Determined to be Debt Free by 40!

Izzasmall · 16 January 2019 at 2:40PM

Hi all!
Finally taken the step this new year to properly look at my finances as I am sick of living paycheck to paycheck, with absolutely no savings to back me up. Also surprised to see how much money I waste on rubbish every month! I'm 30, married and have 2 kids ages 9 and 5. We have a mortgage and lots of unsecured debts! I plan on absolutely hammering these this year and trying to build up some savings for emergencies so I don't need to rely on credit cards when unexpected bills appear! I'm absolutely fabulous as setting a budget, but I'm even better at completely ignoring it! So here goes...

Secured Debt
Mortgage Balance - 01/01/2019 £50333 with 22 years remaining

Unsecured Debt
Credit Union Loan - 01/01/2019 £7903.44 with 30 months remaining
Car Finance - 01/01/2019 £8658.6 with 60 months remaining
Credit Card - 01/01/2019 £2097 with 23 months 0%

Savings
Credit Union - 01/01/2019 £755.51
Emergency Fund - 01/01/2019 £200

I want to pay off the credit card first, then overpay the car finance, then the loan, then pour everything into my mortgage. I want to be clear of the debt by 2022 and clear of the mortgage by 2029. I think this is doable...hopefully

I'm hoping that by hanging out here I'll keep myself motivated.

Thanks for reading! Any tips etc would also be appreciated!

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 889
Partners monthly income after tax....... 1600
Benefits................................ 137.6
Other income............................ 0
Total monthly income.................... 2626.6

Monthly Expense Details
Mortgage................................ 292
Secured/HP loan repayments.............. 25.470000000000027
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 95
Electricity............................. 80
Gas..................................... 80
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 38
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 11.99
Groceries etc. ......................... 300
Clothing................................ 20
Petrol/diesel........................... 80
Road tax................................ 1.66
Car Insurance........................... 36.99
Car maintenance (including MOT)......... 21
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 12
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 10.05
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 70
Haircuts................................ 7
Entertainment........................... 0
Holiday................................. 50
Emergency fund.......................... 100
Credit union............................ 30
Total monthly expenses.................. 1361.16

Assets
Cash.................................... 955.51
House value (Gross)..................... 70000
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 74955.51

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 50196....(292)......4.24
Hire Purchase (HP) debt ...... 500......(25.47)....0
Total secured & HP debts...... 50696.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin Credit Card.............2097......150.......0
Credit Union Loan..............7903.4....269.......3.5
Hitachi Car Loan...............8653......144.3.....3.2
Total unsecured debts..........18653.4...563.3.....-

Monthly Budget Summary
Total monthly income.................... 2,626.6
Expenses (including HP & secured debts). 1,361.16
Available for debt repayments........... 1,265.44
Monthly UNsecured debt repayments....... 563.3
Amount left after debt repayments....... 702.14

Personal Balance Sheet Summary
Total assets (things you own)........... 74,955.51
Total HP & Secured debt................. -50,696
Total Unsecured debt.................... -18,653.4
Net Assets.............................. 5,606.11

Created using the SOA calculator.
Reproduced on Moneysavingexpert with permission, using other browser.

Isa

a_silver_lining · 16 January 2019 at 2:56PM

Hi Isa, just a quick hello and to say that your goal looks good! A rough bit of head maths shows that even without your normal monthly mortgage payments reducing the balance you would be debt and mortgage free in the 10 years by paying out just over £550pm. I think

Totally doable and a great goal!

Izzasmall · 16 January 2019 at 3:08PM

Thanks Silver! Wow that's quick maths! When you put it like that, it sounds so easy and totally doable!
I'm so determined this time to finally be debt free and live within my means. I've made all the possible mistakes...taking credit cards to pay off store cards, taking loans to pay off credit cards etc etc..its a never ending spiral of over spending and debt consolidation.

This time once something is paid, I'll be closing off the account. I have just cleared my £2200 Very account and its now closed. This is the account that has been the route of all my problems! First step complete

ratrace · 16 January 2019 at 4:14PM

Hi welcome, the first thing sticks out to me is that you have a £4,000 carbut you own £8,500 and the apr is 3.2 are you sure this is correct have you rolled some negative equity from a previous deal

Izzasmall · 16 January 2019 at 4:47PM

Hi Ratrace,
Thanks for reading

Yes we had a PCP on car now worth 4000 (probably less if sold to a dealer) with 5700 left to pay, thanks to going way over the mileage allowance. Lesson learned. I also had a debt that was about to get a years worth of interest pilled on if I didn't clear it. So I took the loan and cleared car finance (kept car) and the debt (closed the account). I plan on overpaying this a lot though. And once debt free I am never, ever getting PCP of HP again.

Isa

Izzasmall · 17 January 2019 at 9:26PM

Well back at work today and didn't spend 1 penny. Brought a packed lunch and avoided Costa!! This is one of my big downfalls. I can easily spend £10 per day on coffee/snacks whilst at work. No more!! Also I drink far too much coffee and have been having trouble sleeping recently. Probably a mix between the caffeine ad the debt.

3 work days x £10 = £30 per week I can save.

Izzasmall · 17 January 2019 at 10:59PM

I've also set up a standing order to take £137.60 (child benefit) and put it in my emergency fund every 4 weeks. And another to take £120 on pay day and put it in my Xmas/holiday/birthday fund.

A big part of the reason we are in so much silly debt is because we make no saving plans for the future. So when our washing machine breaks I 'buy' a new one off of the catalog or if we want to go on holiday I take a £700 cash advance from a credit card.

Having savings is definitely going to be a big step to debt free bliss.

Izzasmall · 20 January 2019 at 12:26PM

Yesterday I bought a sealed tin bank. We have agreed at the end of each month we will put whatever we have left in our wallet/purse in the tin. It can be opened up either during summer for the holidays or at Xmas for shopping. Husband is also paying 50 to a minage in his work which comes out in July so that will be £450 for either summer holidays or putting in the emergency fund if we don't need it.

Determined to be Debt Free by 40!

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