Debt free help

olaf2014

So I'm in debt lots of debt (felt good to say it out loud)
I'm embarrassed to say it and embarrassed to write it all down bit I need help

I can no longer live pay check to pay check worried if the kids need anything for school or dreading letters coming home saying there's a school trip and thinking great where do I get that from. I just can't do it. I need help I can't see away out of this other then paying the min payments each month for the rest of my life.

So Iv tried to do the Martin budget and even with cutting bits out clearly don't have enough at all. So I'm hoping someone can help or see something I don't see. Also when ever I do budget I seen to have some money left over but I never see it. I don't understand where it goes.

Monthly outgoings (5 of us me and husband 3 kids age 10, 4 and 3 months plus a dog)

Husband brings in £1890
Myself £1877 now on may £1175

Food shopping.   £300
Swimming (daughter) £28
Football (son) £12
Road tax £11.81
118 loans £133.28
Bamboo loads £235.59
Car insurance (mine) £21.70 (needs renew this month)
Washer insurance £3.99
Council tax £121
Simply be £20
Vanquis £10 (payment plan)
Ee phone (mine) £50
Ee phone (daughter) £50
Ee phone (husband) £50
Rent £600
Water £43.30
TV licence £13.25
Home insurance £8.98(renew this month)
Gas 34.65
Electric £160
Capital one £100
Next £50 (payment plan)
Hatching £27.23
Freeman's £20
Studio £30
Studio £20
Car insurance £36.23
Dwp £25 
Sky £117
Petrol £100
School £30 (daughter going on residential)
Very £100(if they expect offer)
Salad loan £42.60
Gym £24.94
Black horse £307 (car)

I can't seem to see anything I can cut down on 

My looking at cancelling my ee but I'm in contact till Jan next year can't cancel daughter as she got it for Xmas husband won't get rid of his as he uses it for work

Sky I'm in contact till 7/6/23 so not sure I can do anything 

I want to try and cut some of my debt down but unsure how to do that iv started to do surveys etc which is slow and steady but Im unsure how else to tackle them iv wrote them down in interest order to try and pay them off but feel bit like a fish out of water can anyone offer any help 

AntoMac

Well done for facing up to your debts @olaf2014

That can be really hard but it’s definitely the start of dealing with it, and as you say you already feel better by declaring it.

Are you able to produce a full Statement of Affairs using the template. People would be better able to advise if you can. If you can’t find the MSE template and would like to produce one I’m sure a helpful fellow user can provide a link.

olaf2014

Not to sound daft what's a full statement of affairs?

I wrote out at 6pm and was debating if I should post it or not and thought just do it what's the worst that can happen was hard to post it. But felt I had to I need help as to be honest I'm looking tonight at what bill not to pay so I can buy food for the kids as I'm having to play catch up from missing some bills after the little one was born and us being in and out of hospital.so working it out I'm £300 short.and that doesn't include food.

AntoMac

You’re not daft it’s me! I can’t track down the SOA, which is a tool like a spreadsheet where you can better record all your income and expense plus your assets and liabilities.
I am sure someone will be along soon to provide you with a link.
Try not to worry. Many many people have been in a similar position with debt. It can be solved and there are lots of helpful and knowledgeable people on these boards who can offer great advice and help.

Martico

Here it is: 
https://www.lemonfool.co.uk/financecalculators/soa.php

Fill in, format for MSE, copy and paste here if you're willing to share. If you can add in brackets any interest rates on cards etc, all the better.

People here are used to seeing this kind of statement laid out and will be able to offer advice. Best of luck.

kimwp

You've done a really good job getting those numbers together, with lots of useful notes and this is definitely the right place to get advice on your situation. If you put the numbers into the lemonfool SOA (statement of affairs) as in Martico's post or my signature and format for MSE, that will do some of the maths for you and make it easier to figure out the best thing to do.

EssexHebridean

Yep - having already got your figures together will really help with filling in the SOA, you've given yourself a head start there. 

The first thing to do is to make sure that your priority bills are paid - you need to pay your rent, council tax, energy and water bills, and make sure you have enough for food shopping. I'd also add to that insurances (Car, home, life if you have it) road tax and fuel to cover essential journeys, plus any non-car related commuting costs. Everything else is a secondary consideration. 

You already know I think that £150 a month is a truly ludicrous amount for any household to be spending on three mobile phones - and all the more so when that household is in debt.  Allowing that your and your daughters phones are both well and truly within contract look first at your Husband's one - what is he getting for that £50 per month? when is the contract finished, if he is still in contract? If it helps you for comparison, I'm currently paying EE under £10 a month SIM only for unlimited calls, unlimited texts, and 10gb data. There are cheaper deals out there too - I really need to call EE and haggle a bit! If your husband isn't still paying off a phone then that contract price is ridiculous - so get him to pop in a phone call to them, explain charmingly that he absolutely loves being a customer, but unfortunately it's simply too expensive to stay with them if they can't match a better price he's got from "X" - he needs to find a deal he could live with from another supplier - preferably one who uses the same network he is currently on - I think the main MSE site has a list of which piggyback providers use which networks. If he IS still  in contract, he needs to diarise for a month ahead of the contract ending to call as above. 

