Looking to clear debt by 2020
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MNM2903
Posts: 322 Forumite
Please see the SOA form ive done, some of the figures are a best guess but they are all there or there abouts. I should also note that the Argos, Virgin Credit card & Barclays are all on 0% interest. With Virgin its 40 month interest free and with Barclays its 35 month interest free.
That a side, we are looking at the best way to get rid of our debt by 2020 as we are wanting to look for a new house once our fixed term is up on our current mortgage. We both have reasonably well paid jobs but always end up skint with a week or so to go before the end of the month.
A large portion of this is on loans around £350 per month and then also nursery @ £399.50 per month.
We are currently going down the route of not spending then at the end of the month whatever we have left over gets paid off the debt, its frustrating that 2 people in work with decent jobs struggle like this and people getting houses paid for and free childcare when they are not working (something wrong with that), anyway rant over. What do you guys suggest, im not too savvy with money I just tend to try and live within my means and haven't had a great deal of debt but I was looking at the best way to relieve the pressure monthly so that we have a bit more in the bank in case of emergency etc, one option would be to take out a 10k loan which would be over 5 years and if we get the rate that we have been approved for 3.3% it would clear our debt and it would be around £180 per month, (significantly less than we pay at the moment) or we can carry on as we are and our debt will be clear by 2020 but it will be a bit more of a struggle.
Would love to just sell one of the cars but we have a 14 month old baby and the other half works for the NHS and they are not flexible so she has her car to get to work and i drop the little one off at nursery, she doesn't finish until late usually around 8:30 pm so i cant even pick her up as the baby goes down at around 7pm.
P.S im terrible at putting thoughts in to writing so apologies in advance, hope this makes sense. Just looking for advice really based in peoples experience wether we are better of paying off asap or struggling for a bit and paying it sooner.
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1476
Partners monthly income after tax....... 1350
Benefits................................ 80
Other income............................ 0
Total monthly income.................... 2906
Monthly Expense Details
Mortgage................................ 323
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 15
Council tax............................. 120
Electricity............................. 42
Gas..................................... 43
Oil..................................... 5
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 100
TV Licence.............................. 12
Satellite/Cable TV...................... 24
Internet Services....................... 21
Groceries etc. ......................... 200
Clothing................................ 100
Petrol/diesel........................... 110
Road tax................................ 13
Car Insurance........................... 100
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 399.5
Other child related expenses............ 80
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 7
Contents insurance...................... 7
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 200
Total monthly expenses.................. 2086.5
Assets
Cash.................................... 1000
House value (Gross)..................... 125000
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 300
Total Assets............................ 134300
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 100000...(323)......2.8
Total secured & HP debts...... 100000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................876.......30........29.9
Virgin Credit card.............1014......25........NaN
Oak Furniture land.............717.......11........9.9
Lloyds Loan....................4200......205.......NaN
Hitachi Loan...................4250......150.......NaN
Argos..........................350.......50........0
Total unsecured debts..........11407.....471.......-
Monthly Budget Summary
Total monthly income.................... 2,906
Expenses (including HP & secured debts). 2,086.5
Available for debt repayments........... 819.5
Monthly UNsecured debt repayments....... 471
Amount left after debt repayments....... 348.5
Personal Balance Sheet Summary
Total assets (things you own)........... 134,300
Total HP & Secured debt................. -100,000
Total Unsecured debt.................... -11,407
Net Assets.............................. 22,893
Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.
That a side, we are looking at the best way to get rid of our debt by 2020 as we are wanting to look for a new house once our fixed term is up on our current mortgage. We both have reasonably well paid jobs but always end up skint with a week or so to go before the end of the month.
A large portion of this is on loans around £350 per month and then also nursery @ £399.50 per month.
We are currently going down the route of not spending then at the end of the month whatever we have left over gets paid off the debt, its frustrating that 2 people in work with decent jobs struggle like this and people getting houses paid for and free childcare when they are not working (something wrong with that), anyway rant over. What do you guys suggest, im not too savvy with money I just tend to try and live within my means and haven't had a great deal of debt but I was looking at the best way to relieve the pressure monthly so that we have a bit more in the bank in case of emergency etc, one option would be to take out a 10k loan which would be over 5 years and if we get the rate that we have been approved for 3.3% it would clear our debt and it would be around £180 per month, (significantly less than we pay at the moment) or we can carry on as we are and our debt will be clear by 2020 but it will be a bit more of a struggle.
Would love to just sell one of the cars but we have a 14 month old baby and the other half works for the NHS and they are not flexible so she has her car to get to work and i drop the little one off at nursery, she doesn't finish until late usually around 8:30 pm so i cant even pick her up as the baby goes down at around 7pm.
P.S im terrible at putting thoughts in to writing so apologies in advance, hope this makes sense. Just looking for advice really based in peoples experience wether we are better of paying off asap or struggling for a bit and paying it sooner.
