£67,031.92. Seriously. £67,031.92. That is a SCARY number. I can't believe our debt has peaked (and it is the peak, I am determined) at this level.

Our light bulb moment actually happened a few months back, but it's taken since then of wrangling utilities and carefully watching out income/outgoings (using You Need a Budget) to really figure out where we were overspending and how the monthly shortfall of anything from £200-£1,000+ was happening.

We have literally nothing to show for this debt, it's just crept up over the past 8 years or so, and has always been at manageable levels, but back in October we realised we were spending more on credit cards each month than we were paying off.

We committed that cardinal sin of taking out a consolidation loan, but alongside it we looked really carefully at our spending over the next couple of months, budgeted realistically for what we spend and have (I think) picked off all the easy 'low hanging fruit' of budget cuts and really identified why we were overspending.

The main reason for the debt is, erm, me. Not that I'm the biggest spender (neither of us are amazing), but because I am self employed with a hugely variable income and basically worked out our budgets on the basis I would always earn my 'best' month's income. Which was, with hindsight, maybe a TINY bit deluded.

The aim of this diary is to keep us on track with actually reducing our debt every single month, not doing it in a three steps forward, two (or four) steps back sort of way. Having sat down and put our numbers into the whatsthecost site, it appears that we are looking at 7 years and 1 month of repayments to clear the debt (and that's assuming we can get rid of the shortfall showing below). I REALLY want to reduce this term as that just seems bonkers.

SOA below, with a couple of explanatory notes.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 250 (variable, but this is the minimum I have earned in any month in the last 5 years)
Partners monthly income after tax....... 2711.86
Benefits................................ 192
Other income............................ 0
Total monthly income.................... 3153.86

Monthly Expense Details
Mortgage................................ 698
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 174 (including overpayment for a period when we messed up during a house move 18 months ago and didn't restart the direct debit for the new property. Will drop by a little under £50 after either March or April, can't remember which)
Electricity............................. 52 (gas and electricity are one combined DD, I haven't checked the exact split but the total is £104)
Gas..................................... 52
Oil..................................... 0
Water rates............................. 104 (also including a debt from previous property, but I think this will be included for another 6 months or so. I'm not sure what our actual usage is)
Telephone (land line)................... 18.5 (includes internet)
Mobile phone............................ 85 (£45 for my contract, which I use for work as well, £40 for DH)
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 0 (included in landline cost)
Groceries etc. ......................... 520 (Includes £40 for one lot of school lunches. I am REALLY struggling to reduce this, but feel I could and should be able to!)
Clothing................................ 100 (growing children, plus see notes below re clothes)
Petrol/diesel........................... 225 (90% DH commuting costs)
Road tax................................ 16.27
Car Insurance........................... 25.22
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 70 (this will disappear in April as child 3 gets free 15 hours)
Other child related expenses............ 81.85 (music/swimming lessons x2, cubs and beavers, National Trust membership as they love visiting them)
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 27.07
Contents insurance...................... 0
Life assurance ......................... 16.26
Other insurance......................... 0
Presents (birthday, christmas etc)...... 90
Haircuts................................ 20
Entertainment........................... 135
Holiday................................. 75
Emergency fund.......................... 25
Total monthly expenses.................. 2707.29


Assets
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 800
Other assets............................ 0
Total Assets............................ 210800


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 173733...(698)......3.14
Total secured & HP debts...... 173733....-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
Barclaycard....................6880.21...156...... .0
MBNA...........................9614.71...98....... .0
Parental loan..................20000.....0.........0 (see notes below)
Tesco loan.....................21000.....377.......10
Total unsecured debts..........57494.92..631.......-


Monthly Budget Summary
Total monthly income.................... 3,153.86
Expenses (including HP & secured debts). 2,707.29
Available for debt repayments........... 446.57
Monthly UNsecured debt repayments....... 631
Amount short for making debt repayments. -184.43

Personal Balance Sheet Summary
Total assets (things you own)........... 210,800
Total HP & Secured debt................. -173,733
Total Unsecured debt.................... -57,494.92
Net Assets.............................. -20,427.92

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

Regarding the (relatively) high clothes expense, it is a combination of 3 growing children (8, 6 and 3), plus the fact that my job is in the fashion industry, and as a self employed person I need to have the right sort of 'look' in order to get work (think along the lines of a self employed personal shopper - people need to see you looking good in order to book with you).

The parental loan was for a house deposit. The parent in question has no idea about our debts. She is not desperate for the money back and isn't charging us interest, but has asked us to save £150-200 every month into a savings account and then once we've saved a decent sum to either repay them or 'reborrow' it for work on the house (basically they want us to be able to make repayments if they suddenly need the extra income, but meanwhile are happy for us to benefit from it. I am not saving the money while our debt payments are so high - we are hoping to have paid enough off that if the parent ever needs it that we can reborrow it and pay them back). This isn't great, but realistically I think the best solutions is to treat it as the lowest priority for snowballing - once we have paid back the other debts we will throw the entire £630+ at this debt.

So, there is a freaking enormous shortfall every month, which is somewhat depressing. Most months it is covered by the fact that I earn more than my 'bare minimum', but it is those months where it isn't covered that the debt creeps up again, and I am a total disaster for going 'oh well, we've spent on the credit card, we might as well keep going' and buying more clothes or something for the house - this is probably a significant proportion of our debt problem.

We have managed to get rid of the balance on the one credit card we were spending on, so the remaining ones are both on 0% deals (although one expires in September). I have not cut up the remaining credit card, because we don't have an emergency fund in case of eg boiler repairs, but it has not been used for all of a month, and I hope to keep it that way.

A DMP or similar isn't really on my horizon right now - I feel like we should be able to make the cuts to make our budgets balance, and I am optimistic that as my income goes up (when I can work more as child 3 starts school) that we will be able to make overpayments.

My plan for now is:
1) Try to wiggle those budget numbers around enough that we don't have a shortfall any more.
2) Make a plan for any months where I make extra - do I use it for an emergency fund, as a fund to cover future months' shortfalls, to throw money at the debt to try to reduce minimum payments in case of future 'shortfall' months?
3) Try to make more money. Not quite sure how this will work as I am largely limited to working around DH's working hours (I work evenings and weekends and the 5hrs childcare per week we are paying for for child 3).

Now that's all down in black and white I am feeling a combination of relieved (to be clear on the numbers) and immensely stressed (by the semi-regular £180+ shortfall).

Onwards and downwards (for the debt, not me)!

edited to add: the original £67,031.92 figure was based on the total figure for the Tesco loan, which included all interest payable over the entire term of the loan. I have updated the debt figure in my signature and in all posts going forward as at 4th June 2017 to reflect that actual current debt balance rather than the balance plus interest over the lifetime of the loan. This has knocked £7,911.62 off the debt figure, but means that each monthly payment will have the interest for that month deducted from it, so it won't affect the DFD if I don't make overpayments.