Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • missys86
    • By missys86 16th Feb 17, 7:09 PM
    • 2Posts
    • 1Thanks
    missys86
    in debt reality check! Help Please?
    • #1
    • 16th Feb 17, 7:09 PM
    in debt reality check! Help Please? 16th Feb 17 at 7:09 PM
    Hi everyone

    Ive had a bit of reality check today need to face facts and the fact is im in debt and lots of it! Both my husband and i work full time and have 2 children one in full time nursery and one in wrap around. We are struggling to make ends meet at the moment and im unsure how to start fixing the issue. I have done SOA which is below but have no clue what to do next. Any help would be greatly appreciated. Thank you

    [font=courier new]Statement of Affairs and Personal Balance Sheet

    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................ 1960
    Partners monthly income after tax....... 1100
    Benefits................................ 34
    Other income............................ 136
    Total monthly income.................... 3230


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 379.88
    Management charge (leasehold property).. 0
    Council tax............................. 83
    Electricity............................. 33
    Gas..................................... 33
    Oil..................................... 0
    Water rates............................. 60
    Telephone (land line)................... 0
    Mobile phone............................ 80
    TV Licence.............................. 37
    Satellite/Cable TV...................... 75
    Internet Services....................... 8.99
    Groceries etc. ......................... 200
    Clothing................................ 70
    Petrol/diesel........................... 150
    Road tax................................ 16.27
    Car Insurance........................... 148
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 652
    Other child related expenses............ 70
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 25
    Buildings insurance..................... 0
    Contents insurance...................... 8
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 30
    Entertainment........................... 50
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 2269.14



    Assets

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


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    sofa...........................1500......44.08.... .0
    car 1..........................12000.....201.8.....0
    car 2..........................5500......144.......0
    Total unsecured debts..........19000.....389.88....-



    Monthly Budget Summary

    Total monthly income.................... 3,230
    Expenses (including HP & secured debts). 2,269.14
    Available for debt repayments........... 960.86
    Monthly UNsecured debt repayments....... 389.88
    Amount left after debt repayments....... 570.98


    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -19,000
    Net Assets.............................. -19,000
Page 1
    • EssexHebridean
    • By EssexHebridean 16th Feb 17, 7:35 PM
    • 8,149 Posts
    • 43,014 Thanks
    EssexHebridean
    • #2
    • 16th Feb 17, 7:35 PM
    • #2
    • 16th Feb 17, 7:35 PM
    welcome to DFW Missy - and well done on having your Lightbulb Moment - that's the toughest bit done, to be honest - so let's crack on and see how fast you can get things sorted.

    Comments on your SOA in red, as usual...
    [font=courier new]Statement of Affairs and Personal Balance Sheet

    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................ 1960
    Partners monthly income after tax....... 1100
    Benefits................................ 34 This seems low for 2 kids - does your income level rule you out of child benefit? It doesn't seem like it should?
    Other income............................ 136
    Total monthly income.................... 3230


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 379.88
    Management charge (leasehold property).. 0
    Council tax............................. 83 Do you pay this over 10 months or 12? If 10, remember that you should have this months payment still in the bank and nothing going on this next month. Might make life simpler to contact the council and ask them to put you onto 12 monthly payments from April, too
    Electricity............................. 33
    Gas..................................... 33
    Oil..................................... 0
    Water rates............................. 60 Is this metered? If so have a read of some water saving principles and see what you can do on that
    Telephone (land line)................... 0
    Mobile phone............................ 80 Ouchy! Are either of you out of contract or nearing the end? If so look for good SIM only deals that will slash this.
    TV Licence.............................. 37 Why so much?
    Satellite/Cable TV...................... 75 Ring your provider and haggle. If you don;t want to change, you don't have to pretend you do, just given them a call and tell them you want to stay, but can't afford to, and need to know what they can do for you.
    Internet Services....................... 8.99
    Groceries etc. ......................... 200
    Clothing................................ 70 Slash this right down for now - yes I know kids need clothes, but the smaller one can wear the bigger one's cast offs, and for older kids eBay can be good, failing that the supermarket ranges offer good value for less money. For you & your OH it needs to be essentials only for a while
    Petrol/diesel........................... 150
    Road tax................................ 16.27 Do you actually pay this out monthly?
    Car Insurance........................... 148 Whoah - how much?!!! That is £1700 p-er year which is a LOT of money on insurance. Why so much? have you used the comparison sites?
    Car maintenance (including MOT)......... 0 You need something in here - two cars doing average mileage - think about setting aside a sum each month to cover MOT, servicing, and depreciative items
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 652 Do you use the childcare vouchers scheme to pay your childcare costs?
    Other child related expenses............ 70 Is this essential? Can it be trimmed?
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 25
    Buildings insurance..................... 0
    Contents insurance...................... 8
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50 Sorry to say but you need to trim this for the time being in my opinion.
    Haircuts................................ 30
    Entertainment........................... 50
    Holiday................................. 0
    Emergency fund.......................... 0 You need to start getting something in here
    Total monthly expenses.................. 2269.14



