Divorce debt be gone!

biggerpickle

Newly divorced but with big debts to clear here - moving and divorce legal fees, furnishing and essential repairs on the new place for me and my 2 teenmonsters who live with me 50/50.

I managed to secure a 0% 15 month purchases card a few months ago when I moved to pay for furniture and have just secured a 0% balance transfer card for 13 months which I've just moved legal and assorted other debt on to (balances £4,239 and £5,900 respectively) and I have £1,300 on IFC klarna for one of the repair items. I also have some incidental obligations in the next couple of months to clear (final balance on a holiday at October half term, service charges and school trip share). All in all, £12,150. This is the most debt I've ever been in. Since moving I've not had a single month where I've not had to raid savings (cash settlement in leiu of pension on divorce) but I am determined from July's payday this will not be the case as I have naff all pension savings.

Other debt issue is a mortgage running until I am over 70 so that's the next stage of the debt challenge. My 2 year deal is at last years hideous interest rates, am hoping that I can attack this with a shorter term deal for the same monthly payments when this deal runs out.

The good news is on paper this is all doable - my income including child benefit is £2,900, bills are £1,271 - not including food, travel, social life, holidays, health care, clothing etc but I've done a 3 year analysis (love a good spreadsheet!) and it would seem I have around £500 pm I can comfortably chuck at debt and top up savings by £350 a month to enable me to build a pot for holidays, annual insurance, 6 monthly service charge bills and stuff like that. The Klarna deal runs for 23 more months and I reckon I can clear the rest more or less in the same period, fingers crossed and all that. This is my accountability diary!

Thank you for taking time to read!

Blackcats

Welcome to diary land.
everyone is very helpful, supportive and friendly.
lots of good suggestions and tips from fabulous money saving folk.
my best advice is to read and learn from other diaries and to keep posting on your own diary.  Even if it doesn't always seem
 like you are making progress it's good to look back at your journey and realise how far you have come.

Green_hopeful

Not quite the same but when I got divorced I had to borrow quite a lot from a family member to buy my house. I rented out a room. You can earn up to £7500 tax free from renting out a room in your house and it costs practically nothing. A bit of council tax and extra bills. It might be worth asking your children to share a room with each other or you if you don’t have a spare room. It really made a difference to me. 

beanielou

Happy shiny new diary.

biggerpickle

Good idea in theory Green_hopeful but living in London means the new home is a 2 bed flat and they already share. That and the monsters adjusting to the new set up and I work from home as so many folks do these days so having someone else here would be a nightmare!

Am pleased you sound like you're out of woods financially though from renting a room. 

biggerpickle

Thoughts while waiting for the kettle to boil this morning - we're away for 14 days of the summer holidays so only minimal electric spend, the teenmonsters are at their Dad's for best part of 3 weeks so minimal food spend here too.

August could be a good month to rebalance the books. Yes, there will be holiday spends but hoping to keep that to €450 for one trip (staying with family so only travel from airport, groceries,  ice creams and a thank you lunch out, I would say flights are paid for but they're probably hiding in one of those credit card balances) and £200 for the other (camping, the site is paid for but need petrol, food, probably a lunch out and a couple of activities at the outdoor centre). 

ShakeItOff

Hey BiggerPickle! 

Thanks for stopping by my diary! Wishing you a shiny lovely new diary. You've been through a lot to get here, and it's quite exciting to be here starting a new chapter/closing an old one. You've got this! And awesome for an even better August! 

biggerpickle

So thought I'd post my SOA after analysing the last 3 years of stuff to help the focus:

[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......... 2

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

Monthly Income Details[/b]

Monthly income after tax................ 2754

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

Benefits................................ 184.38

Other income............................ 220[b] this is interest on divorce settlement that is really part of pension savings

Total monthly income.................... 3158.38[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 756

Management charge (leasehold property).. 147.17

Council tax............................. 122

Electricity............................. 130 

Water rates............................. 16.99

Mobile phone............................ 8.90 (30gb, in contract for another ~ 12 months)

TV Licence.............................. 13.25

Internet Services....................... 31.55 (contract for another 15 months, the first 6 months of the 24 were half this)

Groceries etc. ......................... 285 (am surprised this is this high as 90% of it is Lidl, must try and cut this back!)

Clothing................................ 75 (includes school uniforms and shoes)

Petrol/diesel........................... 50

Road tax................................ 13.12

Car Insurance........................... 36

Car maintenance (including MOT)......... 42

Other travel............................ 175 (commute into London, local buses and kids zipcard top ups)

Other child related expenses............ 40 (pocket money)

Medical (prescriptions, dentist etc).... 10

Buildings insurance..................... 0 - inc in service charge

Contents insurance...................... 12.39

Life assurance ......................... 34.7

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

Haircuts................................ 20

Entertainment........................... 135 (I know....my sanity....)

Holiday................................. 185 (family overseas, camping and school hols days out)

Emergency fund.......................... 50

Mortgage overpayment.................... 50 (need to reduce term)

Work / kids lunches..................... 95 (if I don't get me a meal deal, I never go for lunch time walks, kids is treats)

Charity donations....................... 20 (non-negotiable)

Misc inc spotify ....................... 50 (also includes union fees) 

Professional Subs....................... 25 (need this for work and is offset in tax code[b]

Total monthly expenses.................. 2689.07[/b]

[b]

Assets[/b]

Cash / Pension.............................. 105000

House value (Gross)..................... 339000

Car(s).................................. 6500

Total Assets............................ 450500[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 118000...(756)......0[b]

Total secured & HP debts...... 118000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Halifax........................235.......125.......26.19

M&S............................4239......106.......0

Natwest........................5900......147.5.....0

Klarna.........................1307.55...56.85.....0[b]

Total unsecured debts..........11681.55..435.35....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,158.38

Expenses (including HP & secured debts). 2,689.07

Available for debt repayments........... 469.31

Monthly UNsecured debt repayments....... 435.35[b]

Amount left after debt repayments....... 33.96[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 450,500

Total HP & Secured debt................. -118,000

Total Unsecured debt.................... -11,681.55[b]

Net Assets.............................. 215,818.45[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

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

beanielou

Halifax will be gone really soon freeing up some money. 

biggerpickle

Thank you beanielou! Indeed it will and the extra will go towards the M&S card as the interest free period on that runs out in November, yes, there'll be some interest I need to pay before it's gone completely but I'll cope!

biggerpickle

Annoyingly the service charge debt I'd factored into one of the CC balances is now going to have to be paid on July's payday from my current account as the lease portal only takes debit cards so that changes the amount I was going to chuck at cards this month. It's a bit swings and roundabouts but hey.

In good news, I paid the last £472 of the £6.5k solicitors divorce bill this week so that feels like a chapter firmly closed now 😀