Going to dig ourselves out of this hole

lincs1205 · 13 December 2018 at 8:29PM

Hi Glendasugarbean, thankyou for popping by to say hi. I keep thinking of ways we can get out of this debt, one thing we do have going for us is that this time we are in it together whereas before dh wasn't really that bothered. As they say rome wasn't built in a day and these debts aren't going to suddenly disappear overnight.

ratrace · 13 December 2018 at 9:00PM

Hi op, ok im not going to beat you up lol you have done that already and are ready to change. To be very honest your SOA is wrong and its not a true reflection on your spending i think you need to redo it for eg: No way are you only spending £100 a month on food for both of you, also fuel £60 a month you really need to check that if its true then that means you dont drive a lot so do you really need a £16k car just by selling that you can half your debt

so say the 16k caris due to be paid off next year but what is it worth and is it yours to keep or do you have to give it back

also the 8k+ hp what is that for and can you sell it, have you taken both your expenses into account or does the above soa only include your expenses if you could clarify the above point we could help you more :money:

lincs1205 · 13 December 2018 at 9:11PM

Hi Ratrace, many thanks for your reply your're right the grocery isn't correct in fact if i'm honest it's probably more like £250 if not more as neither of us are particularly good at forward planning as you can tell hhhmmm. The soa is ours combined I went through our bank statements over the past 6 months, you are correct in surmising that that the car is due to be handed back not till December next year though and to be quite honest I don't want to keep it longer than that as the tyres are extortionate to replace. The 2nd HP has only recently been taken out and we don't have a chance of getting out of it so we are tied into that for the next four years unfortunately. From this pay day we are each going to take out £40 a week for personal spends and set ourselves a challenge. I for one have realised how frivolous we have been and I am determined to bring our debt free date forward from 2034 to 2022 but this can only be done by hard work and graft. If theres anything else that needs clarifying please ask. Thankyou

in_need_of_direction · 14 December 2018 at 10:53AM

Hey, can I butt in and ask, if the car tyres are extortionate,is the monthly car maintenance amount enough?

lincs1205 · 14 December 2018 at 6:50PM

Hey, in need of direction thankyou for saying hi. To be honest the maintenance on the car is included in the price of the pcp and part of the reason we are in so much debt is because neither of us have any idea how to budget.

Since taking our heads out of the sand we have tried to curtail our spending, this month we are £92 into our overdraft as opposed to £632 last month.

117pauline · 14 December 2018 at 8:05PM

Hi lincs

You are on the starting blocks.

An SOA is a work in progress. I would suggest you perhaps should make yourself a realistic SOA for the last couple of months so you can highlight your real trigger areas. You also have no

I hope your OH has not gone through with the bike purchase. Sell your TT tickets, which will be easy as they are always popular. If you don't want to do this, then add in a realistic holiday budget for the Isle of Man.

Then have a look at all your regular outgoings to check you have the best deals.

I would also suggest you start a spending diary which is updated with every purchase. Perhaps have a weekly "meeting" where you look at your spendings then reward yourselves with a (small) treat afterwards.

Good luck
Pauline

Munchin · 16 December 2018 at 9:05AM

Hi Lincs

Just popping in to say good luck

*subscribes:)

enthusiasticsaver · 16 December 2018 at 9:29AM

Well done on your soa and as a PP said it is a work in progress.

I think £100 on groceries is unrealistically low. £200 may be a good start. Nothing in presents may also be a tad unrealistic. Tha5 should cover birthdays, Xmas, mother's and Father's Day etc. You don't have children but do presumably have other family.

One big omission is nothing allocated to an emergency fund. This is massively important and key to getting out of debt. You have a house, a car and pets and no emergency savings and you have hopefully cut up your credit cards. That means you need a backup for if something goes wrong. Emergency vet bill, boiler repair, new tyres etc etc. There is always something when you have a car or a house. Start saving to build that up. Many people recommend £1000 as a good EF but £500 is a good start.

