Yesterday, I had my first annual review of my Debt management Plan.
So, what´s it been like my first year on a DMP? Was it easy? Has it been a struggle? Have I learnt anything useful that I can pass on to others in my predicament?
Well, the answers are, interesting, no, yes and yes!
I put off phoning the CCCS for over a month. To do the review, you need to accumulate lots of bits of financial information and frankly it takes some doing to get all those details together. Also, having struggled for 12 months to make ends meet on what they allowed me the first time I did my budget, I was a bit reluctant to call in case I came off even worse than I have for the last year.
This was my first mistake. The annual review sorts all your expenditure into different categories and money is then allocated to these categories on one of two bases (that´s base eeze, hopefully the plural of basis – let me know if I´m wrong!)
If, for instance, it´s your mortgage, then it´s however much it is, but if it´s how much you spend on food, then there are preset limits over which you´re not really allowed to go, or the credit companies start to question why you´re spending so much.
Over the month I prevaricated, my mortgage reduced by 30 quid a month and the price of petrol came down by around 20 pence a litre. If I´d set the amounts at that point I could´ve been quite a few quid a month better off.
On the other hand, I did find out something very, very important which I didn´t know and which, in a way, negates what I just said in the previous paragraph.
That very, very important thing is that if you have a big, one-off unavoidable expense looming, (for instance my car needs a new clutch and they quoted me 400 quid, or I need a new central heating boiler and that´s going to cost the best part of 1000 pounds), then you can phone the CCCS up and cut your payment to your creditors for that month by how much your big expense is going to cost.
The amount of stress not knowing that has caused me over the past 12 months is, well, it´s bigger than a big thing.
In fact, it would have saved me getting myself into a bit of trouble with the CCCS and possibly with my creditors.
The house we live in is a sort of half-timbered construction and we have wooden windows. This means that every few years, you have to paint the exterior of the house or, basically, it falls to bits as the weather gets to it. Well we haven´t painted it for quite a while and the weather has got to it and, to cut a long story short, it was now or never, or we would have been looking at a couple of thousand pounds for new windows all round the house, not to mention a possible damp problem on the white bits in between the half-timbered bits.
So, we had to get it painted and the bill for that came to 500 quid. Unfortunately, they only budgeted 17 quid a month for repairs which comes to a total of 204 quid for the whole year and I hadn´t saved that anyway as I´d had to do other jobs on the house over that year.
So I ended up getting an overdraft I wasn´t supposed to have to pay for it. To be honest, I also added more debt by borrowing another 500 quid off my dad and another 400 quid of overdraft just to cover car repairs, house repairs and the fact that petrol, electricity, gas and food prices all went through the roof last year.
That´s why the very, very important fact is so important. There´s really no need to get an overdraft, or get further in a mess – you just phone them back and tell them you´re going to be in a mess if they don´t do something – I thought my budget was set for the year and that if my mortgage went up by 50 quid a month, I just had to find the money from somewhere, somehow – but you don´t!
How much more stress free is that? We waited all through the summer thinking we couldn´t afford to paint the house and wondering, worrying how we could pay for it and in the end time beat us and we had to make a very difficult decision to go further into debt. The sad thing is, we had no need to worry, or to wait – it just needed a phonecall.
Now instead, I have to open yet another bank account and add my overdraft to my list of creditors – proper embarrassing and a right pain in the bum swapping all the direct debits over too.
So, how am I set up for next year? Well, I´ve managed to negotiate to pay 50 quid a month less than last year so hopefully, although it´ll still be a struggle and we´ll still be eating beans on our toast rather than caviar, knowing what I now know about big one-off expenses, it hopefully won´t be too painful.
………….So then, a fortnight in the Maldives for 2 adults and 1 child, should come in at ooh, I dunno, 4 grand………….? I don´t really think I´d get away with that one, but you have to have a dream, don´t you?
Yesterday, I had my first annual review of my Debt management Plan.
So, what´s it been like my first year on a DMP? Was it easy? Has it been a struggle? Have I learnt anything useful that I can pass on to others in my predicament?
Well, the answers are, interesting, no, yes and yes!
I put off phoning the CCCS for over a month. To do the review, you need to accumulate lots of bits of financial information and frankly it takes some doing to get all those details together. Also, having struggled for 12 months to make ends meet on what they allowed me the first time I did my budget, I was a bit reluctant to call in case I came off even worse than I have for the last year.
This was my first mistake. The annual review sorts all your expenditure into different categories and money is then allocated to these categories on one of two bases (that´s base eeze, hopefully the plural of basis – let me know if I´m wrong!)
If, for instance, it´s your mortgage, then it´s however much it is, but if it´s how much you spend on food, then there are preset limits over which you´re not really allowed to go, or the credit companies start to question why you´re spending so much.
Over the month I prevaricated, my mortgage reduced by 30 quid a month and the price of petrol came down by around 20 pence a litre. If I´d set the amounts at that point I could´ve been quite a few quid a month better off.
On the other hand, I did find out something very, very important which I didn´t know and which, in a way, negates what I just said in the previous paragraph.
That very, very important thing is that if you have a big, one-off unavoidable expense looming, (for instance my car needs a new clutch and they quoted me 400 quid, or I need a new central heating boiler and that´s going to cost the best part of 1000 pounds), then you can phone the CCCS up and cut your payment to your creditors for that month by how much your big expense is going to cost.
The amount of stress not knowing that has caused me over the past 12 months is, well, it´s bigger than a big thing.
In fact, it would have saved me getting myself into a bit of trouble with the CCCS and possibly with my creditors.
The house we live in is a sort of half-timbered construction and we have wooden windows. This means that every few years, you have to paint the exterior of the house or, basically, it falls to bits as the weather gets to it. Well we haven´t painted it for quite a while and the weather has got to it and, to cut a long story short, it was now or never, or we would have been looking at a couple of thousand pounds for new windows all round the house, not to mention a possible damp problem on the white bits in between the half-timbered bits.
So, we had to get it painted and the bill for that came to 500 quid. Unfortunately, they only budgeted 17 quid a month for repairs which comes to a total of 204 quid for the whole year and I hadn´t saved that anyway as I´d had to do other jobs on the house over that year.
So I ended up getting an overdraft I wasn´t supposed to have to pay for it. To be honest, I also added more debt by borrowing another 500 quid off my dad and another 400 quid of overdraft just to cover car repairs, house repairs and the fact that petrol, electricity, gas and food prices all went through the roof last year.
That´s why the very, very important fact is so important. There´s really no need to get an overdraft, or get further in a mess – you just phone them back and tell them you´re going to be in a mess if they don´t do something – I thought my budget was set for the year and that if my mortgage went up by 50 quid a month, I just had to find the money from somewhere, somehow – but you don´t!
How much more stress free is that? We waited all through the summer thinking we couldn´t afford to paint the house and wondering, worrying how we could pay for it and in the end time beat us and we had to make a very difficult decision to go further into debt. The sad thing is, we had no need to worry, or to wait – it just needed a phonecall.
Now instead, I have to open yet another bank account and add my overdraft to my list of creditors – proper embarrassing and a right pain in the bum swapping all the direct debits over too.
So, how am I set up for next year? Well, I´ve managed to negotiate to pay 50 quid a month less than last year so hopefully, although it´ll still be a struggle and we´ll still be eating beans on our toast rather than caviar, knowing what I now know about big one-off expenses, it hopefully won´t be too painful.
………….So then, a fortnight in the Maldives for 2 adults and 1 child, should come in at ooh, I dunno, 4 grand………….? I don´t really think I´d get away with that one, but you have to have a dream, don´t you?
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