Feeling unsettled about our debts

mandyappleorange · 9 March 2017 at 3:53PM

Last year my husband and I moved into a new house. It needed loads of work doing to it. We decided to borrow in the form of loans and credit cards to fund the work. We also consolidate some existing debts and changed our car. In hindsight, we took on too much. We have been paying back the debts since Nov 2016 and have managed fine. We have stuck to a reasonable budget and on a month to month basis, the debt is manageable, despite the level ( see SOA).

I have recently discovered this forum and have developed a real urge to clear this debt asap. I am even wondering if we should sell the house and buy something smaller, take the profit and pay everything off. My husband is not up for that idea, and is quite happy with our current situation. My main worry is that we would be in a real mess should one of lose our jobs.

We do have a bit of money 'spare' at the end of month which is why we are building a small savings pot ( see SOA).

ousehold Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1850
Partners monthly income after tax....... 2997
Benefits................................ 130
Other income............................ 0
Total monthly income.................... 4977

Monthly Expense Details
Mortgage................................ 758
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 35
Gas..................................... 70
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 20
Mobile phone............................ 30
TV Licence.............................. 14
Satellite/Cable TV...................... 25
Internet Services....................... 20
Groceries etc. ......................... 350
Clothing................................ 50
Petrol/diesel........................... 150
Road tax................................ 20
Car Insurance........................... 50
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 10
Buildings insurance..................... 30
Contents insurance...................... 20
Life assurance ......................... 35
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 150
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 2257

Assets
Cash.................................... 3500
House value (Gross)..................... 2780000
Shares and bonds........................ 0
Car(s).................................. 8500
Other assets............................ 0
Total Assets............................ 2792000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 170000...(758)......0
Total secured & HP debts...... 170000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
my loan........................25000.....506.......3.3
husband loan...................25000.....382.......4.9
halifax cc 41 mnths 0..........12000.....200.......0
creation CC....................5500......55........0
barclaycard 6.9% ..............18000.....400.......6.9
Total unsecured debts..........85500.....1543......-

Monthly Budget Summary
Total monthly income.................... 4,977
Expenses (including HP & secured debts). 2,257
Available for debt repayments........... 2,720
Monthly UNsecured debt repayments....... 1,543
Amount left after debt repayments....... 1,177

Personal Balance Sheet Summary
Total assets (things you own)........... 2,792,000
Total HP & Secured debt................. -170,000
Total Unsecured debt.................... -85,500
Net Assets.............................. 2,536,500

I just sudddenly feel uncomfortable with it all.

StopIt · 9 March 2017 at 4:05PM

Ooh, my first SOA critique!

Comments in red, firstly, it doesn't look unfixable, just needs some determination and as long as the SOA is accurate you'll be OK.

mandyappleorange wrote: »

Last year my husband and I moved into a new house. It needed loads of work doing to it. We decided to borrow in the form of loans and credit cards to fund the work. We also consolidate some existing debts and changed our car. In hindsight, we took on too much. We have been paying back the debts since Nov 2016 and have managed fine. We have stuck to a reasonable budget and on a month to month basis, the debt is manageable, despite the level ( see SOA).

I have recently discovered this forum and have developed a real urge to clear this debt asap. I am even wondering if we should sell the house and buy something smaller, take the profit and pay everything off. My husband is not up for that idea, and is quite happy with our current situation. My main worry is that we would be in a real mess should one of lose our jobs.

We do have a bit of money 'spare' at the end of month which is why we are building a small savings pot ( see SOA).

ousehold Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1850
Partners monthly income after tax....... 2997
Benefits................................ 130
Other income............................ 0
Total monthly income.................... 4977

Monthly Expense Details
Mortgage................................ 758
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 35
Gas..................................... 70
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 20
Mobile phone............................ 30
TV Licence.............................. 14 (£12.12?)
Satellite/Cable TV...................... 25
Internet Services....................... 20
Groceries etc. ......................... 350 (Can Be Squeezed by at least £100 PM)
Clothing................................ 50
Petrol/diesel........................... 150
Road tax................................ 20
Car Insurance........................... 50
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 10
Buildings insurance..................... 30 (Along with contents looks high, try getting some quotes for next renewal)
Contents insurance...................... 20
Life assurance ......................... 35
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 150 (Must be cut for now I'm afraid)
Holiday................................. 100
Emergency fund.......................... 0 (Something needs to be here)
Total monthly expenses.................. 2257

