Debt Advice - Fresh Start

enthusiasticsaver

Your gas and electric bills are huge.  We pay just over £200 for a 4 bed detached for both combined.  You might be able to get the groceries lower too.  However there is lots you are not accounting for and you have no emergency savings so on balance a DMP may work.  Yes your credit file will be shot but realistically I am not sure how you would buy a house at the moment without a deposit or savings to cover costs so I recommend you put that on the back burner and focus on sorting out your current position. You either need to cut back even further than you are or go on to a DMP so the interest is frozen and your repayments actually go towards reducing the debt rather than interest. Make sure you are claiming everything you are entitled to including CMS from your ex. 

elkiedee

Both your gas and electricity bills seem very high to me if that's what you're actually paying (£350 a month, £200 gas, £150 electricity). Prices are meant to have come down in April this year, and are apparently due to reduce in July. Are you on prepay or monthly direct debit? Are your bills based on real meter readings or estimates? What type of property are you in. Which fuels do you use for heating and cooking? You can log in to gas and electricity providers' websites and check your billing and meter readings online, and if you're being billed on estimates at least do your own meter readings and check how they compare. If you are in credit you can claim it back and ask for your bills to be reduced to cover your current usage. But then you need to redirect that money to paying down your debts. You need to anticipate that you will probably have to increase what you pay again in autumn/winter a bit, but don't overpay months in advance while paying interest on other debts.

I've managed to claim back over £600 in overpayments and reduce the gas & electricity bills from £236 to about £127 a month for now - I might have to pay a bit more in autumn/winter but no need to pay my winter bills now. If I was still trying to drive down my credit card debts - I got some very generous help from family earlier this year - I could have paid off over £1000 from this by the end of September before taking into account a reduction in interest and so more of my credit card payments going into reducing the debt. 

Loui22

I'm on a prepayment meter, have just been given an air fryer so hoping this is save on the gas along with summer coming we wont be using it as much. The gas has seemed to be extortionate, i have had a small leak fixed on the cooker so i'm hoping over the next few weeks i will see an improvement in it and hopefully this was the issue. 

I have been asked to go onto smart meters which i would like to but my landlord wont agree to this. Unsure why, but feel this would help a lot. And if i am to go onto the smart meters EON advised they would credit my bills by £50 which would be a nice help. I may have to be a bit more insistent on the benefit of changing unless anybody knows any reason not to change to them? 

As for insurances for the house etc, i don't pay these? I'm renting so I'm presuming its covered by the landlord? If not then maybe i need to look at this. (I'm new to all of this so not entirely sure what i should be doing with things like that) 

I don't get CM at the moment this is going through the courts. 

I may be able to ask for a pay rise in my next annual review but can't increase any hours due to the children. 

The plan with the mortgage is to use money from my previous house but again, this is something that is going through the courts and there is currently no time scale on this nor any idea what I will come away with from it after court fees too and there is still a mortgage to pay on the other house. I feel it may be anywhere between 20k-50k (50k is probably wishful thinking and at the real high end of things considering fees etc) its just the unknown at the  moment. Another thing im not really clued up about and leaving it in the hands of the solicitors to sort. 

The internet cost is included in the cost of the landline and haircuts their father pays for as they all go at together and i havent had my hair cut or done in 4 years I just trim bits myself. Clothes i could re-evaluate, i haven't bought anything since christmas but know that i have to buy uniforms soon and also probably some summer clothes so will factor this in. 

I'm sorry like i say, i feel like a fish out of water trying to learn how to do all of this and understand things, its all very new and a bit of a learning curve. 

RAS

If you know you have to buy uniform for September, work out how much it will cost, divide by three and put that money aside now. You can't afford not to do so. Preferably in an easy access savings account. Then if you see suitable stuff at a decent price at the end of July, you've got some money set aside.

Summer clothes, check the charity shops and if necessary places like Primark for basic Tshirts. But do clothes audits for each of you first. And remember that if junior is growing out of a Tshirt now, it's probably still going to be useful as a figure hugging base layer in winter. You need to trap the warmth next to the body. With your utility bills heating the human is a very good idea.

