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    • charliedavis
    • By charliedavis 5th Nov 18, 11:55 AM
    • 400Posts
    • 970Thanks
    charliedavis
    -99,152 net worth - scary figure
    • #1
    • 5th Nov 18, 11:55 AM
    -99,152 net worth - scary figure 5th Nov 18 at 11:55 AM
    Unbelievably, this huge amount of debt has been incurred solely in the last 3 years.

    It was even higher, but I've been working with a debt counsellor and we've managed to reduce it down by around 5,000 in the last 30 days.

    As you can see from the SOA later on, the debt is being paid - just about. There's even room for some over payments.

    However as we are both self employed - the income is as of today. It is finely balanced and we can both have a bad month, meaning this budget gets knocked and we have ended up using credit.

    With no savings, this has meant we have tended to use credit haphazardly and irresponsibly.

    I am determined to get this paid off hence this diary, and really hoping for your support!

    As you can see, we are renting which is really expensive, and we want to buy a house eventually.

    We have nothing to show for the amount we have spent, except some great holiday photos.

    Yes I inherited this method of overspending from my parents, as did my OH - but I want this pattern to stop now before I pass it on my kids too.

    I'll add this first post now then continue to add more thoughts.
    Last edited by charliedavis; 21-11-2018 at 6:37 PM. Reason: SOA removed as superceded by later one
    -99,152 net worth - scary figure - my diary out of debt!
    Total debt currently stands at 78,812.91
    Get out of debt 2019 #39 - target 26,429 - current = 2395 3-6 month EF challenge #10 - currently at 1,421/10,500
Page 1
    • charliedavis
    • By charliedavis 5th Nov 18, 11:57 AM
    • 400 Posts
    • 970 Thanks
    charliedavis
    • #2
    • 5th Nov 18, 11:57 AM
    • #2
    • 5th Nov 18, 11:57 AM
    Cars:
    OH needs a decent car for work and 100% is accounted for via the business as he is self employed, so the HP is for a 2 year lease that will then be swapped for a different vehicle in 2 years time. His petrol is not accounted for above as his business pays for it.

    My car - I did have a lease car a few months back but swapped it for an 4 year old Astra a few months back to cut down on monthly overheads.
    • charliedavis
    • By charliedavis 5th Nov 18, 12:01 PM
    • 400 Posts
    • 970 Thanks
    charliedavis
    • #3
    • 5th Nov 18, 12:01 PM
    • #3
    • 5th Nov 18, 12:01 PM
    Loans:
    Zopa was for paying off our self assessment.
    Part of the reason the debt was accrued is because my business had a couple of amazing years and then I had to take time off due to ill-health (stress related) - meaning we ending up living on the savings I had made to pay the tax.
    Sainsburys was for credit consolidation
    • charliedavis
    • By charliedavis 5th Nov 18, 12:03 PM
    • 400 Posts
    • 970 Thanks
    charliedavis
    • #4
    • 5th Nov 18, 12:03 PM
    • #4
    • 5th Nov 18, 12:03 PM
    Mobile phones:
    Reimbursed by our businesses - I know it looks expensive :-)
    • k3lvc
    • By k3lvc 5th Nov 18, 12:04 PM
    • 2,698 Posts
    • 4,437 Thanks
    k3lvc
    • #5
    • 5th Nov 18, 12:04 PM
    • #5
    • 5th Nov 18, 12:04 PM
    2,850 rent for a couple - halving that would do more for you than any other small changes
    • charliedavis
    • By charliedavis 5th Nov 18, 12:09 PM
    • 400 Posts
    • 970 Thanks
    charliedavis
    • #6
    • 5th Nov 18, 12:09 PM
    • #6
    • 5th Nov 18, 12:09 PM
    Areas I can definitely see I can save:
    Groceries, 150 per week is a saving from the 220 per week I used to spend at Ocado, but the past few weeks we have been closer to 100/120 in Tesco, and now aiming to get that to 80 per week in Aldi. This will save 70 x 4 = 280 per month
    Entertainment - will cut that right down to 30 per week saving another 280 per month.

    I've looked at a snowball debt calculator and overpaying by 800 per month will get us out of debt in 57 months.

    In an ideal situation I'd like to increase my business income back up again to be able to snowball an extra 2000 per month, which would get us of debt in just 24 months. The difference is HUGE - so it's something to work towards in my business - health permitting. Pushing really hard last time is what made me ill so I do need to be careful
    • charliedavis
    • By charliedavis 5th Nov 18, 12:12 PM
    • 400 Posts
    • 970 Thanks
    charliedavis
    • #7
    • 5th Nov 18, 12:12 PM
    • #7
    • 5th Nov 18, 12:12 PM
    2,850 rent for a couple - halving that would do more for you than any other small changes
    Originally posted by k3lvc
    Totally agree - we are in a fixed tenancy agreement until August when we will be moving to a far cheaper house. There are 4 of us though, we aren't just a couple :-) I do have an older son too who often visits.

