Best way forward?

solvencyseeker · 17 May 2014 at 9:33AM

We are doing quite well - 3 months no CC spending, made some good changes and debt is reducing. Bit of a glitch this month with urgent car repair (brakes) but we are not being defeated.

This is our plan and I wecome any feedback (as we have made errors of judgement in the past when thinking we were doing the right thing).

We have changed our bank account so Overdraft 2 is now fee free for 12 months. This is our main account (we come close to the £2,000 limit). Overdraft 1 is our "spending" account (groceries, petrol etc) and is now the most expensive debt (£6 per month fixed fee plus interest). I think it makes most sense to transfer our allocated spending budget to this account and aim to reduce the overdraft each month. Snowball agrees with this and I think the fewer days we are overdrawn the lower the interest?

OH has just got a 0% CC - for balance transfers for 26 months (for purchases for 15 months) with £3,200 limit. I think the best use is to balance transfer as much as we can from the CC costing the most interest?

Am very wary of making the wrong decisions.

Was also shocked to see on another post that CC interest rates can be increased - is that a common practise? That would be a nightmare for us.

Thanks for reading and please advise if you can.

If you haven’t already, join the forum to reply!

[threadbanner]box[/threadbanner]

[Deleted User] · 17 May 2014 at 10:30AM

My advice is to post a SOA, and let the good people (aka geniuses) of MSE take a look.

http://www.stoozing.com/calculator/soa.php

solvencyseeker · 17 May 2014 at 10:49AM

I did do that back in March and we have reworked our budget and made some changes accordingly. I could try and find my original post and ask this question at the end of it, but it went off on a bit of a pet care tangent.....

Do I need to add more info?

[Deleted User] · 17 May 2014 at 11:05AM

I'd suggest reposting it, with the changes made, and the current situation, such as the balances, APRs etc.

If you clicked save data, in the SOA calculator, your original figures should still be available.

solvencyseeker · 17 May 2014 at 8:06PM

Don't think I used that one before. I should rework the SOA in any case as there has been a few changes (for starters son 2 is now earning - at last!).

I will rework and post again.

dancingfairy · 18 May 2014 at 9:19AM

Yes, your plan sounds logical. Just make sure you are continue paying the debt off and not just shifting it around. Even if you transfer some of it to 0% you should obviously still regard this as a debt to be tackled so you are not caught out at the end of the 0% period.
df

solvencyseeker · 18 May 2014 at 2:34PM

Having trouble with the SOA calculator (probably this laptop is too old and slow). Have managed to print it off and have retyped it into Excel but it doesn't paste into here in a readable format :mad:

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 4
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1648.3
Partners monthly income after tax....... 1758.07
Benefits................................ 82
Other income............................ 200
Total monthly income.................... 3688.37
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 895
Management charge (leasehold property).. 0
Council tax............................. 160.45
Electricity............................. 72
Gas..................................... 96
Oil..................................... 0
Water rates............................. 15.28
Telephone (land line)................... 32.82
Mobile phone............................ 58
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 500
Clothing................................ 20
Petrol/diesel........................... 275
Road tax................................ 16.5
Car Insurance........................... 16.83
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 60
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 20
Buildings insurance..................... 0
Contents insurance...................... 8.75
Life assurance ......................... 19.68
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 12
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 20
Bank Charges............................ 20
Dog walker.............................. 80
Motorbike insurance..................... 77.65
Motorbike finance....................... 61.78
Total monthly expenses.................. 2679.86

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Overdraft 1....................945.......0.........20
Overdraft 2....................2000......0.........0
Credit Card 1..................11177.4...285.......18.9
Loan...........................10137.....372.......14.9
Credit Card 2..................7347.5....165.......18.9
Total unsecured debts..........31606.9...822.......-

Monthly Budget Summary
Total monthly income.................... 3,688.37
Expenses (including HP & secured debts). 2,679.86
Available for debt repayments........... 1,008.51
Monthly UNsecured debt repayments....... 822
Amount left after debt repayments....... 186.51
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -31,606.9
Net Assets.............................. -30,606.9
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

Then it suddenly decided to work!!

