Our road to recovery-Part 2

ltm07

Hi all. Decided to start a brand new diary as those of you who have read & contributed to the last one maybe confused as to why our LBM was £32,666 to start with & £33,744.48 later in the diary. Here's a little about ourselves. OH & I have been together for nearly 9 years & she has a daughter who is 13,who i have helped to bring up since she was five. We both had quite a few debts before we met but nothing too serious. We moved in together 6 years ago & the house we bought needed quite a bit of work doing to it. We are not that far from having the house just how we want it but didn't budget very well at all. With the money i made from selling my previous house we put £10k on this house but ended up blowing the rest on shopping sprees & holidays. Our LBM came last July when we sat down & worked out all our debts & we were astounded to find that they totalled over £32k. We were even more shocked a few weeks ago when i looked at how much we owed on two loans to find that we actually owed over £1,000 more than we thought,so at our LBM we actually owed over £33,700. We were gutted as it felt we were back to square 1. Before our LBM we had booked 2 holidays,one to Cornwall & the other to Australia for my brother's wedding(OH got £3000 compensation from her old job with the Council,as the female staff weren't being paid he same as the male staff for the same job,or something along those lines). We booked the flights with this money. Looking at our debt total today it doesn't look as though we have made much progress but we really have been trying so hard to live within our means. Things were starting to look really good until earlier this week when we got hit with a huge bill for our car,as we had it serviced & MOT'd. It needed a new Cam belt,along with other bits & bobs & the total we had to pay was over £600. We have cut down wherever possible & should hopefully start seeing some real progress when one of our loans finishes in July. Had a bash at doing the SOA calculator that Immoral Angel kindly recommended & it says that we have £210 disposable income,or £970 a month to throw at our debts. Currently paying £700 a month towards our debts but can't really pay anymore as it would leave us with absolutely no breathing space. The only problem is i can't Copy & Paste it onto here for some reason but i have it all written down on paper so will post it on here. Thanks for reading folks & thanks to all those who read,contributed & advised us on the other thread..

Debt at LBM(July 1st 07)-£33,744.48
Debt Today(March 20th 08) £32,100.58

findingmyownway

Hi ltm07,

It sounds like you have made good progress getting into the right mental frame of mind for tacking the debts. I didnt see the other thread and so look forward to seeing your SOA.


Remember to count your blessings, it sounds like you are happy with OH and have a lovely step-daughter. I have been with my OH for a similar length of time and his eldest daughter is the same age. Its amazing how much she has changed over the time period and i'm sure your DD is the same. Is she aware of any of the financial problems? I can understand you not wanting to worry her but it might be worth mentioning a few things so she knows not to expect any expensive ski trips :eek: or similar for the next few years (recent point of debate at my house!!). Has she got paper round or something to help pay her socialising costs? Even those trips to the cinema with friends easily add up to £10+ with bus fares and popcorn etc.


I am glad the SOA calculator shows you are in the 'green'. Nows the time to maximise that income and make savings to allow for car trouble etc n the future without relying on credit.

Well done for posting

ltm07

My Income(Monthly-net) £1,074.66
OH's Income(Monthly-net)£860
Family Tax £81.46
Child Benefit £44.11
Overtime & bonuses £400-£500
Total Income £2460.23

Outgoings
Mortgage £435.26
Endowment £68.46
Life Insurance(Me) £12.62
Life Insurance(Joint)£10
T.V. Licence £11.61
Broadband £10
Mobile(x2)£40
Bank Monthly Fee £10
Council Tax £85
Car Tax £14.16
Car Insurance £28.20
House Insurance £18.08
Water Rates £43.03
Gas £65
Electric £26.50
Phone £25
DD's Pocket Money £32.50
Groceries/Odds & Sods £390
Petrol £65

Total £1340.42

DEBTS(Monthly Payments in Brackets)

Halifax Overdraft 13.35% £4622.68 (£50)
Mint Credit Card 12.9% £425(£8.50)
Nationwide Overdraft 9.9% £750(£6.50)
Nationwide Overdraft 9.9% £650(£6)
Abbeyloan 6.9% £488.10(£97.62)
Halifax Loan 6.9% £3225.82(£138.59)
Nationwide Loan 6.7% £6659.82(£148.51)
Nationwide Loan 6.7% £3377.02(£97.84)
Citicard 5.85%£3039.20(£65)
Tesco Credit Card £2500(£55)
Natwest Credit Card £3006(£65)
Bank Of Mum! £3415(£20)

