bedroom out as it was in a mess (cost around £200 for wallpaper/paint and carpets) we then got a new bed.
we decided as we could get an interest free payment on a new bed to do this which came to a total of £1,400 this increased the debt to £18,393.53. 
Within the increasement of that month i was asked to go back into work instead of working from home which i couldnt afford the fuel for so i got given my dads car which i would pay at a later date for £350, as well as a problem with one of our dogs having to be put down so another £450 on vet bills there which was lent from girlfriends parents.

I also decided to treat myself and fell back into my old ways and bought a season ticket for £330 in May which i pay monthly.

In July i decided to ditch the car which i was paying on PCP and got a more economical car at £11,500 on finance which i would actually own.

Fast forward to today and we are now at the following

Argos Card - £853.51 - £0
HSBC Loan - £11,787.84 - £9,393.48
HSBC Overdraft - £2,377.83 - £2,539.58
Halifax Overdraft - £837.85 - £851.60
Nationwide Overdraft - £1,014.67 - £987.93
Paypal Card - £650 - £320
Additional
Bed - £1,400 - £537.80
My Parents - £350 - £350
GF Parents - £450 - 0
Season Ticket - £330 - £152.50

I have 2 jobs, one involves driving 5 days a week delivering earning around £250-£300 per week which approx £40 is fuel and the rest is used for weekly shopping, before i was spending around £100 per week on fuel so saving a lot there.

My main job working 40 hours per week 5 days a week brings in £30k per year and pays for the monthly bills, i aiming to have paid everything off including my parents by the end of 2022.

Any extra ideas to help speed up this process would be much appreciated.

Last note, my other half does not work and can not work due to ill health, the government wont allow us to claim any sickness or care allowance due to my monthly wage so i am supporting us both and our son (who is still a toddler).

If you put your mind to it you can do it, dont let anyone tell you otherwise.

mcpitman

Stuck a full SOA up (Statement of affairs, you can search for the link on this site).

It will help us, look through and see what you can trim.

First thought, what is the interest rate on the overdrafts, could you shift this via a money transfer deal @ 0%?

MrBowler

here you go, think i have filled it in right.

the overdrafts are as follows

Nationwide (no charge)
Halifax around £1 per day (depending on how much i am overdrawn)
HSBC is around £2 per day (£69 per month)

Here is SOA

[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......... 1

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

Monthly Income Details[/b]

Monthly income after tax................ 2836

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

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

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

Total monthly income.................... 2836[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 314.3

Secured/HP loan repayments.............. 507.7

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

Management charge (leasehold property).. 0

Council tax............................. 146

Electricity............................. 43.5

Gas..................................... 43.5

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

Water rates............................. 37

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

Mobile phone............................ 18

TV Licence.............................. 13.37

Satellite/Cable TV...................... 0

Internet Services....................... 30

Groceries etc. ......................... 500

Clothing................................ 200

Petrol/diesel........................... 300

Road tax................................ 14.49

Car Insurance........................... 98.13

Car maintenance (including MOT)......... 40

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

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

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

Other child related expenses............ 200

Medical (prescriptions, dentist etc).... 10.59

Pet insurance/vet bills................. 10

Buildings insurance..................... 13.13

Contents insurance...................... 0

Life assurance ......................... 0

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

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

Haircuts................................ 0

Entertainment........................... 0

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

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

Total monthly expenses.................. 2589.71[/b]

[b]

Assets[/b]

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

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

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

Car(s).................................. 0

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

Total Assets............................ 0[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 88000....(314.3)....1.25

Secured Debt.................. 9127.44..(266)......16.9

Hire Purchase (HP) debt ...... 12000....(241.7)....6[b]

Total secured & HP debts...... 109127.4.-.........-   [/b]

[b]Unsecured Debts[/b]

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

Halifax Overdraft..............1000......30........0

Nationwide Overdraft...........1000......50........0

HSBC Overdraft.................2500......0.........0

Season Ticket..................152.5.....31.5......0

Bed............................537.8.....107.5.....0

Paypal.........................450.......20........0

Parents........................10000.....0.........0[b]

Total unsecured debts..........15640.3...239.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,836

Expenses (including HP & secured debts). 2,589.71

Available for debt repayments........... 246.29

Monthly UNsecured debt repayments....... 239[b]

Amount left after debt repayments....... 7.29[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 0

Total HP & Secured debt................. -109,127.44

Total Unsecured debt.................... -15,640.3[b]

Net Assets.............................. -124,767.74[/b]

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

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

MrBowler

Dont know why it wont do all the bold/italic stuff

mumtoomany

First thoughts. Is/can your partner work? No child benefit? These added in could be used to part down the debt quicker. Groceries look high for three, have a look at the grocery thread on old style, lots of ideas and recipes. No emergency fund, you need this, then you don't need to rely on plastic if, say, the washer breaks. No contents insurance! Look around whichever room you are standing in right now, assuming you are at home, how much would it cost to replace recovery item you can see around you? Multiply that by the number of rooms in your house, then imagine the worst happening, a fire/gas explosion/plane landing on your roof, you need contents insurance.
I would try to clear the overdrafts first, usually the highest interest and can be withdrawn at any time.
I'm sure other more knowledgeable people than me will be along soon, good luck, mumtoomany.

enthusiasticsaver

Groceries is way too high for 2 people and a toddler and clothing can be reduced so you are only buying for the toddler.  There is nothing in emergency savings so that needs to be a priority.  The overdrafts should be repaid asap 

LetsDoThis1983

The things that jump out at me are food shopping and clothes. I feed two adults and a toddler for £200 a month. We eat well, lots of fruit and veg, meat etc so even if you budgeted £300, you'd still have plenty.

£200 on clothes is a lot too. I probably would spend that amount on my toddler over the year. I rarely buy myself anything unless its needed. 

mark55man

good luck with your journey

Not quite the main point you need help on, but if you are working and earning enough NI credits for yourself (and you income suggests you are), then you should get your partner to receive the child benefit, that will earn NI Pension credits for them until your kid is 12 (you can change if circumstances change).  You need at least 10 years to get any sort of pension. so that could be enough and you buy a few extra years nearer the time to get you over the line.  10 years would be about £50 a week when you are 67 so a long time away but make the most of what you got now.  

You should post a thread on the benefits board (very helpful and not judgey) asking about what benefits your partner might be entitled to, and how to claim for them.  Especially if too ill to work. 

MrBowler

My other half cant work no. Unfortunately due to the illness she has she can't work.

We have tried claiming PIP and been declined even though all health records were sent and several interviews on the phone have been made. We are currently trying to dispute this but getting nowhere. 

Yes the food is a big one and we are cutting back slowly, I think it may be a little too excessive what I have put on there.

We do receive child benefit yes, I didn't put in as it goes straight to the other half. 

Clothes are usually only for the child unless we do run out of clothes due to them ripping for example, it is mainly the child's uniform and the rate he is growing. Maybe not quite £200 but it is a lot.

I don't have an emergency fund as I am throwing every penny on to debts, this is something I want to do.

TheAble

It does seem like your car is a bit of a problem. Worth considering trading it in for something more economical?

enthusiasticsaver

If your son is a toddler why do you buy a uniform?  Are you buying clothes from supermarket for him which is cheaper than some of the high street shops? What is the £200 child related expenses for? The car insurance is really expensive too.  Do you shop around for that?