    I do run events from my house so do claim quite a bit of it back, around 700 per month is claimed back via the business.

    I have asked to be released early from our tenancy - they agreed but the fees plus the fact we'd have to make up the shortfall made it impossible to do so ...
    -99,152 net worth - scary figure - my diary out of debt!
    Total debt currently stands at 78,812.91
    Get out of debt 2019 #39 - target 26,429 - current = 2395 3-6 month EF challenge #10 - currently at 1,421/10,500
    • charliedavis
    • By charliedavis 5th Nov 18, 12:19 PM
    • 400 Posts
    • 970 Thanks
    charliedavis
    • #8
    • 5th Nov 18, 12:19 PM
    • #8
    • 5th Nov 18, 12:19 PM
    Concentrating on paying the high MBNA CC off first, been chucking everything I can off it at the moment.

    Confused about the fact it means I have no cash savings/emergency fund though - would love thoughts on what I should be doing here to prevent relying on a CC in case of emergency?
    -99,152 net worth - scary figure - my diary out of debt!
    Total debt currently stands at 78,812.91
    Get out of debt 2019 #39 - target 26,429 - current = 2395 3-6 month EF challenge #10 - currently at 1,421/10,500
    • natlie
    • By natlie 5th Nov 18, 1:40 PM
    • 1,260 Posts
    • 5,642 Thanks
    natlie
    • #9
    • 5th Nov 18, 1:40 PM
    • #9
    • 5th Nov 18, 1:40 PM
    Totally agree - we are in a fixed tenancy agreement until August when we will be moving to a far cheaper house. There are 4 of us though, we aren't just a couple :-) I do have an older son too who often visits.

    I do run events from my house so do claim quite a bit of it back, around 700 per month is claimed back via the business.

    I have asked to be released early from our tenancy - they agreed but the fees plus the fact we'd have to make up the shortfall made it impossible to do so ...
    Originally posted by charliedavis
    Hi Do you live in a very expensive area? I live in the middle of a capital city family of 5 in a 4 bed house and we pay 900 a month for rent - so this does seem really high, I hope you can find somewhere more affordable
    Debt: 33,400 32,173 31,974
    • ImpulseSpender
    • By ImpulseSpender 5th Nov 18, 2:00 PM
    • 150 Posts
    • 388 Thanks
    ImpulseSpender
    Hi,

    Just want to say welcome. Looking at your SOA, it looks like there are definitely some areas you can cut which is good. Good luck on your journey
    FD CC - 258.78/258.78, Santander CC - 507/3883.17, MBNA CC - 760/3144.96, Savings - 400/5000
    • charliedavis
    • By charliedavis 5th Nov 18, 2:49 PM
    • 400 Posts
    • 970 Thanks
    charliedavis
    Hi Do you live in a very expensive area? I live in the middle of a capital city family of 5 in a 4 bed house and we pay 900 a month for rent - so this does seem really high, I hope you can find somewhere more affordable
    Originally posted by natlie
    I think we could easily move to a rented house half the price for sure, that's the plan in August when the tenancy ends. I do have an office here, which I was paying 550 per month for before, that's partly how we justified moving here.

    When I was steadily taking out 150k a year from my business it didn't seem like an issue. I'm definitely guilty of being far too optimistic that my business and health could sustain it indefinitely. I feel quite sick about the money I've wasted these last few years for sure.
    -99,152 net worth - scary figure - my diary out of debt!
    Total debt currently stands at 78,812.91
    Get out of debt 2019 #39 - target 26,429 - current = 2395 3-6 month EF challenge #10 - currently at 1,421/10,500
    • charliedavis
    • By charliedavis 5th Nov 18, 2:50 PM
    • 400 Posts
    • 970 Thanks
    charliedavis
    Hi,

    Just want to say welcome. Looking at your SOA, it looks like there are definitely some areas you can cut which is good. Good luck on your journey
    Originally posted by ImpulseSpender
    Thanks! So badly want to get that number down fast but I know that slow and steady will win the race here
    -99,152 net worth - scary figure - my diary out of debt!
    Total debt currently stands at 78,812.91
    Get out of debt 2019 #39 - target 26,429 - current = 2395 3-6 month EF challenge #10 - currently at 1,421/10,500
    • charliedavis
    • By charliedavis 6th Nov 18, 9:25 AM
    • 400 Posts
    • 970 Thanks
    charliedavis
    First NSD yesterday - this was a big achievement. Feeling super motivated

