New here, desperate to get out of debt

greenglove

Hello, I have been reading these forums for a couple of months now, and have been so inspired by other people's stories. I am finally taking the plunge and starting a thread of my own and would be so grateful for any help/advice anyone can offer.

A little bit about me:
32 years old
Moved out of home when I was 19 and moved to a different part of the UK to study/work. Sadly I got stuck in the trap of payday loans during my student years, and never got out of this cycle of debt until about 2 years ago. At that time I had a little bit of a lightbulb moment, and applied for lots of financial compensation refunds from the payday loan companies, many of which were upheld. Sadly by this time I had started relying on an overdraft and "bad credit" credit cards, so although I got a few refunds, this was not enough to cover the debt I was in.
For the past 6 months I have been desperately paying as much as I can each month to get out of debt, but each month I end up spending on my credit card again. This spending is not on "things", more so on travel to/from work, groceries, dinners out with friends, etc - just general living expenses that my budget has not stretched to. I do a budget each month but it never seems to last the whole month, hence the credit card spending.
My partner is now expecting our first baby and we are both trying to get clear of debt so we can actually enjoy living, have savings, and enjoy using disposable income again. I can't remember the last time (if ever) I have been able to buy myself something that didn't leave me short or leave me feeling guilty. (I'm talking about normal things like clothes).
I have done a SOA which I will post below. I have recently been accepted for a 0% balance transfer card with Barclaycard. This is 0% on BTs for 21 months with a 3.45% BT fee. I was thinking of moving my CC debt from family credit card, tesco and halifax all onto this card; but would appreciate any advice from others about whether this is a sensible thing to do.

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

Household Information[/b]

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

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

Number of cars owned.................... 0[b]

Monthly Income Details[/b]

Monthly income after tax................ 3124

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

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

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

Total monthly income.................... 3124[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

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

Rent.................................... 1000

Management charge (leasehold property).. 0

Council tax............................. 103.5

Electricity............................. 35.34

Gas..................................... 26.75

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

Water rates............................. 19

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

Mobile phone............................ 16.18

TV Licence.............................. 7.5

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

Internet Services....................... 16.5

Groceries etc. ......................... 75

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

Petrol/diesel........................... 0

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

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

Car maintenance (including MOT)......... 0

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

Other travel............................ 50

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

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

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

Pet insurance/vet bills................. 19.13

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

Contents insurance...................... 7.66

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

Other insurance......................... 6.64

Presents (birthday, christmas etc)...... 0

Haircuts................................ 0

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

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

Emergency fund.......................... 5

Nursing fees............................ 30.32

Apple storage........................... 2.99

Spotify................................. 11.99[b]

Total monthly expenses.................. 1433.5[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 0

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

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

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

Total Assets............................ 0[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

Abound loan....................6004.64...622.......12.2

Plata loan.....................1349.87...260.9.....34.9

Halifax credit card............1970.48...48.57.....0

Family credit card.............2760......150.......0

Tesco credit card..............1140.96...50........28.94[b]

Total unsecured debts..........13225.95..1131.47...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,124

Expenses (including HP & secured debts). 1,433.5

Available for debt repayments........... 1,690.5

Monthly UNsecured debt repayments....... 1,131.47[b]

Amount left after debt repayments....... 559.03[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 0

Total HP & Secured debt................. -0

Total Unsecured debt.................... -13,225.95[b]

Net Assets.............................. -13,225.95[/b]

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

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

greenglove

just to clarify, I have not listed my partner's income. We split all bills equally which is what I have listed on the SOA, however in the past couple of months I have been paying roughly £200 more than her into the joint account, so that she can pay £200 less to try to get on top of her own debts.

dawnybabes

Your gas electric are really cheap.  Do you really only spend £75 on food a month ? 

It’s obv wrong as you don’t have the £559.03 left at the end of the month.  Have you sat down and gone through your bank statements for the last few months to get the actual figures? 

MFWannabe

Hi and welcome to the board and the start of your journey to being debt free 
Your soa isn’t accurate as you don’t have £500 left over each month and you also say you put an extra £200 a month in the pot 
You need to do the soa as a couple listing all income and debts; you are a couple and about to become a family 
You both need to be on board with the debt busting (which it sounds like you are) 
Well done for getting to grips with it now and for getting a 0% Barclaycard; they’re normally one of the hardest to get. This will make such a difference to paying your debts but you must close the cards you transfer the debt from and stop using them 

Sit down together and post a honest soa and then we can advise 👍

James_44_2

If the monthly payment on the Abound Loan is correct then you haven’t got long left paying that off. In 10 months you will have a lot more room to manoeuvre in your budget

elsien

That’s not realistic. You talk about dinners out with friends, but you have nothing in there for entertainment Christmas birthdays and all the stuff that people always spend money on.
You talk about travel expenses, but again there’s only £50 on there for that. 