Assets
Cash.................................... 3500
House value (Gross)..................... 2780000 (Is this correct, 2.8 million?)
Shares and bonds........................ 0
Car(s).................................. 8500
Other assets............................ 0
Total Assets............................ 2792000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 170000...(758)......0
Total secured & HP debts...... 170000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
my loan........................25000.....506.......3.3
husband loan...................25000.....382.......4.9
halifax cc 41 mnths 0..........12000.....200.......0
creation CC....................5500......55........0
barclaycard 6.9% ..............18000.....400.......6.9
Total unsecured debts..........85500.....1543......-

Monthly Budget Summary
Total monthly income.................... 4,977
Expenses (including HP & secured debts). 2,257
Available for debt repayments........... 2,720
Monthly UNsecured debt repayments....... 1,543
Amount left after debt repayments....... 1,177

Personal Balance Sheet Summary
Total assets (things you own)........... 2,792,000
Total HP & Secured debt................. -170,000
Total Unsecured debt.................... -85,500
Net Assets.............................. 2,536,500

I just sudddenly feel uncomfortable with it all.

If you're able to make some savings, pay off the BC ASAP etc, you'll be in a better position. It sounds like a lot of money, but you've got potentially £30k/year to pay £85k of debt, so with some fiscal discipline you can be debt free easily within 4 years.

Good luck!

DCFC79 · 9 March 2017 at 4:17PM

Looks like you have just over a thousand left once everythung is paid ? Guess you dont as you wouldnt have posted here I guess.

You list 2 cars but nothing under MOT.

Do you need 2 cars ?

EssexHebridean · 9 March 2017 at 4:19PM

Welcome to your LBM! Comments in red as usual...

mandyappleorange wrote: »

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

Monthly Income Details
Monthly income after tax................ 1850
Partners monthly income after tax....... 2997
Benefits................................ 130
Other income............................ 0
Total monthly income.................... 4977

Monthly Expense Details
Mortgage................................ 758
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 35
Gas..................................... 70 Turn the thermostat down a degree or two...
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 20
Mobile phone............................ 30
TV Licence.............................. 14 Have you already posted this SOA elsewhere? This is the second £14 I've seen in a few days! Should be £12.12
Satellite/Cable TV...................... 25
Internet Services....................... 20
Groceries etc. ......................... 350 You could drop this a bit - do you currently cook from scratch? Try Martin's Downshift challenge to get rid of branded or premium products, and get to know your local Aldi or Lidl if you have one
Clothing................................ 50 Cut to essentials only for a while
Petrol/diesel........................... 150
Road tax................................ 20 Do you actually pay this monthly? If so switch to annual - monthly costs a premium. If you already pay annually then you need a separate account to stash this away to avoid it getting frittered - same with car maintenance budget.
Car Insurance........................... 50
Car maintenance (including MOT)......... 0 You need something here - and now I'm even more sure I've seen this SOA before...:rotfl: We currently budget £160 a month to cover both our cars for servicing, MOT, depreciative costs, tax & insurance.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 10
Buildings insurance..................... 30
Contents insurance...................... 20 This is steep - check the comparison sites. Also consider making it an annual payment rather than monthly to save on the extra charge.
Life assurance ......................... 35
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 150
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 2257

Assets
Cash.................................... 3500
House value (Gross)..................... 2780000
Shares and bonds........................ 0
Car(s).................................. 8500
Other assets............................ 0
Total Assets............................ 2792000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 170000...(758)......0
Total secured & HP debts...... 170000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
my loan........................25000.....506.......3.3
husband loan...................25000.....382.......4.9
halifax cc 41 mnths 0..........12000.....200.......0
creation CC....................5500......55........0
barclaycard 6.9% ..............18000.....400.......6.9
Total unsecured debts..........85500.....1543......-

Monthly Budget Summary
Total monthly income.................... 4,977
Expenses (including HP & secured debts). 2,257
Available for debt repayments........... 2,720
Monthly UNsecured debt repayments....... 1,543
Amount left after debt repayments....... 1,177 Do you actually have this surplus?

