How to get out of this debt

Fi&Cdebtfree · 17 October 2016 at 11:21PM

Hello looking for advice. We are drowning in debt and dont know the best way to turn. Advice appreciated.
SOA below

Household 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................ 2580
Partners monthly income after tax....... 750
Benefits................................ 136
Other income............................ 0
Total monthly income.................... 3466

Monthly Expense Details
Mortgage................................ 894.3
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 158
Electricity............................. 44
Gas..................................... 44
Oil..................................... 0
Water rates............................. 76.71
Telephone (land line)................... 0
Mobile phone............................ 70 - 3 phones
TV Licence.............................. 12.12
Satellite/Cable TV...................... 81
Internet Services....................... 0
Groceries etc. ......................... 350
Clothing................................ 30
Petrol/diesel........................... 140
Road tax................................ 40
Car Insurance........................... 28.52
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 132
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 34.66
Buildings insurance..................... 20
Contents insurance...................... 23
Life assurance ......................... 51.75
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2230.06

Assets
Cash.................................... 300
House value (Gross)..................... 269000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 271300

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 158000...(894.3)....0
Total secured & HP debts...... 158000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................17000.....480.......0
lloyds.........................7200......222.......0
lloyds.........................5500......150.......0
halifax........................4500......45........0
bc.............................6000......150.......0
bc.............................4000......102.......0
Total unsecured debts..........44200.....1149......-

Monthly Budget Summary
Total monthly income.................... 3,466
Expenses (including HP & secured debts). 2,230.06
Available for debt repayments........... 1,235.94
Monthly UNsecured debt repayments....... 1,149
Amount left after debt repayments....... 86.94

Personal Balance Sheet Summary
Total assets (things you own)........... 271,300
Total HP & Secured debt................. -158,000
Total Unsecured debt.................... -44,200
Net Assets.............................. 69,100

Thanks

19lottie82 · 18 October 2016 at 12:54AM

According to your SOA you should have £1236 each month left for your debt repayments, do you?

I'm guessing not as you haven't accounted any cash for car maintenance / MOTs, yet you have 2 cars that are only worth a total of 3k? Clothes? You have 2 children but don't buy them any birthday or Christmas presents? No spends on entertainment, ever?

It's important an SOA is realistic, not just what you would like to spend.....

Check your bank / card statements and see how Much you actually spend on gifts, clothes and entertainment.......and groceries (is £350 a month realistic for main shops and top ups?) I expect it will be a lot
More than you think and this is where the £1236 a month is going.

You need a low but realistic budget for all of these categories, and stick to them!

[Deleted User] · 18 October 2016 at 9:28AM

Fi&Cdebtfree 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................ 2580
Partners monthly income after tax....... 750
Benefits................................ 136
Other income............................ 0
Total monthly income.................... 3466

Monthly Expense Details
Mortgage................................ 894.3
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 158 - Is this over 10 months? If so, switching to 12 months will reduce it to £131-66.
Electricity............................. 44 - This is high. Check comparison sites.
Gas..................................... 44 - This is high. Check comparison sites.
Oil..................................... 0
Water rates............................. 76.71
Telephone (land line)................... 0
Mobile phone............................ 70 - 3 phones - Go to PAYG/sim (~ £10 pm, per phone) only as soon as out of contract.
TV Licence.............................. 12.12
Satellite/Cable TV...................... 81 - This is £972 pa, which is :eek: Get rid and go Freeview/Freesat.
Internet Services....................... 0
Groceries etc. ......................... 350
Clothing................................ 30
Petrol/diesel........................... 140
Road tax................................ 40
Car Insurance........................... 28.52
Car maintenance (including MOT)......... 0 - Nothing :huh:
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0 - Nothing?
Other child related expenses............ 132
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 34.66
Buildings insurance..................... 20
Contents insurance...................... 23 - This is high. Check comparison sites.
Life assurance ......................... 51.75 - - This is high. Check comparison sites.
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 - Two children, and you never buy any presents?
Haircuts................................ 0 - Never?
Entertainment........................... 0 - Nothing, ever?
Holiday................................. 0 - Not even days out to the seaside/zoo?
Emergency fund.......................... 0 - You need something in here, especially being a home owner.