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 0 Should the car values not be in here?
    Other assets............................ 0
    Total Assets............................ 0


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    sofa...........................1500......44.08.... .0 Are all these definitely at 0%
    car 1..........................12000.....201.8.....0
    car 2..........................5500......144.......0
    Total unsecured debts..........19000.....389.88....-



    Monthly Budget Summary

    Total monthly income.................... 3,230
    Expenses (including HP & secured debts). 2,269.14
    Available for debt repayments........... 960.86
    Monthly UNsecured debt repayments....... 389.88
    Amount left after debt repayments....... 570.98 Do you actually have this surplus each month? If not you need to start a spending diary and note every penny you spend to work out where it's going.


    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -19,000
    Net Assets.............................. -19,000
    Originally posted by missys86
    On the face of it that isn't so bad. Allowing for the £570 surplus you should have, then you're looking at a touch under three years - albeit that may be able to reduce as obviously you';; be making the standard payments as well. If the sofa is - as it may be - on 0% - then leave that alone at the moment. Check whether there are any restrictions on overpaying the loans, and also whether there is any advantage to paying off in dribs and drabs rather than saving a lump sum to clear those. Saving a lump sum would have the advantage of covering both your emergency fund and car repair costs for the time being too - so that's worth thinking about.

    One thing leaps out at me from your SOA - you say you're struggling to make ends meet - but your budget doesn't suggest that at all. Is the SOA abiove there how things currently are, or how you think they should be? There's a massive difference!
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£632.77 (20/11/17)
    SOA Calculator for DFW newbies: Stoozing.com SOA Calculator
    • fatbelly
    • By fatbelly 16th Feb 17, 7:38 PM
    • 11,539 Posts
    • 8,674 Thanks
    fatbelly
    • #3
    • 16th Feb 17, 7:38 PM
    • #3
    • 16th Feb 17, 7:38 PM
    Hi

    Well your soa shows you have £570 per month surplus after paying your debts.

    Is that the case in practice? If not, you need to keep a record of spending to find out where it's going.

    The only thing that might be the culprit is groceries - £200 is low for 2 adults, 2 kids, particulary if either of the adults smokes or drinks. You might also check your tv licence as 12.12 is standard for a monthly payment.
    • ani*fan
    • By ani*fan 16th Feb 17, 7:52 PM
    • 1,498 Posts
    • 3,680 Thanks
    ani*fan
    • #4
    • 16th Feb 17, 7:52 PM
    • #4
    • 16th Feb 17, 7:52 PM
    Hi there

    You've had some good advice about trimming your budget, I thought it looked ok but would agree there are savings to be made.

    If you get rid of the £12k car and got one more affordable then you wouldn't have much of a debt problem. Just a thought.