Personal Balance Sheet Summary
Total assets (things you own)........... 2,792,000
Total HP & Secured debt................. -170,000
Total Unsecured debt.................... -85,500
Net Assets.............................. 2,536,500

I just sudddenly feel uncomfortable with it all.

You have a doppleganger on here - someone posted almost exactly the same SOA as you a few days ago!

You've got a decent surplus showing, so fiurst you need to makie sure you actually have that money and it's not getting frittered away. Spending diary, and a month to actually make this budget work and tweak where needed, plus separate savings accounts for car costs, holiday budget etc would be a good start I'd say. with your incomes it is madness that you're paying extra for paying things monthly - switch to paying annually and budgeting for the next year where you can.

StopIt · 9 March 2017 at 4:22PM

EssexHebridean wrote: »

Welcome to your LBM! Comments in red as usual...

You have a doppleganger on here - someone posted almost exactly the same SOA as you a few days ago!

You've got a decent surplus showing, so fiurst you need to makie sure you actually have that money and it's not getting frittered away. Spending diary, and a month to actually make this budget work and tweak where needed, plus separate savings accounts for car costs, holiday budget etc would be a good start I'd say. with your incomes it is madness that you're paying extra for paying things monthly - switch to paying annually and budgeting for the next year where you can.

Plot Twist, the other SOA was the OP's Partner.

EssexHebridean · 9 March 2017 at 4:49PM

StopIt wrote: »

Plot Twist, the other SOA was the OP's Partner.

If that's for real then they need to get their heads together as while there were similarities, I'm pretty sure there were some differences, too! :rotfl:

enthusiasticsaver · 9 March 2017 at 7:57PM

At that level of unsecured debt I think you need to get on top of this without delay and yes I would feel uncomfortable with that amount of unsecured debt too. The problem with taking out unsecured loans and credit cards, then consolidating is that £20k of debt quickly turns into £85k as yours has. If one of you lost your job or was unable to work for any reason then this could be a tipping point. I think however on your good income and provided you decide to stop borrowing this is fixable without selling and downsizing.

The soa looks ok but you need something in car maintenance. I am guessing the £3500 cash is your emergency fund which is good. If you can resign yourself to paying £2k minimum per month towards the debt then you would be clear in less than 4 years. The interest rates are good but obviously if you could get that £18k on your Barclaycard on to a 0% card then this would be better. I would target the Barclaycard first then the creation then Halifax.

mandyappleorange · 10 March 2017 at 9:47AM

DCFC79 wrote: »

Looks like you have just over a thousand left once everythung is paid ? Guess you dont as you wouldnt have posted here I guess.

You list 2 cars but nothing under MOT.

Do you need 2 cars ?

Hi,

We do have around that amount of money left. This is why we have managed to accrue a but of savings in recent months. I am not posting because we feel we can't pay, it's more just a case of me panicking after seeing it all in black and white.

mandyappleorange · 10 March 2017 at 9:49AM

StopIt wrote: »

Plot Twist, the other SOA was the OP's Partner.

Ha ha, there is little chance of my partner posting on here! He doesn't even know how to logon!

StopIt · 10 March 2017 at 9:56AM

mandyappleorange wrote: »

Hi,

We do have around that amount of money left. This is why we have managed to accrue a but of savings in recent months. I am not posting because we feel we can't pay, it's more just a case of me panicking after seeing it all in black and white.

In that case, honestly don't worry. If you over-pay etc and make a few tweaks as suggested to your monthly budget, you can easily be Debt Free within 4 years. It is scary sometimes seeing things in black and white, but you guys look like you've had your LBM, and your situation is very much fixable. If you can get a balance transfer for the BC, all the better but if not, just overpay the hell out of it before moving onto other debts.

Also, I was 90% sure the post EH was referring to couldn't possibly be your partner, but my word wouldn't it have been funny if you had both had this LBM and ran here separately and concurrently!

ReadingTim · 10 March 2017 at 10:58AM

mandyappleorange wrote: »

My main worry is that we would be in a real mess should one of lose our jobs.

Ultimately it's up to you to make a judgement call on how likely it is that that will happen; and if it does, how long it might take to find another. Lots of things could happen - it doesn't mean that they will happen. You could be hit by a bus tomorrow - doesn't mean you will.

Feeling unsettled about our debts

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