Personally, with Sky, I'd do pretty much the same, only this time the approach needs to be that again, you love being a customer, and yes you absolutely understand that you are still in contract, but that you simply no longer have the money to pay for the package you are currently on, and as a loyal customer of theirs (hopefully you have been with them a while?) you really hope there is something they can do to help you...be clear that it's causing you stress and making you anxious. be upfront and honest, and ask for their help. If the initial customer service person can't help then ask to be put through to disconnections anyway - you can always say you want to discuss with them exactly how soon they will let you terminate the service, and they have a lot more clout to offer deals. It may well be that right now they have been given discretion to adjust services rather than risk people simply not paying. 

Have a think about everything you spend - keep a spending diary for a month or so perhaps to focus your mind on spending - because I'm betting there is other discretionary spends that you've not remembered to.
How much do you budget for spending on Christmas and birthday presents, and where do you save those savings until needed?
How much do you budget for car maintenance & depreciation (tyres etc) - and again, where do you save that until needed?
Do you have an emergency fund saved? If not, you need to budget for that, and once it hits a couple of hundred pounds, Drop the WM insurance as while it's not a huge amount, if you pay that amount for 5 years and never claim on it as is perfectly possible with a decent quality modern machine, that's easily the cost of a new washing machine you've spent and got nothing back for. 

Your car finance is a killer - how much longer to ruin on that, and is there a balloon payment at the end before the car becomes yours? If so are you saving to have sufficient to pay that? 

enthusiasticsaver

I have added up all the expenses you have put there and it came to £2937.55 which is more or less your income now as you are presumably on maternity leave? £1095.70 which is almost your salary is going on debt even with what looks like arrangements to pay in place so you are not even managing minimums. We would need to see the full soa but it looks like some sort of DMP or even bankruptcy may have to be an option for you although I would like to think you can sort this out with a DMP on your joint income but it depends on the total amount of debt.  

 Your soa  does not include  gifts, entertainment, car maintenance or other bits and pieces for school uniforms, shoes etc etc.  That is why it is better you fill out the comprehensive soa with not only details of expenditure but also how much is outstanding on loans, cards etc and critically what interest you are paying. It is not surprising you  are struggling as undoubtedly  all the other bits missed on your list of outgoings will add up to quite a few hundred which may have been sustainable when you had the higher income but not now with a £700 per month income reduction. 

Take a look at Martin Lewis programme on debt which was on this week or last and you will see you are not alone.  The link to a proper soa is below:
SOA Calculator (lemonfool.co.uk)



As EH says you need to sort out priority bills and Sky and £150 for mobile phones particularly as your daughter is only 10 is way over the top.  Even we don't spend that much and we don't have debt.  As soon as you are out of contract look at sim only plans to save as much as possible.  Sky could also be reduced or haggled down or got rid of altogether unless it is a TV/Phone and broadband package.  Get rid of the things you can do without.  

Priority bills are rent, council tax, insurances, utilities and food.  If you need the car for work then the costs for that but you have a very expensive car package so see if you can reduce that.  It depends on how you have financed it though. Buying clothes etc from Catalogues is expensive as is Very and Next (I guess Studio is a catalogue?) so stop that immediately.  I would either contact stepchange or contact your lenders directly telling them you need breathing space.  It will involve defaulting but I cannot see you have any option and if you already have arrangements to  pay in place that has already put markers on your file anyway. 

First and foremost you have to stop  putting expenditure on catalogues or cards and taking out what presumably are debt consolidation loans. Save up for emergencies and if the money is  not in your bank account then stop spending. Focus on priority expenditure only and keep a spending diary as a first step and make sure your husband is on board.  I know it is difficult saying no to children but you won't be alone in needing to  cut back in these expensive times so pricey residentials and mobile phones etc need to be saved for rather than put on credit. 

katsu

Can you cancel your husband's phone contact, give him the one you or your daughter have and get a cheaper deal sim only if he is not in contract?

If your daughter is 10 years old then she can't need all the features of an expensive phone, surely? 

I would look at cancelling sky as soon as the date is up, or calling them now to explain how bad your financial situation is and ask if they'll let you give notice early. 

Could you cancel the gym? 

I think you need some kind of debt repayment plan as then you'll be able to make ends meet. 

Good luck to you. 

ladyholly

You may be able to cut your sky package even if you cant cancel it. You wont get all the bells and whistles you get now but it may be more affordable.

Do you have anything you can sell. Even small amounts help as long as you put them towards your debts and dont spend them. I have paid off a 5 year loan 2 years early by selling little stuff (mainly under £10) although I admit I have been lucky in that much of it was stuff that family and friends didnt want and couldnt be bothered to sell themselves.

Remeber any saving need to go to debt repayments not into a general bank account where it may disappear. Good luck with your journey to debt freedom.

savergrant

Hi. If you are managing your repayment schedule and within credit limits look into shifting debt. Keep a very close eye on tech contract end dates and shop around, go sim only as soon as you can and don't upgrade phones unless they stop working. Check how much data you actually need, Unless you have limited signal go for an introductory lyca or lebara deal, then port to the other just before the introductory period ends. Look at batch cooking food and freezing to save gas/elec, buy fruit and veg which is in season. Maybe pad out meat dishes with beans/lentils. Look into low cost recipes and try to avoid any waste.

Best wishes