At the tipping point. now or crsis

JG12

I have managed to wrack up a significant amount of debt having tried to get on the property ladder and renovate my first house to make it livable. Some of the debt was home improvements, some wracked up covering costs e.g. car insurance while I did so. Some is plain, irresponsible overspending. I'm just about making the payments but every month is a struggle, I'm not saving and I'm spending a significant amount of a single salary paying debt  - if I need savings or have extra expenditure I'm in trouble. I am starting my own business to increase my income. I need to renew my mortgage which I will be doing in the coming weeks so I haven't made any credit applications and then the priority is paying off my debts. The interest rates are crippling but my credit affordability is poor so I don't know how to do change these 

Below is my statement of affairs. Any help is welcome. Please no judgement. I know I'm in trouble. 

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

Household Information[/b]

Number of adults in household........... 1

Number of children in household......... 0

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 2694

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

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

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

Total monthly income.................... 2694[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 669

Secured/HP loan repayments.............. 188

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

Management charge (leasehold property).. 84

Council tax............................. 106

Electricity............................. 85

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

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

Water rates............................. 0

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

Mobile phone............................ 74

TV Licence.............................. 13.66

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

Internet Services....................... 26.23

Groceries etc. ......................... 150

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

Petrol/diesel........................... 100

Road tax................................ 15

Car Insurance........................... 38

Car maintenance (including MOT)......... 30

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

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

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

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

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

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

Buildings insurance..................... 10

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

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

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

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

Haircuts................................ 44

Entertainment........................... 23

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

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

Total monthly expenses.................. 1715.89[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 185

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

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

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

Total Assets............................ 185[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 143445...(669)......3.29

Hire Purchase (HP) debt ...... 8593.....(188)......0[b]

Total secured & HP debts...... 152038....-.........-   [/b]

[b]Unsecured Debts[/b]

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

credit card....................7507......220.......24.94

credit card....................4124.01...110.......20.01

credit card....................6989.11...203.7.....20

credit card ...................1317......42.27.....18.43[b]

Total unsecured debts..........19937.12..575.97....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,694

Expenses (including HP & secured debts). 1,715.89

Available for debt repayments........... 978.11

Monthly UNsecured debt repayments....... 575.97[b]

Amount left after debt repayments....... 402.14[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 185

Total HP & Secured debt................. -152,038

Total Unsecured debt.................... -19,937.12[b]

Net Assets.............................. -171,790.12[/b]

MatyMoo

No debt is insurmountable 😉

A few things about your SOA…….

if you are saving for the annual things like car tax, insurances etc have you missed it out of cash? Or have you only just started a budget & realise you need to put it aside?

your Mobile phone is high, are you in contract?

your house value looks wrong, do you mean £185,000?

Do you have £400 left? If not where does it go? Start a spending diary to find out where it is going if you don’t know.

Nothing for clothes? May be you have plenty for now but maybe put a little aside a month for future purchases. Most of us need shoes or undies at some point!

can you reduce haircuts a bit? Maybe stretch it to every 6 weeks if you go monthly etc. 

I also bought my first house on my own, it’s flipping tough, hang in there! I’m now mortgage free but it’s so hard to get there with only one wage. I ended up working in a pub in the early days for the extra money……it was also my social life 😂

enthusiasticsaver

Your soa shows £400 spare so find out where that is going first

You could cut back on haircuts and gifts. Is the HP for a car and can you hand it back and get something cheaper? Once the mobile phone deal is out of contract move to something cheaper. 

I would take the path of increasing income and throwing all spare income at the debt. Get a second job if you can. 

It is not unsurmountable but it will be tough for the next few years.

JG12

enthusiasticsaver said:

Your soa shows £400 spare so find out where that is going first

You could cut back on haircuts and gifts. Is the HP for a car and can you hand it back and get something cheaper? Once the mobile phone deal is out of contract move to something cheaper. 

I would take the path of increasing income and throwing all spare income at the debt. Get a second job if you can. 

It is not unsurmountable but it will be tough for the next few years.

Thanks for you’re reply. Yes - that’s what doesn’t add up so they’ll be a lot more tight budgeting on daily living, food, coffees, hair cuts etc. the extra income is underway but if I could get those interest rates down and pay off more of the debt with my repayments i think it would really help 

JG12

enthusiasticsaver said:

Your soa shows £400 spare so find out where that is going first

You could cut back on haircuts and gifts. Is the HP for a car and can you hand it back and get something cheaper? Once the mobile phone deal is out of contract move to something cheaper. 

I would take the path of increasing income and throwing all spare income at the debt. Get a second job if you can. 

It is not unsurmountable but it will be tough for the next few years.

thanks for you’re reply. Yes - I didn’t have the cash to save for the things you mentioned and it either went on a card or been coming out in one go. Due to my current situation I’ll have to move to paying monthly which is more direct debits, more on my credit file as I won’t be able to put it away as it all needs renewed now. 

House value is 185k, yes

phine is under contract and wasn’t that expensive - EE keep increasing it. Can’t get out at the moment 

yes £188 is the car. Can’t hand it back yet. Not sure I’ll get a cheaper deal (0% interest and very cheep on fuel)

forgot £44 on the gym (my health and my sanity and hard regularly)

I don’t have any clothes - it’s just not been in the budget (a theme I know). My
main issue is budgeting and sticking to it, clearly. Haircuts are on an 8 week basis but I’ll just have to go grey I think. The rest goes on day to day stuff and socialising - because if I don’t then I won’t see anyone. Lots of things to think about. I really need to change my life style (I am concealers re being isolated as a result) and I appreciate your positivity 

my plan 

business in the making for extra income in own time (the stress of a full time job plus this will be fun) 
spending diary to figure out where the extra £400 cash is going
see what other improvements I can make (e.g I think food is an over spend need to find cheaper places / ways). 
reduce the hair cuts and the gifts 
try and put what I can to debt and improve credit etc
try and save a little to avoid extra debt 
when I can try and shift to better interest rate deals 

try not to do this without completely isolating myself 

if anyone has tips on how to stick to budgets / get better rates / save please all welcome 

comeandgo

Your balance sheet is all wrong, you do not have  total debts of £171,790.  Sort out the value of your house, you’ve missed out the 000.

warby68

There's plenty of good news there with your income easily able to afford your essential bills plus some lifestyle once you've dealt with the debt.

Understanding where that £400 goes will probably give you a good idea as to the missing items on your SoA and areas where you can save and boost the debt repayments.

Its tough when you have high interest rates but are not badly off enough on the face of it to go for a DMP. Accelerating your repayments is probably the best plan. A couple of years' of boosting your income and being really disciplined will probably get you back on track. Not much fun but doable nonetheless.

I think you'll need to clear a card or two to start getting offers again.

Is your home now liveable for a few years?