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  • FIRST POST
    • skip30
    • By skip30 1st Aug 18, 12:20 PM
    • 3Posts
    • 0Thanks
    skip30
    40k in debt!
    • #1
    • 1st Aug 18, 12:20 PM
    40k in debt! 1st Aug 18 at 12:20 PM
    Over the last 7 years me and the wife have accumulated just shy of 40k in unsecured debt.

    Finally gave myself a slap in the face yesterday and have vowed to get this sorted as it's starting to affect our lives and I can see a snapping point approaching.

    I know for a fact this spending has come from living outside of our means so I've started a budget for the first time ever and I'm hoping that this will at least put the brakes on increasing our debt.

    I recently completed a form on Step Change and the recommendation was to start a DMP but I think I can tackle this myself without starting one. I don't like the idea of asking for help when I got myself into the this mess in the first place. I have 31 months remaining on my loan which is 500 a month. Once that is cleared I'll have extra $ to start snowballing the credit cards. What's everyones thoughts on this?

    Thanks in advance.

    [font=courier new]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................ 2205
    Partners monthly income after tax....... 500
    Benefits................................ 398
    Other income............................ 0
    Total monthly income.................... 3103


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 350
    Management charge (leasehold property).. 0
    Council tax............................. 114
    Electricity............................. 40
    Gas..................................... 35
    Oil..................................... 0
    Water rates............................. 56
    Telephone (land line)................... 0
    Mobile phone............................ 61
    TV Licence.............................. 10
    Satellite/Cable TV...................... 0
    Internet Services....................... 30
    Groceries etc. ......................... 400
    Clothing................................ 30
    Petrol/diesel........................... 200
    Road tax................................ 21
    Car Insurance........................... 34
    Car maintenance (including MOT)......... 30
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 30
    Life assurance ......................... 41
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 10
    Entertainment........................... 40
    Holiday................................. 0
    Emergency fund.......................... 30
    Total monthly expenses.................. 1612



    Assets

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


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Lloyds Loan....................13097.....500.......13.9
    Barclaycard CC.................9818......246.......0
    Virgin CC......................7211......72........0
    Lloyds CC......................4126......96........0
    MBNA CC........................4974......95........0
    Total unsecured debts..........39226.....1009......-



    Monthly Budget Summary

    Total monthly income.................... 3,103
    Expenses (including HP & secured debts). 1,612
    Available for debt repayments........... 1,491
    Monthly UNsecured debt repayments....... 1,009
    Amount left after debt repayments....... 482


    Personal Balance Sheet Summary
    Total assets (things you own)........... 4,000
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -39,226
    Net Assets.............................. -35,226
Page 1
    • Mnd
    • By Mnd 1st Aug 18, 12:29 PM
    • 630 Posts
    • 733 Thanks
    Mnd
    • #2
    • 1st Aug 18, 12:29 PM
    • #2
    • 1st Aug 18, 12:29 PM
    Hi, first point without reading all you SOA.

    If you are married and a basic rate tax payer, your wife can gift you some of her income tax allowance. Thi's is worth about 200 a year..BUT it can be backdated. .something to get on with while you wait for further suggestions
    • Mnd
    • By Mnd 1st Aug 18, 12:34 PM
    • 630 Posts
    • 733 Thanks
    Mnd
    • #3
    • 1st Aug 18, 12:34 PM
    • #3
    • 1st Aug 18, 12:34 PM
    Further thoughts
    Mobiles. Go sim only or payg .we pay 17.50 for 2
    Groceries. .you could save 100 here..meal plan, batch cooking, use what you've got
    TV licence is a little bit more than what you eat got here..12.39 I think
    • skip30
    • By skip30 1st Aug 18, 12:41 PM
    • 3 Posts
    • 0 Thanks
    skip30
    • #4
    • 1st Aug 18, 12:41 PM
    • #4
    • 1st Aug 18, 12:41 PM
    Thanks. I've done the marriage tax allowance.
    I pay the TV license quarterly so I just rounded it up monthly.

