Where to start?!?

Kie120_2 · 19 June 2016 at 11:14AM

So I've been lurking on these forums a while, reading other peoples diaries and feeling a combination of being both inspired and daunted at the same time.

My partner and I are about to take on a mortgage of nearly 260k and the need for us to both budget and reduce debt has never been greater!

I'm at a bit of a loss where to start, I'm nervous that we'll struggle from month to month, never mind be able to make quicker inroads into our debt than paying minimum requires.

Ok so we're both mid thirties -

Our total monthly income is £3800

Mortgage is - £1100
Council Tax - £140
Water - £30
Credit cards - £100 p/m
Car Loan - £265 p/m (2.5 years remaining)
Loan back to parents for help towards house deposit (2 years remaining) - £250
Utilities - £140 (estimated for new place)
Mobile phone - £55 (one contract one monthly SIM)
Broadband and landline - £ 20
Car Insurance £50
Home insurance £40 (estimated for new place)
Pet Insurance £12
Travel (I commute to London from York 2/3 days a week) £600

This leaves us around £1000 to 'live' off. Is this enough for two people and a small dog? It feels like it should be but I'm not sure on the kind of budget we should be setting, where the obvious savings might come and how we might afford home improvements.

I should add that we are also looking to take in homestay students to bump up our income, so this should give us an extra 2-300 per month.

Any advice, perspective would be welcome!

K

Dobbibill · 19 June 2016 at 4:53PM

Hi Kie, Welcome

Congrats on getting your new place.

It is daunting taking such a big step but starting off the right way and budgeting will prove invaluable in the future.

You really should complete a SOA, tweak it over the coming months as your estimates become realistic figures.

There will be things on the SOA that you haven't included above.

If possible pay for home ins and car ins off annually and save monthly for them. Use sites like TCB and Qu1dco to bring the net cost down.

Start by buying what you need, not what you want until you have tweaked your SOA.

anna_1977 · 20 June 2016 at 1:26PM

What does your £140 utilities include?

FBaby · 20 June 2016 at 1:57PM

Are you planning on remaining child free? Because if so, you're ok, but if babies are on the horizon, that's the budget blown.

mrsbee17 · 20 June 2016 at 2:12PM

Welcome :-)

A SOA would really help you see where everything is going and it's a great start; birthdays, Christmas' etc, all add up. Once you're in order consider setting a little aside each month for these. Also, consider putting money away for any problems with the car and house repairs.

nkkingston · 20 June 2016 at 3:55PM

Oh, London to York commute! That's not a cheap line, is it? And there always seem to be delays! I'm guessing from the price you're already on a season ticket for that, but if you have any coworkers who make the same commute on the same days consider getting a two together railcard to save yourselves 33%. And when you are inevitable delayed, remember to claim. They'll make you jump through hoops, but it's absolutely worth doing.

Go through your last few bank statements and work out a SOA based on what you're currently spending, and work out if that's sustainable. If it's not, find the places where you're overspending without noticing - for me, it's nearly always food, because I like to cook exotic recipes from scratch (and have a terrible memory for whether it's the lemongrass or the kaffir lime leaves we've run out of...). Then go hunting the bargains to get things like your mobile phone bills down - the average person is paying for more than double the data and minutes they actually need. I just cut mine from £22 a month to £7.50 after checking my actual usage!

National_Debtline · 20 June 2016 at 6:00PM

Hi Kie and thanks for your post.

I would echo what others have said about posting a full Statement of Affairs (SOA) - http://www.stoozing.com/calculator/soa.php offers a good template - as among other things this will enable us to see what level of credit card debt you are trying to pay down and whether your balances currently incur any interest or are on 0% deals. Depending on the answer to that question, you may want to shift more of your disposable income towards bring down those balances more quickly. We have a guide of our own to budgeting and saving:

https://www.nationaldebtline.org/EW/factsheets/Pages/budgetingandsaving/budgetingadvice.aspx

Good luck with your move!

Dennis
@natdebtline

Where to start?!?

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