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1476
Partners monthly income after tax....... 1350
Benefits................................ 80
Other income............................ 0
Total monthly income.................... 2906
Monthly Expense Details
Mortgage................................ 323
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 15
Council tax............................. 120
Electricity............................. 42
Gas..................................... 43
Oil..................................... 5
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 100
TV Licence.............................. 12
Satellite/Cable TV...................... 24
Internet Services....................... 21
Groceries etc. ......................... 200
Clothing................................ 100
Petrol/diesel........................... 110
Road tax................................ 13
Car Insurance........................... 100
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 399.5
Other child related expenses............ 80
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 7
Contents insurance...................... 7
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 200
Total monthly expenses.................. 2086.5
Assets
Cash.................................... 1000
House value (Gross)..................... 125000
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 300
Total Assets............................ 134300
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 100000...(323)......2.8
Total secured & HP debts...... 100000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................876.......30........29.9
Virgin Credit card.............1014......25........NaN
Oak Furniture land.............717.......11........9.9
Lloyds Loan....................4200......205.......NaN
Hitachi Loan...................4250......150.......NaN
Argos..........................350.......50........0
Total unsecured debts..........11407.....471.......-
Monthly Budget Summary
Total monthly income.................... 2,906
Expenses (including HP & secured debts). 2,086.5
Available for debt repayments........... 819.5
Monthly UNsecured debt repayments....... 471
Amount left after debt repayments....... 348.5
Personal Balance Sheet Summary
Total assets (things you own)........... 134,300
Total HP & Secured debt................. -100,000
Total Unsecured debt.................... -11,407
Net Assets.............................. 22,893
Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.
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Comments
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Hi, [STRIKE]in an ideal world you also want to be putting money aside every month for an Emergency Fund. An EF is always used as something will always crop up and it's good for it to be budgeted, as it stops the spending on cards or loans
[/STRIKE]Edited as I missed the EF budgeted money...
You appear to have a nice chunk of money available every month for debt repaymentsI work within the voluntary sector, supporting vulnerable people to rebuild their lives.
I love my job
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Im not sure that true, it doesn't consider unsecured debt when working out how much is leftover after bills for some reason.
We generally end up having around £300/400 a month left over once everything's been paid. that is paying fairly low amounts of the credit cards as well. Were trying to decide wether its worth taking out 1 loan to clear it all and combine it in to one payment or continue paying and try to make over payments. If we do the loan it means when we look to buy our next house then we will have that loan when we go for another mortgage where as if we skint ourselves we can clear it in a shorter term but wouldnt have much of a life outside of work. theres always things popping up aswell such as work events, christmas partys, unexpected issues around the house/cars etc so this form is good for a qucik look but in reality i dont think many people can stick to the outgoings on that form0 -
Start a spending dairy straight away. If your SOA says you have £348/month left over - but you don't - then you're either frittering it away on something or there's something missing from the SOA.
I was frittering £600/month on take aways and going to the pub up until about a year ago, spending dairy and the subsequent boot up the backside I had to give myself was enough to get things sorted within a year.
£100/month for mobiles is excessive
£100/month for car insurance looks a little high
Could you get a 0% money transfer card to wipe out the higher interest debts?
On your SOA some of the percentages are showing as NaN (Not a Number), I think you may have entered them incorrectly on the SOA input page.
Best wishesYou can have results or excuses, but not both.Challenge - be 14 Stone BY XMAS!
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Also, I would say that as you are trying to clear debt in the most effective way possible, by 2020, I don't think taking a 5 year consolidation loan would be the best way to do this. Have you addressed the reasons why you are in the current situation? Were you overspending and have now stopped? Freeing up more cash if you haven't learned to be financially savvy won't ever end well.
Look at "Snowballing" either paying the debts by smallest balance first then focus on the next biggest one, or the method I prefer - paying the highest interest debts first. You can have results or excuses, but not both.Challenge - be 14 Stone BY XMAS!
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I definitely would not recommend getting a loan. There are too many instances when good people on this forum have gone for consolidation without addressing the fundamental flaws in their budgeting and money management. It often leads to a doubling of the debt.We generally end up having around £300/400 a month left over once everything's been paid. that is paying fairly low amounts of the credit cards as well. Were trying to decide wether its worth taking out 1 loan to clear it all and combine it in to one payment or continue paying and try to make over payments.
Definitely agree with this. You need to find where your money is going so that you set your monthly budget and repayments with confidence.Start a spending dairy straight away. If your SOA says you have £348/month left over - but you don't - then you're either frittering it away on something or there's something missing from the SOA.
Agree with this too!! Paying off the debts with the highest APR first is definitely the MSE way.Look at "Snowballing" either paying the debts by smallest balance first then focus on the next biggest one, or the method I prefer - paying the highest interest debts first.:) I work within the voluntary sector, supporting vulnerable people to rebuild their lives.
