Can I be Debt Free?

Cashew

I guess the answer is 'yes' as anyone can but can I?

I have filed out the Statement of Affairs form and here are the results:
Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1400
Total monthly income.................... 1400[/b]

Monthly Expense Details
Rent.................................... 430
Council tax............................. 32.5
Mobile phone............................ 15
Internet Services....................... 15
Groceries etc. ......................... 150
Clothing................................ 100
Other travel............................ 20
Haircuts................................ 10
Going out............................... 400
Supplements............................. 20
Gym..................................... 30
Total monthly expenses.................. 1222.5

Assets

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card - Natwest..........3764......86........0
Credit Card - Egg..............1100......25........0
Loan - Natwest.................7990......156.......0
Total unsecured debts..........12854.....267.......-

Monthly Budget Summary
Total monthly income.................... 1,400
Expenses (including secure debts)....... 1,222.5
Available for debt repayments........... 177.5
Monthly UNsecured debt repayments....... 267
Surplus(deficit if negative)............ -89.5

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -12,854
Personal net worth...................... -12,854

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.
I haven't included my student loan as I have no idea how much they are and I haven't started repaying them yet.

Each month I am spending more than I earn but I just can't seem to plug the gap. My Egg credit card has been cancelled by them so I can't use it any more but still have to pay it back. The Natwest one is still active but I haven't used it for a while - mainly because it is maxed out and I have a loan which I took out to pay off my credit cards and overdraft.

Going out drinking is probably the biggest drain on my finances. I stopped going out for a whole month recently and it was the first time in a long time where I haven't gone over budget for the month. But I missed my friends and I missed going out and having a good time.

Since the start of this year I have put in more effort into trying to sort out my finances.

I didn't renew my mobile phone contract when it expired and switched to pay as you go.

I have started walking to and from work most days which saves me £1 per journey and I am taking in my own lunch to work which was costing me about £5-6 per day - it is probably costing me £1-2 per day now.

I try not to buy clothes but usually crack once a month and buy something.

I don't expect to pay my debts off early, but I would like to reduce the amount I spend over my earnings each month.

For me to live comfortably I would need to earn £28,900.73 / £20,378.04 PA where as I currently earn £21,884.4 / £16,787.88 PA (I'm sure I get more than this but £1400 after tax equals £21,884.4 per year according to The Salary Calculator).

Any tips or advice would be great.

Thanks

GeorgeUK

You may be able to cut down the groceries by planning meals - there is alot of good info and recipies on the old style board.

£400 per month on going out?
Sorry, but this level of spending is what is causing the problem in my opinion. £100 a week is a bit excessive. Even if you only cut this in half, you'll be making a huge dent on those cards - and if you keep spending the same amount in paying off the cards while they are 0%, you'll soon be able to save up to pay off the loan early - even with a settlement fee.

CCCS_Matthew

Hi there,

I think you've answered your own questions to be honest Cashew, you need to cut back. Looking at your expenditure you claim to spend £500 between going out and buying clothing which is an incredibly high amount if you’re trying to pay off debts.

Have you tried going out with your friends and not drinking, or limiting it to one trip a month? Is there anything else you can with them that doesn't involve spending a lot of money? Perhaps taking it in turns to host an evening at your own home?

You've done well at cutting back in the other areas, but at the moment a 3rd of your income each month is being eaten up which could help pay your debts off. Try looking at the snowball calculator on whatsthecost.com to see how much of a difference it could make.

CCCS

Clariman

Hi Cashew and well done for posting your SOA. If your SOA/budget doesn't balance then you will get further in to debt each month. The areas that stand out to me in terms of your expenditure are Going Out at £400 and clothing at £100. Supplements & Gym come to another £50 per month. Assuming that you are catering for one, then your grocery bill probably could be trimmed a little. The areas of focus clearly are Going out and clothing but I don't think I am saying anything you don't know already

Going out drinking is probably the biggest drain on my finances. I stopped going out for a whole month recently and it was the first time in a long time where I haven't gone over budget for the month. But I missed my friends and I missed going out and having a good time.

Of course, you don't want to miss spending time with friends, but friendship comes free. The issue is what you do when you are with your friends and the amount of money you spend. My guess is that if you spoke to your friends and said "you know what, this £400 a month is killing me financially - why don't we do (insert your cheaper activity of choice)" then they'd say "do you know what- me too!".

I'm now going to have a Grumpy Old Man moment (I'm not that old really). If you really are spending a significant part of that £400 on drinking then that has other potential health issues.

Sorry to be blunt, but hope it makes some sense

Good luck
Clariman

Cashew

Thanks for replies people.

You are all right! The 'going out' needs to be cut. It is on average £100 per week and that is usually two outings to the pub. I couldnt go out and drink and I also do like to drink as it makes life that little bit more enjoyable.

Food-wise I am learning to cook at the moment so I cook a meal each night. This is proving to be quite expensive as most recipes I have require an ingredient I will only use once but can only be bought in a large amount. I'm sure they all add up.

I've thought maybe taking all the money out of my account when I get paid and just using cash rather than debit cards might make me realise how much I am spending. Or I might just spend it all at once...

kazwookie

Hi

I agree with what has already been said £400 per month = £4800.00 per year, that is a lot of money.

I think you already know deep down that amount of going out spending money has to cut.

Like some one hasalready said, can you not do nights in? and all your friends bring food and drink with them, say to the value of £10 each.

I am sure with a bit of work you can get yourself sorted out.

Clariman

You are all right! The 'going out' needs to be cut. It is on average £100 per week and that is usually two outings to the pub. I couldnt go out and drink and I also do like to drink as it makes life that little bit more enjoyable.

I am a bloke and I am probably a fair bit older than you but surely you can have a good night out with your friends without spending £50 at the pub? I mean ... last week I went out with some friends for a drink and we each put a tenner in the kitty, had 3 rounds of drinks with some bits and pieces to eat and there was still a fiver on the table at the end of the night. Now my idea of a night out with friends is probably different to yours, but I've also spoken to my son who is in his 20s. He says that you would have to "go some" to spend £50 a night on drinks ... but maybe it includes a taxi home and a take-away on the way back.

I wouldn't take issue with anyone having fun and going out for a drink, but £50 for a night down the pub is a heck of a lot and doing it 8 times a month is more than a heck of a lot.

Why can't you do it 8 times a month and spend £20 instead ... that would cut down your expenses by £240 a month while still having 8 nights out with friends.

Methinks that your lightbulb moment hasn't fully illuminated your situation yet

Clariman

shannys_taxi_driver

Hi Cashew,

I live on my own, used to go out a lot every month with my friends until I started waking up to my debts last year. Since then I've been only going out every 2 or 3 weeks, I still have the same relationship with my friends since I've grown up with them, they understood when I first said I had to cut down, they did the same as me and have become better off as well.

The moral of my small story is that you'll be helping them save money as well without them even realising.

Good Luck

GeorgeUK

Rather than take out all your money and just use cash, go out and have a look around for what you want/need. Once you have your mental shopping list made up, then withdraw cash from your account and pay in cash. This cuts back on alot of unnecessary spending as you get time to think "do i really need that" on the walk to the cash machine. That and if you have a dodgy memory like me...

Snafflepants

Hiya,

How about getting people round for a boys night in? Once a month I take my DD round to my best friends for a PJ party and my OH has his mates round for a poker night where they bet for sweets or matchsticks.

They all bring round a crate and OH makes the food - about a tenner for chilli and jacket potatoes for 4 or 5 of them...

Also they come round and play on the X box - keeps them busy well after DD and I get back

Best of luck...:j

Snafflepants

Posted twice - sorry!