Loui22

Someone is coming to collect a cabinet and table ive sold this evening - do i pay the £100 off the Studio and pay it completely off to clear it or do i pay £100 off the M&S credit card please? 

RAS

The APR on the M&S account looks horrendous, so anything you've got going needs to go against that account. It'll start to pull your monthly payments down, which paying off Studio wouldn't affect.

kimwp

Loui22 said:

I'm sorry like i say, i feel like a fish out of water trying to learn how to do all of this and understand things, its all very new and a bit of a learning curve. 

You've come to the right place, this forum is an amazing resource. In the last couple of days, I have had advice on pensions and induction cookers and I'm going to be asking about bathroom layouts. 

Potentially good areas of the forum for you in addition to this board are the families boards for help with your divorce, old style money saving for helping to cut costs and the mortgage board.

Just tackle a few things at a time and we'll help you figure them out.

In terms of your other points- a smart meter won't reduce the amount you are spending (though the £50 would be useful). Reducing your energy bill should be high priority, so I suggest that is one thing you note to learn everything about - what everything on the bill means, what payment options there are, how a smart meter would benefit you.

Regarding house insurance, your landlord should pay buildings insurance, but it's advisable to get insurance for your belongings - if there is a fire, for example, you would need to find the money to replace everything if you don't have insurance. Take a look at the main mse site at insurance.

Even if you get a deposit from the old house sale, it doesn't look like you will be able to afford the mortgage repayments. What does that £700 consist of? Does it include other benefits or just housing benefit?

Loui22

kimwp said:

Loui22 said:

I'm sorry like i say, i feel like a fish out of water trying to learn how to do all of this and understand things, its all very new and a bit of a learning curve. 

You've come to the right place, this forum is an amazing resource. In the last couple of days, I have had advice on pensions and induction cookers and I'm going to be asking about bathroom layouts. 

Potentially good areas of the forum for you in addition to this board are the families boards for help with your divorce, old style money saving for helping to cut costs and the mortgage board.

Just tackle a few things at a time and we'll help you figure them out.

In terms of your other points- a smart meter won't reduce the amount you are spending (though the £50 would be useful). Reducing your energy bill should be high priority, so I suggest that is one thing you note to learn everything about - what everything on the bill means, what payment options there are, how a smart meter would benefit you.

Regarding house insurance, your landlord should pay buildings insurance, but it's advisable to get insurance for your belongings - if there is a fire, for example, you would need to find the money to replace everything if you don't have insurance. Take a look at the main mse site at insurance.

Even if you get a deposit from the old house sale, it doesn't look like you will be able to afford the mortgage repayments. What does that £700 consist of? Does it include other benefits or just housing benefit?

Thank you so much, this is very helpful. 

The 700 is just to pay my rent. 

My aim (hopefully) in the long term is to get my debts paid off which will free up nearly £700 a month just on those. 
The gas and electric could come down which would free up more of course. 
Then with the prospect of just managing money better, getting a pay rise maybe etc...just being more careful and aware of where my money is going and eventually being able to save some money. A mortgage probably wouldn't be something i could do in the near future but it is a long term goal and something i would like to aim towards once these are cleared. 

Just need to tackle the rest first i think and get myself straight.

I just have to let the courts sort things regarding CM and the old house.  

I think its all just new and getting an understanding of everything as I have gone 13 years with having no knowledge of finances/money from being a teenager due to my ex (who was older and already had a house at the time before we got one together) being the one who looked after all finances and i just paid my part. I wish i had been able to be involved more as it would have helped me have a better understanding now. But i'm still young and its not the end of the world to start learning now (i keep telling myself) I'm determined to make it all work and make things better for my children and will get there in the end. Just baby steps.  

Andyjflet

The beauty of learning now is that you will be passing your actions and the knowledge you learn onto your children thus breaking the cycle of living in debt. 
I get the impression that you are probably unaware how much heating etc actually costs, my ex used to just put it on random times of the day "too take the chill off" but actually we were spending a fortune. I live alone now and have my heating on for 30 minutes in the morning in the winter and an hour at night. I fitted a TADO system so I can control it when away and bought lots of throws. I cant stand being in warm houses now when visiting, I get way too hot.