Lifestarts has a 5 Year Plan!

Lifestartsat40

Hello Everyone! 
I'm a long time lurker on these boards - I've probably been hanging around here for about 15 years & had a couple of different usernames over the years. 
OH and I have a fair amount of debt between us however it is debt that has been taken on knowingly (if that makes any sense) with a plan to pay it off. 
We have wanted to make a large purchase for some time and the original plan was to save for this but it would have taken some time. A close family member recently being diagnosed with a terminal illness kind of bought it home that life is indeed short and you never know when your time is up, so (whether you agree with our decision or not) we decided to bite the bullet and buy now - This was funded with some savings, a large bank loan over 7 years and cash advances on 2 x credit cards which are at 0% 
We also have another large bank loan which were for home improvements and as the interest rate on this is quite high as soon as we are able we hope to move this onto our mortgage which we have just fixed at a super low rate for 5 years
We also have a further loan for our car (just over 4 years left to pay) - a BNPL for a TV - and a BNPL for some Garden Furniture. 
We both work - have fairly decent wages and our LTV on our house is at about 45-50% - We have £1000 Emergency Fund as well as some other savings which I keep in pots for annual costs such as car insurance and the like. 
I have a spreadsheet for everything so I will post the totals shortly 

Thank you for reading!

Lifestartsat40

Figures as they stand 

Loan 1 - Starting Balance £18000  now £17571.00 (13.8%) - Monthly repayment £324

Loan 2 - Starting Balance £20000  now £19694.00 (11.9%) - Monthly repayment-  £279

Car Loan - Starting Balance £13000 now £8202.00 (3.1%) - Month Repayment - £173

Barclaycard - Starting Balance £3572 - now £3480.00 (0%)  - Monthly Repayment - £100

MBNA - Starting Balance £3862 - Now £3765.00 (0%) - Monthly Repayment - £100

BNPL (TV) - £466.00 (due 28/2/22) 

BNPL (Furniture) - £390.00 (Due 07/07/22)

TOTAL - £53,568.00

When I got all my figures together on 20th October - I set myself a target to make an extra £1000 before Christmas - I have already made £353.00 in just 10 days! This is from a combination of Ebay and FB Marketplace Sales, Survey Earnings and my own little business. I have yet to decide how to distribute this extra - Will probably split between debts and put some towards Xmas as I have a lot of people to but for - Ive made a good start but it would be easy to go over budget

Lifestartsat40

Statement of Affairs and Personal Balance Sheet

Household Information

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

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

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

Monthly Income Details

Monthly income after tax................ 1119.94 (I also earn a variable s/e income which I haven't counted at all)

Partners monthly income after tax....... 2163 (also occasionally gets small bonus which I haven't included)

Benefits................................ 84.6

Other income............................ 0

Total monthly income.................... 3367.54

Monthly Expense Details

Mortgage................................ 600.4

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

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

Management charge (leasehold property).. 0

Council tax............................. 145

Electricity............................. 79 (Pay £158 to Bulb - just gone up so split between gas/elec)

Gas..................................... 79

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

Water rates............................. 30

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

Mobile phone............................ 62 (about to come to end of my contract so will swap to SIM Only)

TV Licence.............................. 13.39

Satellite/Cable TV...................... 52

Internet Services....................... 28

Groceries etc. ......................... 250

Clothing................................ 0

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

Road tax................................ 0

Car Insurance........................... 0

Car maintenance (including MOT)......... 60 (I save this every month which covers ins/tax and MOT over the year)

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

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

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

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

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 10.86

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

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

Life assurance ......................... 23.24

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

Presents (birthday, christmas etc)...... 60

Haircuts................................ 26

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

Holiday................................. 100

Emergency fund.......................... 0

Total monthly expenses.................. 1778.89

Assets

Cash.................................... 1400

House value (Gross)..................... 300000

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

Car(s).................................. 10000

Other assets............................ 0

Total Assets............................ 311400

Secured & HP Debts

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

Mortgage...................... 143000...(600.4)

Total secured & HP debts...... 143000....-.........

[b]Unsecured Debts

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

Boat Loan .....................17571.....327.......13.8

Home Improvement Loan..........19694.....279.......11.9

Car Laon ......................8202......173.......3.1

BNPL 2.........................390.......0.........0

BNPL...........................466.......0.........0

MBNA...........................3765......100.......0

barclaycard....................3480......100.......0[b]

Total unsecured debts..........53568.....979.......-  [/b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,367.54

Expenses (including HP & secured debts). 1,778.89

Available for debt repayments........... 1,588.65

Monthly UNsecured debt repayments....... 979

Amount left after debt repayments....... 609.65

Personal Balance Sheet Summary

Total assets (things you own)........... 311,400

Total HP & Secured debt................. -143,000

Total Unsecured debt.................... -53,568

Net Assets.............................. 114,832

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

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

Doris17

Good luck on you journey.