I think allocating each of you some personal spends and tracking spending are both great ideas. You have more than £30k of credit card debt so this is not going t9 be a quick journey. You need to live whilst repaying debt. I don't think you should sell your TT tickets. If this is a regular thing then save up out of personal spends for future concerts. The golden rule is if you don't have the cash then don't spend it.

You have a healthy surplus so with some financial discipline you can do this without resorting to sackcloth and ashes. It is just developing a healthier mental attitude to managing your finances. You know where you were over spending so that is a good start but finding out why is another matter. Often state of mind and spending are inextricably linked. People spend to make themselves feel better. You mention the YOLO mentality and believe me you are not the first to talk about this. There have been lots of diary owners who have come for advice when in tens of thousands of pounds in debt by adopting this attitude of life is short and therefore that means they need to go wild and spend way more than they can afford. Then something happens, illness, maternity leave, redundancy and all of a sudden the debt is a millstone when income is reduced. Budgeting means you save for life experiences, holidays etc. It does not mean you never can do them.

lincs1205 · 16 December 2018 at 7:23PM

Hi everyone,

Munchin thankyou for subscribing :wave
117 Pauline, many thanks for your comments i have certainly taken them on board.
Enthusiastic saver, you are so right when you say that spending and mental health is linked I know that if I go shopping when i'm upset then i'm more inclined to buy things with no regard to what i'm buying and why. With regards to the emergency fund and presents I was thinking possibly £25 each, whenever I have tried to save or set challenges for myself before I have always left myself short each month. This time I am so determined and it helps so much knowing that dh is onboard this time around.

A bit about us I am 40 and dh is 44, 45 in a few days Christmas baby, we also have a furbaby who is 17 in march so a proper old lady bless her.

Now in previous years I would have just bought him something and put it straight on the credit card but this year I haven't. I think I link money and buying things to making other people happy, my mum made a comment quite a few years go where she said I think you should get your parents presents even if you are in debt or words to that effect.

Now we have prior to our lightbulb moment booked to go to center parcs for a few days in January it is all booked and paid for but we have already agreed that we are only going to go out once a day, we are going to take all our own food instead of shopping in there vastly overpriced market.

One of the things that doesn't help with budgeting is that dh payday is a rolling payday so he never gets paid on the same day whereas I do give or take when the 25th of the month falls. Any suggestions about how to plan around it our dds usually all go out round the beginning of the month.

enthusiasticsaver · 16 December 2018 at 10:01PM

lincs1205 wrote: »

One of the things that doesn't help with budgeting is that dh payday is a rolling payday so he never gets paid on the same day whereas I do give or take when the 25th of the month falls. Any suggestions about how to plan around it our dds usually all go out round the beginning of the month.

Adding up your utilities, credit cards, mortgages, insurances etc they appear to tally up to £2151.19 so presumably that is the amount which comes out around the 1st of the month in direct debits? If your salary always comes in on 25th monthly that is helpful as you know that there is £1855.80 towards the monthly direct debits leaving a £295.39 shortfall to come from your DH pay. Maybe take £300 from your DHs pay (by the end of each month) to go into the direct debit account and divide the other £1428 between savings and monthly expenditure account. Try not to anticipate your pay and go on a payday splurge but work out a monthly budget after you have both been paid. Why is it a rolling payday for your DH? Is it every 4 weeks?

I think to make things easy for yourself you would be best off having one account for direct debits making sure that by the 1st you have enough to cover them all and do not use the account for anything else, one for monthly expenditure (food, fuel, entertainment and personal expenditure) and a couple of savings accounts (one emergency not to be touched except in an emergency and one for things like gifts, holidays, car maintenance etc). Any spare money you have unallocated you could either put into savings or overpay into debt. That way you start to get used to living within your income without relying on credit.

Going to dig ourselves out of this hole

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