You don’t ever buy clothes I or have your hair cut? 

If that is half the bills, that’s £150 a month for two of you for food. How did you get get that figure?

 

I would query your choice to be giving your partner money to be paying her debts, leaving you to continue spending on the credit cards.  Are you a higher earner? 

I also wonder what the joint account is used for and how you agree who spends what out of it?


I suggest the two of you sit down together and look at your  spending in the different areas, look at your bank statements your credit card bills, your receipts. Keep a diary if you have to. 

Most people take a few attempts to get the SOA right, I think that yours is probably not correct as it stands.

FlorayG

HI. Have another 'go' at this, it's not as simple to get accurate as you think. If you are going to only list your own sending and not your partners, you need to include every penny you use to pay of her debts and money you save as well.
As an aside and for anyone to answer - how is any person allowed to get new credit cards over and over when there are debts on each one? Do they not check before they say "OK; we will let you spend more money you clearly don't have?"

twiggy86

Well done for posting on here and for trying to get this sorted!

I do agree with above comments that your SOA is aspirational (is that a word?!) if you are continuing to spend on credit cards each month. Also, if you're just starting I will say that (in my opinion) it's ok to not fully understand where your money has been going. Now is the time to look through your transactions to help get a better picture, but the thing that has helped me the most is that I track EVERY spend in my spreadsheet. It not only helps me stick to budget, but also helps me understand where I need to allocate the budget in the first place! 

Is your partner aware of the true extent of your debts and spending habits (i.e. that you aren't managing to cover everything without relying on credit)? Just checking that if she thinks it is fair and reasonable to pay less that you have given her the full picture. You are a couple and so even if you keep finances somewhat separate, your joint financial picture affects you both so she should have all the information. Not judging if as a couple given the pending arrival (congratulations!) you have decided to prioritise it this way - it can only improve your situation as a couple if your (i.e. you and your partner) debts are going down!

Good luck!

Brie

FlorayG said:

HI. Have another 'go' at this, it's not as simple to get accurate as you think. If you are going to only list your own sending and not your partners, you need to include every penny you use to pay of her debts and money you save as well.
As an aside and for anyone to answer - how is any person allowed to get new credit cards over and over when there are debts on each one? Do they not check before they say "OK; we will let you spend more money you clearly don't have?"

First off - I've moved this to the debt free wannabe board as more appropriate.

And for @FlorayG
Each bank/card company looks at the individual's credit history and judges how big a risk that person is and whether they fit their customer profile.  For some of the companies listed they are happy to take a bigger risk balanced by charging higher interest rates and on a percentage basis it works in their favour.  We only see the ones where things are tipping over the edge.  So basically that's why Barclaycards go to more secure low risk individuals who get charged 18% for not clearing their cards in full and Aqua go to lower earning more risky people who get charged 39.9% or similar.   

RAS

I'll agree with everyone else regarding the need for a joint SOA, even if you mark the debts me and her. What exactly is family credit card? And what is the APR?

You should definitely pay off Tesco. If you've already got 0% on the Halifax and Family card, when do those deals end? And what is the limit on those two cards? And can you over pay on the Plata Loan without penalty?

Even more importantly you need to plan now for when your partner goes on mat leave. Does she just get the statutory minimum for the minimum period or does her employer offer more? Does she plan to go back to work, part-time? Child care costs, child benefit and other benefits? 

You're actually going into a very dynamic period in terms of finances, so may want little spreadsheet which you can adjust over the next 18 months. Talking to each other is going to be vital.

Andyjflet

As others have mentioned, I would sit down with your last 6 months statements and have another go at the SOA as its not accurate IMO, more like the target you are aiming for. Either do a budget totally for yourself or include your partners income and expenditure as a household. Otherwise its pointless.

Couple of little things to mention;

DD and SO Check - go through and ensure you aren't paying for things that you don't use or don't need, cancel those subscriptions if applicable.

I would transfer the Plata and Tesco loans onto the new 0% card if your application has been accepted. The strat paying them down quickly.