Looking for a little advice to get on the right track - SOA attached

matt91 · 24 October 2017 at 3:42PM

Hi everyone

Just looking for a little bit of advice, as myself and my partner seem to be doing worse off every month and our finances seem to be dwindling while trying to stay afloat and become debt free

So currently I have two credit cards, and a bank loan repayment, all 3 of which total around £300 a month in repayments. As it stands with the way I pay them off at the minute, I will have them all paid off by between 2021 - 2022

My take home pay is around £2300 a month, and all of my outgoings (debt repayments, bills, food, diesel etc) all total around the £2100 mark

Although that sounds like I am doing okay, that £200 quickly disappears in a couple of day trips, and extra little expenses every so often that drive the cost of food etc up

I have a £1750 overdraft in my bank account that I almost permanently live in. Two days after I get paid my rent comes out, which immediately puts me in my overdraft. By the time payday almost comes around again I am extremely close to hitting my overdraft limit (and have done on a couple of occasions)

When I look at how much I get charged a month to use my overdraft, it doesn't seem much which is good, but I find myself thinking I am a failure just because I can't seem to climb out of it steadily. I have a steady full time job that pays very well for my age and experience so I can't complain in that regard. Unfortunately my girlfriend does not work though. She is trying to find a job that will fit around taking our daughter to school and picking her up, but it seems to be incredibly difficult. She is currently on job seekers allowance that means she manages to help a tiny bit with the bills but after december her payments stop, which leaves us with more problems

We are taking steps to try and reduce monthly outgoings as much as possible. For instance, we got our virgin bill from £59 a month to only £29 a month. Unfortunately cancelling is kind of out of the question since I sometimes work from home and need access to the internet. My credit card repayments are only a few pounds higher than the minimum required, in order to try and get them paid off a bit quicker, but means I can't really lower the payments to try and gain a little money that way short term

We're at the stage now where I am thinking of applying for a second job, just in order to try and create a bit of a buffer for us to stop us getting worse, otherwise in a couple of months time in all likelihood we'll be starting to use credit cards for little purchases, which in all honestly is what got me to this stage in the first place. Getting a second job has its own set of challenges though, as I don't have a lot of free time as it is with working full time. My intention is to try and get a job as a parcel delivery driver on evenings and weekends, and see how that goes, but I am worried how that will affect me considering I feel fairly exhausted as it is. The tradeoff to feel less stressed about finances makes it seem worthwhile though

I am just wondering if anyone has any similar stories where they managed to get finances back on track, or tips on how we can try and stay afloat? I definitely don't feel like we've hit dire straits yet, as we can afford our bills (just) but the thought that we're not that far away from it is making me stressed and depressed, and I am trying to tackle it sooner rather than later

Here is my SOA as requested. I have tried to be as honest and accurate as possible:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2378
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2378

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 235
Rent.................................... 750
Management charge (leasehold property).. 0
Council tax............................. 108.94
Electricity............................. 39
Gas..................................... 39
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 73
TV Licence.............................. 12.12
Satellite/Cable TV...................... 29
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 20
Petrol/diesel........................... 90
Road tax................................ 11.81
Car Insurance........................... 59.85
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 11
Buildings insurance..................... 7
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 12
Presents (birthday, christmas etc)...... 50
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2107.72

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 1500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 8000.....(235)......10
Total secured & HP debts...... 8000......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card 1..................1561......22.69.....6.684
Credit Card 2..................2010......44.17.....13.96
Total unsecured debts..........3571......66.86.....-

Monthly Budget Summary
Total monthly income.................... 2,378
Expenses (including HP & secured debts). 2,107.72
Available for debt repayments........... 270.28
Monthly UNsecured debt repayments....... 66.86
Amount left after debt repayments....... 203.42

Personal Balance Sheet Summary
Total assets (things you own)........... 1,500
Total HP & Secured debt................. -8,000
Total Unsecured debt.................... -3,571
Net Assets.............................. -10,071

ReadingTim · 24 October 2017 at 3:49PM

Have a look at some of the other posts on this board - there's plenty of examples and some inspiring success stories from people who've dug themselves out of some pretty deep and scary holes.

There's lots of specific advice, tips and tricks, but at the end of the day it all boils down to basic maths: more has to come in than goes out.

So, however you do it, you need to do the following:

spend less
earn more

Good luck!

Karonher · 24 October 2017 at 4:05PM

Could your girlfriend do some mystery shopping/surveys to bring in a little extra? It would take a few weeks to start getting to cash out, but by December there should be something coming in.

EssexHebridean · 24 October 2017 at 4:10PM

Sort yourself out an SOA (Statement of affairs) - you'll find the link in one of the "Sticky" threads at the top of the board. Get that filled in (Accurately, honestly, and reflecting a true picture of how things are right now) and post it in here and we'll take a look.