    Best of luck.
    If you know you have enough, you're rich.
    • laurenh1
    • By laurenh1 16th Feb 17, 7:53 PM
    • 230 Posts
    • 1,916 Thanks
    laurenh1
    • #5
    • 16th Feb 17, 7:53 PM
    • #5
    • 16th Feb 17, 7:53 PM
    Good for you for sorting this. Looks to me like your TV licence is quarterly. Are you struggling to make ends meet at the end of a month or are you left with 500 to play with? I would second what everyone else is saying, keep a diary for few months and see what you're really spending on things it may well be that your grocery bill is a lot higher than 200 or that your spending a lot on something ax daft as a daily coffee. Also consider annual expenses (holidays MOT christmas etc etc) I try and budget these in monthly to give a good reflection of what I actually spend over 12 months so I'm not caught out by "one off" big expenses xx
    • laurenh1
    • By laurenh1 16th Feb 17, 7:58 PM
    • 230 Posts
    • 1,916 Thanks
    laurenh1
    • #6
    • 16th Feb 17, 7:58 PM
    • #6
    • 16th Feb 17, 7:58 PM
    Also as the others have said, go through your bills. Depending on your preference either put one afternoon aside and go through them all (compare, haggle etc) or set yourself a challenge of doing one per day. Say calling sky one day, gas and electric the next. There's a good guide in thr money diet if you're unsure xx
    • EssexHebridean
    • By EssexHebridean 16th Feb 17, 8:33 PM
    • 8,149 Posts
    • 43,014 Thanks
    EssexHebridean
    • #7
    • 16th Feb 17, 8:33 PM
    • #7
    • 16th Feb 17, 8:33 PM
    Good for you for sorting this. Looks to me like your TV licence is quarterly. Are you struggling to make ends meet at the end of a month or are you left with 500 to play with? I would second what everyone else is saying, keep a diary for few months and see what you're really spending on things it may well be that your grocery bill is a lot higher than 200 or that your spending a lot on something ax daft as a daily coffee. Also consider annual expenses (holidays MOT christmas etc etc) I try and budget these in monthly to give a good reflection of what I actually spend over 12 months so I'm not caught out by "one off" big expenses xx
    Originally posted by laurenh1
    This is excellent advice - and can work really well. the method we use is to set up automated transfers each month when we get paid into various "offshoot" savings accounts - we have then for car expenses, holiday, Christmas/presents, small household expenses (so when the contents insurance comes due, or the kettle or iron breaks) and even one for general "fun" stuff. Once you get into the habit of separating everything that is allocated elsewhere out before you start, it's easy to remember that what's left is all there is.
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£632.77 (20/11/17)
    SOA Calculator for DFW newbies: Stoozing.com SOA Calculator
    • missys86
    • By missys86 16th Feb 17, 10:08 PM
    • 2 Posts
    • 1 Thanks
    missys86
    • #8
    • 16th Feb 17, 10:08 PM
    • #8
    • 16th Feb 17, 10:08 PM
    Wow thanks for the replies!
    To answer a few questions,
    We do get child benefit that's the 136 amount and 36 for tax credits.
    The car insurance is for both cars.
    The other child care cost is for my sons school lunch and breakfast club.
    Council tax is over 12months
    And the TV licence is quarterly, my mistake!

    Both cars are on finance so could we trade on in? One of the mobile contract will end in March so it will be switched to a sim only.

    I don't think we do have £500 left after paying everything so I am going to start a spending diary to keep track of everything

    Loads of ideas. Thanks again
    • enthusiasticsaver
    • By enthusiasticsaver 16th Feb 17, 10:19 PM
    • 4,680 Posts
    • 8,867 Thanks
    enthusiasticsaver
    • #9
    • 16th Feb 17, 10:19 PM
    • #9
    • 16th Feb 17, 10:19 PM
    I think you have some holes in your soa as presumably you do not have £500 spare each month. You do not have credit card debt though so that is good and I am assuming the sofa is interest free credit so no need to address that beyond monthly payments being built into your budget. Keeping a spending diary is a good idea. I am guessing there are lots of additional cash withdrawals, grocery spends and as you have pets there is probably pet food too.

    The cars look like the problem but presumably they are in good condition as the loans are quite high. I doubt they are on 0% and not sure what type of finance you have taken out for them. Are they actually loans or are they these finance deals where there is a balloon payment at the end or you never actually own the car? What finance deal you are on affects whether you can get out of it and get rid of one of the cars.

    You need an emergency fund and as others have said, the mobiles, cable tv and clothing and car insurance is high. Even for 2 cars £1776 is extortionate insurance. Are either of you new drivers?
    4 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, 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
    • fatbelly
    • By fatbelly 16th Feb 17, 11:55 PM
    • 11,539 Posts
    • 8,674 Thanks
    fatbelly
    Both cars are on finance so could we trade on in?
    Originally posted by missys86
    If they are on hire purchase or conditional sale, then you can do a voluntary termination, and your liability is limited to half the total amount. So if you are already half way through the agreement, you should be able to escape without penalty