I love my job0 -
Mobile and car insurances look very high. Do you shop around? MSE suggest no more than £10 per month on mobiles. That can cut £80 already! I would suggest paying off the debt that charges the most interest first i.e. Barclaycard and it looks like you keep taking out loans. Do you need new stuff or can you make do until 2020? There is no one to stop you taking out loans if it looks like your income can cover it and I personally feel that it is far too easy to get into debt. Perhaps you should stop using your credit card (if you are still doing so) and live within your means. Don’t go out on work dos as you have no control over how much you spend especially when bills are shared. Good luck!0
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I've had a look - I think you could easily put £300 towards your debts if you wanted.
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1476
Partners monthly income after tax....... 1350
Benefits................................ 80
Other income............................ 0
Total monthly income.................... 2906
Monthly Expense Details
Mortgage................................ 323
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 15
Council tax............................. 120
Electricity............................. 42
Gas..................................... 43
These seem a little high to me
Oil..................................... 5
What's this for if you have gas and elec?
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 100
This is crazy money for a phone - get rid
TV Licence.............................. 12
Satellite/Cable TV...................... 24
Internet Services....................... 21
Groceries etc. ......................... 200
Clothing................................ 100
Really - £100 per month on clothing? this could be £100 per year if you really wanted.
Petrol/diesel........................... 110
Road tax................................ 13
Car Insurance........................... 100
You are paying £1200 for insurance - is this for two cars? If not, what kind of car do you have? Still for two cars it's still quite expensive - again depending on what cars you have of course.
Car maintenance (including MOT)......... 20
Really - are they on PCP? If not, I budget about £75 a month for repairs, service, MOT, tax and insurance.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 399.5
Other child related expenses............ 80
What's this?
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 7
Contents insurance...................... 7
This seems low - check you have the right cover
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 200
That's a lot to put into an emergency fund - you could divert some of this to your debts
Total monthly expenses.................. 2086.5
Assets
Cash.................................... 1000
House value (Gross)..................... 125000
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 300
Total Assets............................ 134300
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 100000...(323)......2.8
Total secured & HP debts...... 100000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................876.......30........29.9
Virgin Credit card.............1014......25........NaN
Oak Furniture land.............717.......11........9.9
Lloyds Loan....................4200......205.......NaN
Hitachi Loan...................4250......150.......NaN
Argos..........................350.......50........0
Total unsecured debts..........11407.....471.......-
Monthly Budget Summary
Total monthly income.................... 2,906
Expenses (including HP & secured debts). 2,086.5
Available for debt repayments........... 819.5
Monthly UNsecured debt repayments....... 471
Amount left after debt repayments....... 348.5
Personal Balance Sheet Summary
Total assets (things you own)........... 134,300
Total HP & Secured debt................. -100,000
Total Unsecured debt.................... -11,407
Net Assets.............................. 22,893
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.0 -
Very much agree with what has been said so far.
At the moment, I'm trying out having a weekly 'everything spendy' payment in to a separate account from bills to eke (sp?) Out my money for the month.... So it's for food, entertainment, clothing, haircuts, etc.... See if it will help...0 -
Lots of good advice. I would get your emergency fund to £1000 then I'd hit the debt hard using the snowball method. Please don't borrow anything else. I know you see an end date of 2020 but if you work it, you'll be done quicker, I promise. Cut the clothing budget and be clever with your entertainment. You can do it!
I literally just offered this advice to someone else but it never seems v popular :rotfl: can you sell the cars and get something really crappy while you pay off the debt?April 2016 Mortgage- £160,000.00 :eek:
October 2017 Mortgage- £138,322.06 :beer:
October 2018 Mortgage- £131,898.31 :j
October 2020 Mortgage- £103,084.00
July 2022 Mortgage- £820000 -
I agree with alot of whats been said here, especially the whole sell the cars and drive something crappy. Im up for this but the other half isnt.
I would just like to point out that the car insurance, mobile phones, clothing figures i have put down are for 2 people. I've put the wage in as both mine and my partners so ive done the same with the outgoings.
Anyway, we have formed a plan and decided to stick with our emergency fund at 1k.
We have cut up our credit cards and Argos card. The Argos card is now cleared and that will ease the monthly pressure as we were just constantly buying on it then paying it off over a few months on things we didn't really need.
Credit cards still have a long interest free period on them so these can be paid off in full with monthly payments of £45 and where ever we have free cash we can pay of extra.
After i posted this i really got my self in to a place where i wanted rid of debt so i sat down with the missus and went through everything and looked at where we could cut down, the fact we pay each month for xmas vouchers means xmas time is always sorted and we dont have to worry so hopefully we can now go in to the new year in a much better financial state
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