TheAble

Expenses-wise it's not a bad SOA (I'll pass over the satellite TV for now..) but the debts are problematic. In simple terms you don't borrow money at 14% to buy a boat.

The whole "life is short" thing is a fallacy. It may be short, depending on your point of view, but you're not going to improve that remaining time by borrowing large amounts of money to buy consumer goods. It's just going to cause you a load of stress, hence I guess why you're posting here. Possibly with the exception of dire need it's far better to wait, save up and buy when you can really afford.

You have a good income at least so should be able to pay back after a slog but maybe let the experience be a life lesson!

Lifestartsat40

TheAble said:

Expenses-wise it's not a bad SOA (I'll pass over the satellite TV for now..) but the debts are problematic. In simple terms you don't borrow money at 14% to buy a boat.

The whole "life is short" thing is a fallacy. It may be short, depending on your point of view, but you're not going to improve that remaining time by borrowing large amounts of money to buy consumer goods. It's just going to cause you a load of stress, hence I guess why you're posting here. Possibly with the exception of dire need it's far better to wait, save up and buy when you can really afford.

You have a good income at least so should be able to pay back after a slog but maybe let the experience be a life lesson!

Thanks for your reply TheAble - Completely agree about the Sky TV - We are in contract until March and then it will be getting axed as we really don't watch a great deal apart from the regular channels anyway. 
I guess the reason that I'm posting here is not really because the debts are problematic but as a way of keeping myself accountable. The debts won't be added to, so it could be quite easy to tick along and just pay the monthly payments until they are gone but I would certainly hope that I can repay the boat loan well before the 7 year term as like you say 14% is not great. 

OH has 2 pay rises due at work which total over 5K when he has completed 2 qualifications, the first of which he is booked on to do at the end of November and will raise his salary by an initial £2k - I will be due both a salary increase and an incremental increase in April so if we can direct this extra towards the debts then we can make some headway.

I guess the question of whether buying consumer goods can provide happiness is one we could debate all day long, but I know already that our quality of life has improved, we have joined a club as a result of having the boat and it is lovely to feel part of such a lovely group - we have met some lovely people whom we would not have met otherwise and we have already have had some lovely trips/experiences. 

Lifestartsat40

Doris17 said:

Good luck on you journey.

Thank you Doris17

Lifestartsat40

So I am a little torn whether to follow Ramseys advice and target the smallest CC first or whether to throw overpayment money towards the most expense loan first. 
It would make more sense to overpay the loan but if the smaller CC was gone that would also free up £100 per month to snowball onto the loan as well as any regular overpayment I could make. 
decisions, decisions 

Doris17

Lifestartsat40 said:

So I am a little torn whether to follow Ramseys advice and target the smallest CC first or whether to throw overpayment money towards the most expense loan first. 
It would make more sense to overpay the loan but if the smaller CC was gone that would also free up £100 per month to snowball onto the loan as well as any regular overpayment I could make. 
decisions, decisions 

I left my loan alone and concentrated on my CC and overdraft.

capuchin

Lifestartsat40 said:

So I am a little torn whether to follow Ramseys advice and target the smallest CC first or whether to throw overpayment money towards the most expense loan first. 
It would make more sense to overpay the loan but if the smaller CC was gone that would also free up £100 per month to snowball onto the loan as well as any regular overpayment I could make. 
decisions, decisions 

Snowballing by paying off the smallest isn't worth it [assuming you have no early repayment fees on the boat loan] 

Rough math:

To put that boat loan into perspective: You are paying roughly £200 a month interest on it each month. For every £100 you repay of the capital, you'll pay around £1.15 a month less interest. Assuming £600/month extra, each month you delay is costing you £6.90~

So the opportunity cost to spend 6 months paying off a 0% debt first is around £41.40/month. Your extra £100 snowball would need to work for several years to make up for that.

Lifestartsat40

Thanks Capuchin 
Yes it makes more financial sense to repay the loan first I know although of each monthly payment of £327 only £112 is interest according to my calculations. Each month I change my spreadsheet to reduce the loan by £215 and any overpayments I will just take off the balance too and then get a settlement figure at 6 monthly intervals to see what impact it has had on any interest. There are no early repayment charges and I can make overpayments at any time