Help and Advice - Small Amount of Debt

CashOut · 11 July 2019 at 12:13PM

Hello my fellow Debt-Free Wannabe's

First time posting (and first time visiting the site actually), I'm hoping for some advice to take control of my debt situation before it spirals out of control.

Financial Background;- I have 3 defaults on my credit file from Feb-2014 meaning I can't get a consolidation loan or 0% balance transfer credit card, this also has impeded me to some degree for getting pretty much anything where a credit check is required. My credit score has sat at around the 500 points mark since the defaults and never goes up.

I have taken a look at the SOA link in this sub-forum but it looks a little complex and I don't have the figures or details for a lot of the information required to pull together a fully comprehensive list (I'm guessing without this it's going to be very hard to help me?), I'll try my best to complete it below but will apologize now for any gaps.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1880
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1880

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 300
Rent.................................... 275
Management charge (leasehold property).. 0
Council tax............................. 133
Electricity............................. 65
Gas..................................... 0
Oil..................................... 0
Water rates............................. 32
Telephone (land line)................... 15
Mobile phone............................ 130
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 32
Groceries etc. ......................... 200
Clothing................................ 50
Petrol/diesel........................... 150
Road tax................................ 13
Car Insurance........................... 33
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10.4
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 5
Entertainment........................... 75
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1586.4

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 0........(300)......0
Total secured & HP debts...... 0.........-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Capital One....................1300......80........30
Aqua...........................2500......80........35
Total unsecured debts..........3800......160.......-

Monthly Budget Summary
Total monthly income.................... 1,880
Expenses (including HP & secured debts). 1,586.4
Available for debt repayments........... 293.6
Monthly UNsecured debt repayments....... 160
Amount left after debt repayments....... 133.6

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -3,800
Net Assets.............................. -3,800

Candyapple · 11 July 2019 at 1:12PM

The biggest thing that stands out to me me is £130 for mobile phone as that is a ridiculous amount. Are you in contract? Is it possible to switch to a SIM only deal?

The £300 per month - I take it this is for car finance? Can you not sell/ trade in for a cheaper model?

Groceries at £200 per month for 1 person again is very high. You could easily cut this back to £120 per month. Have a look at the Old Style board for ideas on how to cut back and meal plan.

Clothing - are you really buying £50 worth of clothes every month?

Presents - are you really spending £600 per year on presents? Can you not limit this to a lower amount or make a pact with family to say only buy for children and not adults?

If you really and truly do have £133 spare each month to throw towards debt, then if you made some cut backs to the above subjects, you could easily add another £300 to this figure, making your total £433 to put towards clearing debt.

Enter the figures into the below and see what a massive difference paying £133 per month gets you vs paying £433:
http://www.whatsthecost.com/snowball.aspx

MallyGirl · 11 July 2019 at 1:13PM

CashOut wrote: »

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1880
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1880

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 300
Rent.................................... 275
Management charge (leasehold property).. 0
Council tax............................. 133 single person discount, paid over 12 months?
Electricity............................. 65
Gas..................................... 0
Oil..................................... 0
Water rates............................. 32 are you on a meter? I pay less than that for a family with 2 big messy dogs
Telephone (land line)................... 15
Mobile phone............................ 130 This is a crazy amount to be paying for a phone, given your salary. Have you tried getting a better deal - when does this one expire?
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 32
Groceries etc. ......................... 200 You could bring this down a bit for 1 person
Clothing................................ 50 wear what you have for a bit
Petrol/diesel........................... 150
Road tax................................ 13
Car Insurance........................... 33
Car maintenance (including MOT)......... 0 None at all?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10.4
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50 That is £600 per year - might want to be less generous till the debt is gone
Haircuts................................ 5
Entertainment........................... 75
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1586.4

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0 Should be mentioned here
Other assets............................ 0
Total Assets............................ 0

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 0........(300)......0
Total secured & HP debts...... 0.........-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Capital One....................1300......80........30
Aqua...........................2500......80........35
Total unsecured debts..........3800......160.......-

Monthly Budget Summary
Total monthly income.................... 1,880
Expenses (including HP & secured debts). 1,586.4
Available for debt repayments........... 293.6
Monthly UNsecured debt repayments....... 160
Amount left after debt repayments....... 133.6 Do you have any left?

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -3,800
Net Assets.............................. -3,800

You could make some changes and get this under control

CashOut · 11 July 2019 at 1:55PM

Hey,

Thank you for the replies, I've tried to quote them to make this reply process easier but this is the strangest forum I've ever used and the "multi-quote" function doesn't work, the standard "quote" function removes the previous quote and the single quote opens an empty thread reply so please bear with me.

Council Tax - Apologies I've typed the value without the single person discount, it should be £99

Water Rates - Based on bill left by the previous tenant (I've only just moved into the flat so have no idea what the monthly usage would be).

Mobile Phone - Contracted until November, planning on swapping to a SIM only package (£10-20 pcm).

Car - Yes the car is the £300 pcm, I could sell it but it wouldn't clear the finance and I wouldn't qualify for a new finance agreement so it would mean I'm still paying for the car but then have no car at all

(I require a car for work).

Groceries - I'll take a look at this, I was under the impression that £200 was cheap at only £1.66 per meal each day.

Clothing - The value was an assumption, I don't buy something each month, but a new winter coat (£150-£200 for example) would eat up a large proportion of that value and that's before basics.

Car Maintenance - Car is too young for an MOT, service is included in the monthly agreement and mileage I get from work covers the wear-and-tear on the vehicle.