    I'll try the batch cooking thought thanks!
  • National Debtline
    • #5
    • 1st Aug 18, 12:43 PM
    • #5
    • 1st Aug 18, 12:43 PM
    Hi skip30 and welcome to the forum


    From your SOA it looks like your debts are affordable, but some outgoings look very low for a family of your size. Your rent is particularly low, do you receive housing benefit? Or is the accommodation tied to your employment? Haircuts and entertainment are also not much.


    If you can afford your debts you don't need to enter into a debt option like a DMP, but I would be cautious about making your outgoings too low. They need to be realistic figures that you can stick to in the long term.


    Best wishes


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • skip30
    • By skip30 1st Aug 18, 3:15 PM
    • 3 Posts
    • 0 Thanks
    skip30
    • #6
    • 1st Aug 18, 3:15 PM
    • #6
    • 1st Aug 18, 3:15 PM
    My house is tied to my employment so I'm lucky in that sense. My contract doesn't end for another 10 years so I don't have that worry.

    My sister is also a hairdresser so thats a perk.
    We don't really do much in the fear of adding to our debt but I'll take your advice and factor some into our budget.

    I've only really come here to get a second opinion as it can feel like we're up to our neck in it sometimes!
    • madvicker
    • By madvicker 1st Aug 18, 3:58 PM
    • 116 Posts
    • 77 Thanks
    madvicker
    • #7
    • 1st Aug 18, 3:58 PM
    • #7
    • 1st Aug 18, 3:58 PM
    Water rates seem high. You have 3 kids, but my wife and I together pay 13 a month (and she loves a bath). Nothing else among your expenditure seems too high (mobile cost you could trim)

    As for your debts: If your credit cards are all at 0% interest I would set those payments to the minimum.
    But not a minimum set by the bank, look at what the minimum payment is. For example it could be 87.65. In this example, set your payment to be 90 and leave it. Then with the remaining cash start overpaying your loan. As the 0% periods begin to expire, direct those overpayments to the credit cards in order of interest. Check out whatthecost.com snowballing for a payment plan you could follow.
    • Smellyonion
    • By Smellyonion 6th Aug 18, 2:17 PM
    • 95 Posts
    • 55 Thanks
    Smellyonion
    • #8
    • 6th Aug 18, 2:17 PM
    • #8
    • 6th Aug 18, 2:17 PM
    Contents insurance seems high.


    Where did the money from your loans go?
    • Suseka97
    • By Suseka97 7th Aug 18, 1:06 PM
    • 368 Posts
    • 467 Thanks
    Suseka97
    • #9
    • 7th Aug 18, 1:06 PM
    • #9
    • 7th Aug 18, 1:06 PM
    Even with shaving off a few s here and there on certain expenses, I'm not convinced your budget covers all your likely outgoings - not with 3 children, assuming they are all dependant on you and your spouse.

    When does the interest start to kick in on the credit cards? If it's in the near future you won't have much time to get that interest charging loan out of the way and once the CCs start pilling on the interest, your overall debt will obviously increase.

    As it stands, if you were to set up a DMP and pay 1,009 a month and all debts remained fixed at their current level you'd be debt-free in a over 3 years. But of course there are consequences with regards to your credit file, but only for 6 years post defaults - so not life altering in your case.

    What you might want to do is sit down and work out the maths - get hold of a 'snowballing' calculator and plug the numbers in - see what it tells you in terms of do-ability and timescales and then you have something to compare against.
    LBM Apr13: 14 Creditors / 85k+ owed / 11k outstanding (all currently UE)
    • Willing2Learn
    • By Willing2Learn 7th Aug 18, 2:08 PM
    • 738 Posts
    • 580 Thanks
    Willing2Learn
    http://www.stoozing.com/calculator/snowball-calculator.php
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • ViolaLass
    • By ViolaLass 7th Aug 18, 2:10 PM
    • 5,421 Posts
    • 7,477 Thanks
    ViolaLass
    Do you actually have 482 left each month?

    And where is your emergency fund? You have money going into it each month but no cash in the bank...
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