Explore what pre/after school club options there is for your little one to give your GF more flexibility on jobs that she might be able to take. It's not easy, I know, but people are becoming more and more aware of the need to fit with childcare arrangements now, and people do find stuff that works.

National_Debtline · 24 October 2017 at 4:13PM

Hi Matt91 and welcome to MSE,

First of all, it is understandable how worrying this can be, but try not to worry, there are lots of people on here that can help. A full SOA would be a great help to see how you can really budget effectively. That may mean cutting down on luxuries and trying to boost income, to allow you to overpay the debts - if they are still realistically sustainable. You mentioned getting a second job evenings and weekends, and that your partner needs a job around your daughter. I wonder if a potential solution if for your partner to work evenings and weekends so you are not too exhausted and childcare is still covered.

As far as the bank account is concerned, I would suggest you change banks. Open a basic account with a new bank (who you do not owe any money to) - there are several reasons for this. One is that it will help you to budget as you won't constantly be overdrawn and incurring costs. And another is that banks can withdraw overdrafts at any time, and if they did this just after you were paid then this would cause serious issues. You can then try and repay the overdraft gradually like a credit card.

You mentioned a payday loan, as well. If you are renewing this loan every month, this needs to stop ASAP. You cannot reduce the debt if you are still using credit. Cut up the cards so you are not tempted. Post your SOA and we will look at this to help you.

Laura
@natdebtline

DCFC79 · 24 October 2017 at 4:24PM

You say you feel exhasted but is that from working or just not eating the right foods.

Get an soa filled in and post it up in here and edit the title to say 1 is included.

matt91 · 25 October 2017 at 8:37AM

Thanks for the replies so far everyone, I have attached a SOA which is as accurate as I can be

Just to clarify, I have not taken out a payday loan. The loan I took out a few months ago was intended as debt consolidation, which wrote off 2 of my credit cards, and paid off my car repayments as well. That is the one I am paying £235 a month towards

xmas_angel · 25 October 2017 at 9:03AM

Matt I have to say well done for recognising it needs to be sorted out now rather than a few years down the line. Unlike myself who continued to let it spiral and believe me my SOA paints a much more dire picture. Like yourself, all our bills are paid however leaves us very little to live on each month. What we’ve done is budgeted what we have left over each month after all bills are paid and then split it into weekly cash withdrawals to pay for food, Petrol, etc. So we currently have £150 a week for this, what we have left over at the end of the week, usually only £20-30 gets paid off a debt and we take another £150 out. So far we’ve managed to clear off one of my small overdrafts already and are currently working on the next one. Once this is cleared we’re tackling the credit cards and we’ve got about £6k to clear on these, once you cross one debt off the list it’s certainly motivation to keep going! I found with 2 children there was no point working part time, I went full time and paid for childcare and used to take home £400 a month afterwards, every little helped! Now my childcare has reduced to just over £400 per month so I clear a lot more so can start tackling the bills. Good luck on your journey!! You will get there!

Fosterdog · 25 October 2017 at 9:13AM

matt91 wrote: »

Hi everyone

Just looking for a little bit of advice, as myself and my partner seem to be doing worse off every month and our finances seem to be dwindling while trying to stay afloat and become debt free

So currently I have two credit cards, and a bank loan repayment, all 3 of which total around £300 a month in repayments. As it stands with the way I pay them off at the minute, I will have them all paid off by between 2021 - 2022

My take home pay is around £2300 a month, and all of my outgoings (debt repayments, bills, food, diesel etc) all total around the £2100 mark

Although that sounds like I am doing okay, that £200 quickly disappears in a couple of day trips, and extra little expenses every so often that drive the cost of food etc up

I have a £1750 overdraft in my bank account that I almost permanently live in. Two days after I get paid my rent comes out, which immediately puts me in my overdraft. By the time payday almost comes around again I am extremely close to hitting my overdraft limit (and have done on a couple of occasions)

When I look at how much I get charged a month to use my overdraft, it doesn't seem much which is good, but I find myself thinking I am a failure just because I can't seem to climb out of it steadily. I have a steady full time job that pays very well for my age and experience so I can't complain in that regard. Unfortunately my girlfriend does not work though. She is trying to find a job that will fit around taking our daughter to school and picking her up, but it seems to be incredibly difficult. She is currently on job seekers allowance that means she manages to help a tiny bit with the bills but after december her payments stop, which leaves us with more problems

We are taking steps to try and reduce monthly outgoings as much as possible. For instance, we got our virgin bill from £59 a month to only £29 a month. Unfortunately cancelling is kind of out of the question since I sometimes work from home and need access to the internet. My credit card repayments are only a few pounds higher than the minimum required, in order to try and get them paid off a bit quicker, but means I can't really lower the payments to try and gain a little money that way short term