    Other major changes:
    Teenager took a packed lunch rather than the 4 per day we used to give him. He actually enjoyed it - yay!
    Cooked a syrup pudding and ate for pudding yesterday
    Didn’t drink any wine - worked out 3.5 bottles per week is costing us around 24 per week so that’s a big saving
    Been reading lots of other diaries -loving how many there are to read through

    To do today:
    Update OH invoices
    Small shop - toad in the hole this evening and need dishwasher salt and some squash. Aim to keep the shop below 10
    Talk to DS’ driving instructor about the cheapest way to book lessons - I suspect it will be block booking 10 or so at a time
    OH will be cooking rolls this evening
    -99,152 net worth - scary figure - my diary out of debt!
    Total debt currently stands at 78,812.91
    Get out of debt 2019 #39 - target 26,429 - current = 2395 3-6 month EF challenge #10 - currently at 1,421/10,500
    • adg89
    • By adg89 6th Nov 18, 9:39 AM
    • 78 Posts
    • 136 Thanks
    adg89
    Hi charliedavis
    Been catching up on your diary - regarding DS' driving - do you pay for all his lessons or is the first block you are looking at paying for?
    If it's the first, I would let him organise and find a driving instructor who is reputable among his social circle so you can ensure you are paying for someone who will be effective.


    Also, this is a solution to help you with your funds, but when I started to learn how to drive (and my siblings - my youngest sibling having just passed this year at 18), my parents only paid for the first block of lessons, first theory and first practical, with any extra being paid for by ourselves by part-time work. Would this be an option for you? Then you would have a fixed expenditure on DS' driving, but will also be helping him out to start, and also helping him to learn how to manage his own finances in terms of raising funds for the things he wants.


    You don't need to do this if you feel it isn't right for you, but it is another option for you.

    • charliedavis
    • By charliedavis 6th Nov 18, 9:53 AM
    • 400 Posts
    • 970 Thanks
    charliedavis
    Hi charliedavis
    Been catching up on your diary - regarding DS' driving - do you pay for all his lessons or is the first block you are looking at paying for?
    If it's the first, I would let him organise and find a driving instructor who is reputable among his social circle so you can ensure you are paying for someone who will be effective.


    Also, this is a solution to help you with your funds, but when I started to learn how to drive (and my siblings - my youngest sibling having just passed this year at 18), my parents only paid for the first block of lessons, first theory and first practical, with any extra being paid for by ourselves by part-time work. Would this be an option for you? Then you would have a fixed expenditure on DS' driving, but will also be helping him out to start, and also helping him to learn how to manage his own finances in terms of raising funds for the things he wants.


    You don't need to do this if you feel it isn't right for you, but it is another option for you.
    Originally posted by adg89

    He just turned 17 so paying to get him through is his joint birthday and Xmas pressie.

    Definitely want him to get a part time job to pay for his insurance though - showed him how to use indeed and helped him apply for a few on there so far. I do so badly want to teach him good financial lessons and have done a crap job these past few years. Sometimes I worry my crazy overspending will scar him for life :-(
    -99,152 net worth - scary figure - my diary out of debt!
    Total debt currently stands at 78,812.91
    Get out of debt 2019 #39 - target 26,429 - current = 2395 3-6 month EF challenge #10 - currently at 1,421/10,500
    • enthusiasticsaver
    • By enthusiasticsaver 6th Nov 18, 10:01 AM
    • 8,765 Posts
    • 20,361 Thanks
    enthusiasticsaver
    It looks like you base your spending on your best months income which is of course variable. You also make the common mistake of not putting money away in the good income earning months to cover the bad months.

    Firstly you need emergency savings to stop you relying on credit when you don't have enough income coming in so I don't think you should be throwing all available money towards repaying the debt or you will have a boom and bust situation. The best way to reduce debt is to live within budget and stop spending on credit cold turkey so get rid of the credit cards and definitely don't consolidate. Was the Zopa loan a consolidation? It makes your situation so much worse.

    Your rent is way way too high and consequently the council tax and presumably your utilities so presumably you have over guestimated your income and rented way above your financial capabilities. There are other areas for savings like groceries, entertainment, holidays, gifts, mobiles, cable tv, electricity and oil. They could all be halved for a family of your size. I am puzzled how you have such high HP but no assets for it to be secured on as presumably it is not the 6000 cars?


    While I think overpaying the debt is certainly a priority especially as you have fairly high interest rates being charged and presumably no option to move to 0% I think saving an emergency fund is every bit as important. I also don't think you are sending a particularly good lesson to your DS in paying for all his driving lessons when you obviously cannot afford it. We paid for the first block of lessons for our two daughters and then they paid their own by getting jobs to fit around school/university. Made them appreciate money and they learnt how to budget. They are now fiscally responsible adults with no debts apart from mortgages simply because we drummed into them that credit was not an option, living within a budget was crucial and saving for things was paramount. Learning to say no, I cannot afford that is the first lesson but it will be a good one for your DS to learn so he does not follow the same path.


