Single, six kids and going to be debt free!

Mumoffourkids · 15 December 2017 at 10:12PM

Okay, so I finally decided to face up to my debts and now my income is pretty much stable, I can now budget and work out how much to pay. My soa is below and I believe I have budgeted for everything. I know I have a big surplus but this is only recent and from the new year I want to start paying everything off.

I know that if I threw everything at the debts that I could be debt free a lot sooner but I can't expect the kids to live like that really.

So I calculated that if I pay £500 off my debts each month, then I will be debt free in 44 months, so three years and 8 months. However, as my old debts are not currently being paid, I plan on offering them minimal payments at the moment and then save up to offer them full and final settlements so hopefully I can be debt free sooner.

Next is to find some challenges to join!

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 6
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 900
Partners monthly income after tax....... 0
Benefits................................ 3527.64
Other income............................ 975
Total monthly income.................... 5402.64

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1200
Management charge (leasehold property).. 0
Council tax............................. 93
Electricity............................. 120
Gas..................................... 10
Oil..................................... 0
Water rates............................. 63.54
Telephone (land line)................... 10
Mobile phone............................ 51.81
TV Licence.............................. 12.37
Satellite/Cable TV...................... 39.98
Internet Services....................... 10
Groceries etc. ......................... 433.33
Clothing................................ 100
Petrol/diesel........................... 260
Road tax................................ 25.83
Car Insurance........................... 120
Car maintenance (including MOT)......... 100
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 1000
Other child related expenses............ 140
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 7.27
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 150
Haircuts................................ 0
Entertainment........................... 303.33
Holiday................................. 50
Emergency fund.......................... 0
Total monthly expenses.................. 4310.46

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly.. .APR
Overdraft......................1000......30....... .0
Catalogue......................247.......60....... .0
Catalogue......................593.......35....... .0
Old debts......................20000.....0.........0
Tax credits....................410.......0.........0
Total unsecured debts..........22250.....125.......-

Monthly Budget Summary
Total monthly income.................... 5,402.64
Expenses (including HP & secured debts). 4,310.46
Available for debt repayments........... 1,092.18
Monthly UNsecured debt repayments....... 125
Amount left after debt repayments....... 967.18

Personal Balance Sheet Summary
Total assets (things you own)........... 500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -22,250
Net Assets.............................. -21,750

Florence_J · 15 December 2017 at 10:35PM

Hello, welcome to MSE, and well done for starting a debt free diary.

It sounds like you can make good progress, I might suggest putting some money aside for an emergency fund, in the case that if some unexpected cost comes up you won't have to use debt to pay for it.

As far as I can see all your bills seem reasonable for a larger household, but then I live in a two person household so there might be others on here who are wiser.

Take care.

Honeysucklelou2 · 16 December 2017 at 7:46AM

Well done on your grocery budget...I have 7 children that live at home with me and I struggle to get it lower than £500 a month.

Good luck with the debt busting.

Mumoffourkids · 16 December 2017 at 8:04AM

Thanks honeysuckle, it is hard but I went through a patch wherein had no money and ended up at food banks, so had to budget. That figure includes nappies for my youngest two, cleaning products, and packed lunches for four of the kids. I have a budget of £100 per week which I am normally ok with.

Thanks Florence, having an e!regency fund sounds like a good idea, although one of the first debts to tackle is my overdraft so that would be an emergency fund in the meantime but I know what you mean about not using debt in an emergency.

So plan for today is to find out who is currently chasing for !y older debts and then write them letters to say I am currently getting sorted and I will be in contact to arrange a payment plan.

Jojo1492 · 16 December 2017 at 11:34AM

I think it is brilliant you are working too! As you say, as your children get older it's better to already have a job than to have to start looking. Overdrafts are quite expensive so good to tackle that. Setting up a separate savings account for presents could help with the December birthdays and Christmas. The interest won't be much but once that is out of the way you will know it's there. Good luck!

Mumoffourkids · 16 December 2017 at 11:38AM

Thanks JoJo. My job is very flexible and fits around the kids mostly so I am lucky. I am an accountant so if I found time, I could do extra work from home, but to be honest with six kids, it is hard finding the time. I need a plan and hopefully I will be able to clear my old debts relatively quickly!

Mumoffourkids · 16 December 2017 at 9:05PM

Ok so today I did the online thing with payplan and then had a chat on the phone. They agreed with me that the best way forward is a DMP and they agreed my budget if slightly revised from the one above. I should be debt free in just over two years if everything stays the same but in theory my income or disposable income at least should go up. I think all I have to do now is set up a new bank account and then sort out a start date for my DMP. So it is all go go go on the debt busting front!

somethingcorporate · 16 December 2017 at 9:10PM

Bleeding heck, that is some serious cost control! We spend more on groceries than that on a family of 3. Have you kept a spending diary to make sure you arent undercalling it...?

We just jot it down on a calendar - one column for food for the house, one for eating out.

redofromstart · 16 December 2017 at 9:13PM

Just dropping in to say happy new diary and good luck with it. I'm impressed at your food spend too.

Mumoffourkids · 16 December 2017 at 9:19PM

Thanks and yes that is my correct food spend. I tend to do an online food shop at Asda on a Monday which is normally around £70 and the remaining £30 per week is spent in bread, milk, and fruit. Four of the kids have packed lunch out of that, but my youngest two eat at nursery three days a week which does help, although my son then sometimes eats at home as well!

I got into a habit of a budget of £100 per week when I had no money so now I have money, I still stick at the same amount. Eating out doesn't happen often and when it does, it comes out of entertainment budget!

System · 16 December 2017 at 10:39PM

Welcome to the forum, I like your ethic wanting to work , even if it seems that all your salary goes on child care , but not for to long. Good job on the DMP work, two years isn't that long to be debt free .

Good luck.

Single, six kids and going to be debt free!

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