Presents - Yeah give or take based on the year so far, I'm at the age where everyone is getting married, moving into their own homes, milestone birthdays and that's before factoring in family so things have been a little high as of late.

Assets: Car's - I don't own any vehicles, it's on a HP agreement so not mine (technically).

Amount Left - Usually a little more than that, I tend to finish the month with around £150 in my current account and had been splitting this across the two credit cards (this is a new thing as my previous accommodation was more expensive so left me very little at the end of the month).

Willing2Learn · 11 July 2019 at 1:59PM

Have you tried the CapitalOne eligibility checker for their Balance Transfer card? When I was struggling with a bad credit file and low debt, CapitalOne gave me second card when I applied for their BT card (I already had their standard card). If you could BT the Aqua debt on to a 0% CapitalOne BT card then that would provide you with a little more wiggle room.

dan958 · 11 July 2019 at 2:26PM

Yeah, some really high outgoings there on silly things like £130 a month for a phone contract. Are you buying phone contracts for multiple people or something?!

As Candyapple said, £120 is perfectly doable for 1 person a month. Make sure you are doing some home cooking rather than ready meals, as you can really save money that way. Oats, rice, beans (black beans, kidney beans etc), lentils are all really cheap.

getmore4less · 11 July 2019 at 7:12PM

If you are getting paid mileage that needs putting on the SOA.
Car costs are disproportionate to income.

Why will you need a £10-£20 phone contract plenty of decent ones at £5-£10.

Could you drop the land line,
Could go catchup and no bbc drop the TV licence.

Clothes is very high make stuff last longer, winter coat should last 5-10years.
Still wearing mine from 2013 loads of years left in it.
Audit what you have a budget essentials like underwear then shop at TK and other budget stores.

Start a spending diary so you know where the money is going and update the SOA as you get better data.

If you think more carefully about where you want to spend money you will soo get rid of the debt and can start saving for important things and not commitment to a expensive contract.

CashOut · 11 July 2019 at 8:12PM

getmore4less wrote: »

If you are getting paid mileage that needs putting on the SOA.
Car costs are disproportionate to income.

Why will you need a £10-£20 phone contract plenty of decent ones at £5-£10.

Could you drop the land line,
Could go catchup and no bbc drop the TV licence.

Clothes is very high make stuff last longer, winter coat should last 5-10years.
Still wearing mine from 2013 loads of years left in it.
Audit what you have a budget essentials like underwear then shop at TK and other budget stores.

Start a spending diary so you know where the money is going and update the SOA as you get better data.

If you think more carefully about where you want to spend money you will soo get rid of the debt and can start saving for important things and not commitment to a expensive contract.

I’m unsure how I would even add something like mileage to a SOA, I don’t have a set amount of mile that I do in a month, this year alone I’ve had variants from £60 to £600 in mileage claims, unfortunately it’s too unpredictable to even consider including it so it’s better not factored at all.

Yeah the cars probably a little more expensive than I should have went for, circumstances were different two years ago I guess.

Cheapest SIM only contract on my providers website is £13 pcm with less than sufficient data (250mb pcm), so an additional “bolt-on” would be required to make it fit my current usage putting it at around £18 pcm.

If I drop the landline I would then lose the internet so most likely a no-go.

I would have to educate myself around the legality with a TV license, I always just assumed that because I own and watch a TV then I would need it.

I’ll take a look at the clothing, tbh I’d always thought £600 a year was reasonable as it really doesn’t go far, winter coat, two new work suits with additional trousers, two packs of shirts and shoe repairs each September would be around that alone. I’ve never heard of TK before, almost all my work stuff comes from Next, not really sure where else you would buy stuff like that tbh...? As for casual stuff I mainly pickup basics at Primark these days.

I’ll have a look into a spending diary, any advice on an app based one that’s easy to use?

Hopefully that’s then plan and also why I’m looking at it today when the total is sub £5000 and still “manageable” as I don’t want to be back here in 3-5 years with £30000-£50000 racked up as (no offence intended) some of the horror stories on this forum literally scare the !!!!!! out of me!

enthusiasticsaver · 11 July 2019 at 8:34PM

As others have said the clothes, mobile costs, presents and groceries are high and entertainment can be brought down. Depends on how hard core you want to be on clearing the debt but you are paying very high interest rates so my advice would be cut back to bare bones for a year.

On that Aqua debt for example you are only paying £80 a month and the monthly interest is almost £73 so only around £7 a month is going to reduce the balance. It will never be paid off at that rate. That should be the one you focus on first as it is the highest interest rate and the highest balance so your most expensive debt. The Capital one is better at only £32.50 interest per month so that is going down faster. I would reduce the payment on that one to minimum and direct it to the Aqua until it is gone.

enthusiasticsaver · 11 July 2019 at 8:43PM

If you input those figures into a snowball calculator you will see that it will take you more than 3 years to clear the debts and cost you over £2200 in interest. If you can increase the monthly payment to £200 and pay £40 to Capital One (assuming that is higher than the minimum) and £160 to Aqua you will be debt free in just over 2 years and pay just over £1000 in interest assuming you do not get a 0% deal in those 2 years.

Mrsn · 11 July 2019 at 8:49PM

Groceries is totally doable on much less. I spend £220 a month for 2 adults, 2 children, small dog and this includes toiletries. We very rarely eat the same meal more than once a month and utilise the leftovers.

Clothing allowance whilst might not seem much to you a new winter coat of that price is a luxury not a necessity.... you can get one for a 3rd of that price from the likes of primark or supermarket brands. I appreciate it’s different to what your used to but for a temporary measure it’s not unreasonable.

Help and Advice - Small Amount of Debt

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