    https://www.nationaldebtline.org/EW/factsheets/Pages/hire-purchase-debt/hire-purchase-and-conditional-sale.aspx
    • laurenh1
    • By laurenh1 17th Feb 17, 8:01 AM
    • 230 Posts
    • 1,916 Thanks
    laurenh1
    A spending diary will be a real eye opener I think, which is why people are suggesting it. A few years ago I was wondering where all my cash was going I wasn't extravagant and we earned ok money (nothing to write home about) and it was nipping into tesco and spending 30 quid unplanned or the husbands McDonald's lunch a few times a week , I used to stop at the food van on the way to work for a bacon roll and coffee with was only 3 a day but it all adds up. Once I knew where i was spending I could cut back. I still do it now just to keep an eye on it so if my groceries go or my fuel for example , I don't cut back anymore but I can budget accordingly
    • chelseablue
    • By chelseablue 17th Feb 17, 9:50 AM
    • 2,287 Posts
    • 2,813 Thanks
    chelseablue
    The car insurance looks very high, are either of you new drivers?


    My partner passed his test in 2014 and his insurance started off at £1000 for the year (he was 24)


    For this year we paid £600 for him and £300 for me
    Mortgage starting balance 26.02.16 £231,294
    Mortgage after Year 1 £225,078
    • tallyhoh
    • By tallyhoh 17th Feb 17, 10:25 AM
    • 2,084 Posts
    • 2,116 Thanks
    tallyhoh
    Have you totted up all the child care & car expenses? your partner may be working for very little after expenses are taken into account, just a thought.
    Tallyhoh!

    Stopped Smoking October 2000. Saved £21,840 so far!
    • Biollante21
    • By Biollante21 17th Feb 17, 10:26 AM
    • 55 Posts
    • 56 Thanks
    Biollante21
    Welcome to the forum from a relative newcomer
    Some great advice already given from the brilliant and very knowledgeable people here
    The only thing i can suggest is if you are not in contract with sky/virgin then consider a Now Tv account at £10 per month
    There are a couple of different packages available and it would save you money each month if only until you get back on your feet
    Good luck with everything
    Months since overdraft used 5
    Get rid of credit card debt - £7900.00 (15/02/17) £7550 (23/02/17) £7250 (13/03/17) £6874 23/03/17
    Pay off Argos card by Xmas 2016 - 20/06/16 £1475.00 owed - 21/06/16 £1400.00 owed - 20/01/17 Paid off
    • chelseablue
    • By chelseablue 17th Feb 17, 10:28 AM
    • 2,287 Posts
    • 2,813 Thanks
    chelseablue
    Have you totted up all the child care & car expenses? your partner may be working for very little after expenses are taken into account, just a thought.
    Originally posted by tallyhoh
    Ain't that the truth! Our childcare is £860 a month for 3 days a week

    Cant wait until September when we will be eligible for the government funded hours
    Mortgage starting balance 26.02.16 £231,294
    Mortgage after Year 1 £225,078
    • enthusiasticsaver
    • By enthusiasticsaver 17th Feb 17, 11:15 AM
    • 4,680 Posts
    • 8,867 Thanks
    enthusiasticsaver
    The car insurance looks very high, are either of you new drivers?


    My partner passed his test in 2014 and his insurance started off at £1000 for the year (he was 24)


    For this year we paid £600 for him and £300 for me
    Originally posted by chelseablue
    The monthly figure in the soa is incorrect then. £900 per year is £75 per month not £148 which means your surplus should be even higher. Do you pay it monthly or annually?
    4 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, 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
    • Karonher
    • By Karonher 17th Feb 17, 1:10 PM
    • 426 Posts
    • 1,992 Thanks
    Karonher
    The monthly figure in the soa is incorrect then. £900 per year is £75 per month not £148 which means your surplus should be even higher. Do you pay it monthly or annually?
    Originally posted by enthusiasticsaver
    I think chelseablue is just giving details of her situation not the OPs

    Other than satellite I can't see where you can cut. If you identify the "missing" £500 that may make it easier for you to make savings.
    Getting ready for Christmas 2017

    Aiming to make £4,500 online in 2017.
    • MrsTinks
    • By MrsTinks 17th Feb 17, 8:05 PM
    • 14,993 Posts
    • 23,026 Thanks
    MrsTinks
    You say you're in debt and lots of it - but you only really have a sofa and 2 cars? Are you maybe missing off any card debts and overdrafts from your SOA?
    DFW Nerd #025
    DFW no more! Officially debt free 2017 - now joining the MFW's!

    My DFW Diary - blah- mildly funny stuff about my journey
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

162Posts Today

1,353Users online

Martin's Twitter