    If I were you I would be tackling this by using the spare income to initially save 1000 emergency fund then direct it all to the debt. Stop using credit full stop.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • adg89
    • By adg89 6th Nov 18, 10:03 AM
    • 78 Posts
    • 136 Thanks
    adg89
    It's never too late to remedy that though and to start teaching him how to budget - especially with a part-time income - talk to him about the dangers of overspending and not living within your means - maybe talk about other people's diaries on here? Use them as a cautionary tale.
    I don't think enough people are open about their finances with their family, and sometimes, that can make things worse.
    It looks like you're off to a great start with paying back your debts though, so congrats :-)

    • enthusiasticsaver
    • By enthusiasticsaver 6th Nov 18, 10:07 AM
    • 8,765 Posts
    • 20,361 Thanks
    enthusiasticsaver
    I have just read the posts above and see you have already answered about the Zopa loan. Putting money aside for tax/NI is also critical when you are self employed. Do you have an accountant? Good to see you have already put some economy measures in place.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • charliedavis
    • By charliedavis 6th Nov 18, 2:02 PM
    • 400 Posts
    • 970 Thanks
    charliedavis
    It looks like you base your spending on your best months income which is of course variable. You also make the common mistake of not putting money away in the good income earning months to cover the bad months.

    Firstly you need emergency savings to stop you relying on credit when you don't have enough income coming in so I don't think you should be throwing all available money towards repaying the debt or you will have a boom and bust situation. The best way to reduce debt is to live within budget and stop spending on credit cold turkey so get rid of the credit cards and definitely don't consolidate. Was the Zopa loan a consolidation? It makes your situation so much worse.

    Your rent is way way too high and consequently the council tax and presumably your utilities so presumably you have over guestimated your income and rented way above your financial capabilities. There are other areas for savings like groceries, entertainment, holidays, gifts, mobiles, cable tv, electricity and oil. They could all be halved for a family of your size. I am puzzled how you have such high HP but no assets for it to be secured on as presumably it is not the 6000 cars?


    While I think overpaying the debt is certainly a priority especially as you have fairly high interest rates being charged and presumably no option to move to 0% I think saving an emergency fund is every bit as important. I also don't think you are sending a particularly good lesson to your DS in paying for all his driving lessons when you obviously cannot afford it. We paid for the first block of lessons for our two daughters and then they paid their own by getting jobs to fit around school/university. Made them appreciate money and they learnt how to budget. They are now fiscally responsible adults with no debts apart from mortgages simply because we drummed into them that credit was not an option, living within a budget was crucial and saving for things was paramount. Learning to say no, I cannot afford that is the first lesson but it will be a good one for your DS to learn so he does not follow the same path.


    If I were you I would be tackling this by using the spare income to initially save 1000 emergency fund then direct it all to the debt. Stop using credit full stop.
    Originally posted by enthusiasticsaver
    Sorry the HP is for a car that is technically on a lease, i.e. we plan to hand it back 2 years in and exchange it for a new one, due to the number of miles OH does. I presume I could probably remove it for that reason?

    Yes totally agree our overheads are waaaay too night, looking forward to moving to somewhere far cheaper in August.

    I've moved 200 today into an EF so that is now started, thanks for the advice.

    I haven't actually used the credit cards at all for over 2 months since we started tackling the debt, and they are all now cut up into pieces lol :-)

    In other news - DS has two interviews for part-time jobs so fingers crossed this is his first steps towards managing his own finances.

    Thanks for the advice, I need to hear it!
    -99,152 net worth - scary figure - my diary out of debt!
    Total debt currently stands at 78,812.91
    Get out of debt 2019 #39 - target 26,429 - current = 2395 3-6 month EF challenge #10 - currently at 1,421/10,500
    • charliedavis
    • By charliedavis 6th Nov 18, 2:03 PM
    • 400 Posts
    • 970 Thanks
    charliedavis
    It's never too late to remedy that though and to start teaching him how to budget - especially with a part-time income - talk to him about the dangers of overspending and not living within your means - maybe talk about other people's diaries on here? Use them as a cautionary tale.
    I don't think enough people are open about their finances with their family, and sometimes, that can make things worse.
    It looks like you're off to a great start with paying back your debts though, so congrats :-)
    Originally posted by adg89
    Thanks adg89. His Dad (we aren't together) is super frugal and very well-off, so I hope his influence rubs off on him for sure!

    Thanks for the encouragement
    -99,152 net worth - scary figure - my diary out of debt!
    Total debt currently stands at 78,812.91
    Get out of debt 2019 #39 - target 26,429 - current = 2395 3-6 month EF challenge #10 - currently at 1,421/10,500
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