Just to add - we are a family of 4. 2 sons 21 and 18. 21 year old lives at home and is working and contributes income. 18 year old is in full time educaion, hoping to go to Uni in Autumn and now has a part time job (so I no longer give him pocket money and he puts the petrol in his bike). We also have 2 dogs.

thebritishbloke · 18 May 2014 at 2:46PM

£500 a month on groceries for 4 people :eek: :eek: :eek: This is probably the easiest cutback for you to do. Learn to cook some basic meals, things like chopped tomatoes and dried pasta go a long way and you can make a load of different meals.

£80 on a dog walker, is there any reason you can't do this yourself between 4 people? If it's because nobody is in during the day, a lot of dogs are left alone at home during the day and walked in the mornings and evenings.

Is the motorbike for leisure or commuting?

What is 'Other travel'?

£33 a month on a landline AND £58 a month on mobile phones? You can get a much better deal with your landline. Go with TalkTalk, pay the line rental up front and it works out to £10.50/Month, the internet is £3.50 a month. Then you can get £50 cashback. So the average monthly cost works out to £9.84 a month. Don't make any outgoing calls on the house phone except for 0800 numbers. Use your mobile phones to ring mobiles and landlines, check SayNoTo0870.com if you want to ring an 0845/0870 number etc.

Is the £58 a month on mobile phones just you or for all 4 people?

Are you commuting long distances every day? £280 a month on petrol is pretty hefty.

longtermplanner · 18 May 2014 at 6:21PM

Tell your son that he needs to be paying you more than £200 a month - that is simply unrealistic.

£500 for groceries included two sons that age sounds normal to me. They probably empty the fridge of food within hours of you shopping...

thebritishbloke · 18 May 2014 at 6:41PM

longtermplanner wrote: »

Tell your son that he needs to be paying you more than £200 a month - that is simply unrealistic.

£500 for groceries included two sons that age sounds normal to me. They probably empty the fridge of food within hours of you shopping...

I completely missed the paragraph at the bottom because of the font, I thought it was a signature, hahaha!

I'm not usually an advocate for charging kids rent, probably because my parents always promised to not make me pay rent so long as I'm making an effort in my life. But I would say given your current financial situation, you don't have much of an option but to ask your son who is working full time to contribute more. £200 should be his pure rent costs, he should contribute to electricity and gas and food as much as you can reasonably estimate him to use.

How much is your younger son working? If he's earning around or over £300/350 a month, I would make him pay for his bike finance and his insurance. I've always paid for my own car costs, all my friends have too. I wouldn't expect my parents to pay for me when they can't afford it. If he refuses, sell the bike.

solvencyseeker · 18 May 2014 at 6:55PM

Thanks folks!

We have reduced Son 1's contribution to £200 because we really want him to save and move out and start an independent life (as does he). He has mental health issues but has been coping really well.

I get a lift to and from work from a colleague for £3 a day - (the £60 other cost) which is by far the cheapest option.

Petrol cost is for OH's commute. We think twice about getting in the car/going anywhere for any other purpose.

Moblile costs are for me and 1 son. Stupildly high and a bad decision - we will reduce these asap (imminently - got letters this weekend offering better deals).

Motorbike is son 2's only method of transport. We live rurally and this has enabled him to get a part time job and not rely on us financially.

We are with TalkTalk for our landline/broadband. Our options here are limited as we live rurally (no cable) and have found other providers service very unreliable.

£500 for 4 adults (1 who does manual labour and one who is still growing - both need a lot of calories) and 2 dogs is not unreasonable. We cook from scratch (including bread), and buy all groceries, toileties and cleaning stuff as cheap as possible.

2 days a week we are all out from early until late and we employ dog walker for those 2 days (£20). Not every month but there are other months where we have dog related costs. I would never leave them for hours as I am a responsible owner.

Can anyone advise on the question I posted?

Best way forward?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free