Total monthly expenses.................. 2230.06

Assets
Cash.................................... 300
House value (Gross)..................... 269000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 271300

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 158000...(894.3)....0
Total secured & HP debts...... 158000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................17000.....480.......0
lloyds.........................7200......222.......0
lloyds.........................5500......150.......0
halifax........................4500......45........0
bc.............................6000......150.......0
bc.............................4000......102.......0
Total unsecured debts..........44200.....1149......-

Monthly Budget Summary
Total monthly income.................... 3,466
Expenses (including HP & secured debts). 2,230.06
Available for debt repayments........... 1,235.94
Monthly Unsecured debt repayments....... 1,149
Amount left after debt repayments....... 86.94

Personal Balance Sheet Summary
Total assets (things you own)........... 271,300
Total HP & Secured debt................. -158,000
Total Unsecured debt.................... -44,200
Net Assets.............................. 69,100

My comments in red.

There seems to be quite a bit missing from your SOA, which probably explains why you are showing a small surplus, while, in your words, "drowning in debt".

Are all your debts really 0% APR?

I think you need to revisit your SOA, filling in the blank lines, and, if applicable, the APRs.

EssexHebridean · 18 October 2016 at 9:40AM

Exactly the advice others have given really - I'm guessing you don;t currently have any sort of surplus at the end of each month - and if that is the case that alone tells you that the SOA isn't reflecting real life.

Grab (ideally) 6 months of bank statements, and sit down with them - check all the figures you've already input, and highlight anything that appears on the statement that is not in the SOA currently. Go through the highlighted items one at a time and categorise them - I'm guessing you'll find that some of the items will fill the gaps in the SOA once you've averaged them out.

That £300 cash you have currently can form the basis of an emergency fund - albeit ideally you need to add to this as well. You also need to budget for the areas you're not currently covering.

How old are your children? That can make a difference to spends.

There are savings to be made on the SOA as things stand but I don't think there's a lot of point in many more comments until you re-do it to reflect your actual spending, rather than the ideal. Include in it areas of new budgeting (car maintenance being a prime example) but then you MUST make sure that money is put aside, preferably into a completely separate savings account. Check whether your bank allows you to open savings accounts off your current account that you can just shift your budgeted amount into each month - this method works well for most people.

MallyGirl · 18 October 2016 at 11:47AM

Water rates............................. 76.71 is high. If you have a meter then you need to change your habits, if not then it would be worth getting one.
However, unless you have addressed the causes of the £44k of debt then whittling away at the odd bill here and there isn't going to make a dent in your situation.
What was the £17k loan for?
what are the APRs on all the debts?

EssexHebridean · 18 October 2016 at 12:19PM

[QUOTE=MallyGirl;71471501]Water rates............................. 76.71 is high. If you have a meter then you need to change your habits, if not then it would be worth getting one.
However, unless you have addressed the causes of the £44k of debt then whittling away at the odd bill here and there isn't going to make a dent in your situation.
What was the £17k loan for?
what are the APRs on all the debts?[/QUOTE]

If there's no meter then the OP will be in the South West I'm guessing - HORRENDOUS costs for water down there and honestly, with 4 of them in the house including two children potentially needing frequent hosing down, a meter might not actually be a good move. :eek:

enthusiasticsaver · 18 October 2016 at 3:15PM

Not much to add that has not already been pointed out. The water rates are high but if OP is in South West then they are high. Groceries could probably be cut to £300 or even £250 if shopping in Lidl or Aldi. Insurances are all high so comparison sites for them as they fall due and get rid of satellite tv and change mobile phones to sim only. What are other child related expenses? No aprs on debts.

As has been said many other times on this site there is unfortunately no short cut to getting rid of debt. I strongly suspect at least one if not more of the debts were to consolidate debt and you have probably been living beyond your means for some considerable time. Others though have paid off your level of debt and your incomes are high enough at least to cover minimum payment so if you move as much as possible to 0% and snowball payments then it can be cleared but it takes a lot of money discipline. Good luck.

The SOA needs to be redone accurately to show presents bought,entertainment, haircuts, an emergency fund and something to maintain cars.

Fi&Cdebtfree · 18 October 2016 at 6:30PM

Thanks all for replies. It is totally our fault we are in this Debt, just need to try and get out of it. Our children are 13 & 10. We are in the South West looked into a water meter but it would not benefit us to change.
I will pull out a few bank statements tomorrow and post a more accurate SOA.

bsod · 18 October 2016 at 6:36PM

how many litres of water do you think £920 buys?

[Deleted User] · 18 October 2016 at 6:53PM

bsod wrote: »

how many litres of water do you think £920 buys?

It's not just water coming in.

There's also waste water disposal, and rainwater drainage.

bsod · 18 October 2016 at 6:55PM

Bedsit_Bob wrote: »

It's not just water coming in.

There's also waste water disposal, and rainwater drainage.

You don't say:rotfl:

How to get out of this debt

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