We're at the stage now where I am thinking of applying for a second job, just in order to try and create a bit of a buffer for us to stop us getting worse, otherwise in a couple of months time in all likelihood we'll be starting to use credit cards for little purchases, which in all honestly is what got me to this stage in the first place. Getting a second job has its own set of challenges though, as I don't have a lot of free time as it is with working full time. My intention is to try and get a job as a parcel delivery driver on evenings and weekends, and see how that goes, but I am worried how that will affect me considering I feel fairly exhausted as it is. The tradeoff to feel less stressed about finances makes it seem worthwhile though

I am just wondering if anyone has any similar stories where they managed to get finances back on track, or tips on how we can try and stay afloat? I definitely don't feel like we've hit dire straits yet, as we can afford our bills (just) but the thought that we're not that far away from it is making me stressed and depressed, and I am trying to tackle it sooner rather than later

Here is my SOA as requested. I have tried to be as honest and accurate as possible:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2378
Partners monthly income after tax....... 0 what about her job seekers money?
Benefits................................ 0 what about child benefit?
Other income............................ 0
Total monthly income.................... 2378

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 235
Rent.................................... 750
Management charge (leasehold property).. 0
Council tax............................. 108.94 Is this over 10 or 12 months? If 10 ask to change to 12. Next year would be £90.78pm over 12
Electricity............................. 39 combined with gas this is a bit high, shop around for a better tariff and make sure you are being economical with your usage.
Gas..................................... 39
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 73 how many phones is this for? It’s way too high even if all three of you have contracts. Change to sim only or if still in contract see if you can drop your tariff down a level
TV Licence.............................. 12.12
Satellite/Cable TV...................... 29
Internet Services....................... 0
Groceries etc. ......................... 400 way too high, this could easily be cut in half, possibly even less. Cook from scratch, batch cook meals, brand swap, switch to Aldi and Lidl. Check out the old style board for ways to cut the costs and meal ideas
Clothing................................ 20 Stop buying new for now, only replace essentials and sell anything no longer worn on eBay
Petrol/diesel........................... 90
Road tax................................ 11.81
Car Insurance........................... 59.85
Car maintenance (including MOT)......... 0 you need something here
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 40 what is this for?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 11
Buildings insurance..................... 7 did you mean this to go in contents?
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 12
Presents (birthday, christmas etc)...... 50. you have no cash assets so where has this £50 a month been going? Do you have anything saved for Christmas?
Haircuts................................ 0
Entertainment........................... 100 look online for free and cheap things to do in your area, you’d be amazed what is around
Holiday................................. 0
Emergency fund.......................... 0 you need to start saving something here
Total monthly expenses.................. 2107.72

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 1500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 8000.....(235)......10 what is this secured against? Your car isn’t worth enough and you don’t own a house
Total secured & HP debts...... 8000......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card 1..................1561......22.69.....6.684
Credit Card 2..................2010......44.17.....13.96 any overpayment should go on this card first.
Total unsecured debts..........3571......66.86.....-

Monthly Budget Summary
Total monthly income.................... 2,378
Expenses (including HP & secured debts). 2,107.72
Available for debt repayments........... 270.28
Monthly UNsecured debt repayments....... 66.86
Amount left after debt repayments....... 203.42

Personal Balance Sheet Summary
Total assets (things you own)........... 1,500
Total HP & Secured debt................. -8,000
Total Unsecured debt.................... -3,571
Net Assets.............................. -10,071

I’ve added some comments in red, there are definitely areas where you could make some easy savings but other areas you need to save for and are not.

Keep a spending diary where you account for every penny, it’s amazing how quickly all the little spends add up.

Your girlfriend really needs to get a job, even if it’s an evening job cleaning so you are home with your child, a dinner lady/ break time supervisor to fit in with school times. Ironing at home, as said mystery shopping.

Your debts are really not too high considering your income, you just need to be quite brutal with your spending to get on top of it all, there is the potential to have at least £400 a month free to make overpayments and that’s without your partners income included. Could really be £500+

Are you both fully on board with getting the debt paid off?

Ebe_Scrooge · 25 October 2017 at 9:33AM

I'd agree with all of Fosterdog's suggestions. Just a couple of things to add in my opinion :

£50 a month seems a lot to be spending on presents - £600 a year. This could be cut down quite a lot.

Car insurance - this sounds a lot at over £700 a year. Have you shopped around to see if you can get a better deal ?

Aside from that, I'd agree totally with the previous poster's suggestions.

Mnd · 25 October 2017 at 12:27PM

I may have missed something, apologies if I have, but why are you thinking about a second job when your partner earns nothing? She should be able to find seasonal work for Xmas in local shops

Looking for a little advice to get on the right track - SOA attached

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