Total £32,158.64(£758.56)

We were paying around £700 a month towards our debts but have been trying to shift as much as possible onto lower interest cards,so have to pay a little more a month. However,we have to be realistic so will leave our payments set at £700 a month on the www.whatsthecost.com calculator. Thanks for reading folks & please feel free to pick atour SOA,to see if we can cut back anymore. DD tearing hr hair out now to use computer(seems she wants to go on one of them internet forum thingys to talk to her friends from school,strange kid;) ). Probably wont get on again tonight so thanks again for reading & be back on tomorrow,God Bless!

ltm07

Thanks findingmyway. We are looking into getting her a paper round,now the days are getting longer. We give her £7.50 a week,& she is a great help around the house,especially asi am working around 60 hours a week & OH doing regular nights & taking on extra shifts. She knows the situation & the day trips to Skeggy & weekends away to Blackpool & Scarborough etc have to be put on hold for the time being. We are encouraging her to take up new hobbies as she is spending too much time on the computer(hark at me)! She has started to go to dancing classes & is doing a show in April. It is all money but we don't mind working that bit harder to make sure she's happy. Out of the £7.50 we give her we put £2.50 of it away for her spending money for our holiday in the summer,which eases the burden a little. Thanks for replying,back on tomorrow.

firesidemaid

just a quick post...

your water rates seem high - are you on a meter? if not i'd go for it. we used to pay the same as you per month, now we pay £25 a month max.

the £390 for groceries etc - that is a lot for groceries/cleaning, but what else does it include? do you have a budget for christmas, birthdays, clothes, haircuts etc or is it included in this?

you should be able to pay off the mint card quite soon and then start on the halifax and other overdrafts - by paying off the higher percentage debts you will feel even more motivated and will have more money (less interest) to throw at the others.

good luck x

ltm07

Thanks for replying. Groceries also include DD's school bus fare & window cleaning money,which is £3.50 a time & they're usually done fortnightly. Window cleaner a good mate of mine so don't want to cancel & we budget £7 a month for this. In the winter months & when weather's bad he probably does them once every 3 weeks so this isn't burning a massive hole in our pockets to be honest. Basically any overtime we do goes towards holidays & Xmas,birthdays,treats etc. Was using our budget money up most weeks but now shop at Aldi,which is saving us loads. We also put any money left over from budget towards Xmas,holidays etc. About the Mint card,i would like to clear this ASAP,but can only shift it onto our overdraft at 13.35% at the moment,so we would be paying more interest if we were to shift it onto overdraft.

WhoopieDoodle

I agree with firesidemaid regarding the water meter. We were paying £32 a month but since we had the meter installed it has dropped to £18 a month!

ltm07

Will also look into whether it would be worth getting a meter. It is £43 over 8 months so over 12 months works out at £28.68 so we could still possibly save a little.

ltm07

About the Mint Credit Card. I could really do with clearing it. I watched Martin on tv the other night where he advised the bloke from the Apprentice to pay for everything on his CC & pay off the full balance each month. I have been toying with this idea for a while, but obviously as our debts are massive don't want to hit any obstacles. We could pay off the Mint card with our overdraft & then use it to pay for everything & clear the balance each month,which would mean that our wages are staying in the bank longer. Do any other DFW's do this or is it best left to those people who have no debts?

WorkingHardDFW

Hi ltm07 - You've done so well with your debt despite the setback. Its a real change of mindset that will get us all debt free in the end.

Our debts went up when we got a massive £2.5k child tax credit bill just post our LBM. Very frustrating :mad:

I've toyed with the idea of using a cash back credit card as Martin suggested but to be honest until our debt is really down to virtually nothing I won't do it since I don't trust ourselves. My idea would be to use one to pay for our petrol (not an inconsiderable monthly amount) and to clear it each month with the expenses money which is now put into a seperate account for the purpose. As I said until we are on a much much sounder footing I'll stick with only spending whats in the account each month. Thats an achievement.

firesidemaid

i have a cashback credit card - i purchase on in and then immediately ie. same day transfer the money over to the card via internet banking. you do have to be strict.