Former Spice's SOA

Former_Spice

Well here goes. I have gone through Martins spreadsheet and come to the following. Negatives .

I owe £34K on CC's plus 6.4K on Barclays Advance and I spend £700 a month more than I earn.

On the other hand....

A lof that debt is at low APR's.
I have a tiny mortgage with £70K equity and only about £27K outstanding on it with 17 years to go,
An unblemished credit history except for the minor problem of the £34K on CC's. There is scope for for savings.

Salary just short of £21K which is £1271 after tax, pension etc..

Mortgage/Rent: £220.00
Buildings & Contents Insurance: £14.17
Recently searched around for the best quote on this and save over £100 a year.
Bank Account Fee:
Overdraft Cost: £58.00
This is the interest on the Advance account at around 11.9 APR. I also have a 5K overdraft facility which is £400 in credit on payday.
Council Tax: £71.00 Over 10 months I think.
Water Rates/Meter: £13.00
Got a meter 4 months ago and have only used 9 units so far so even at less that half it was 'estimated' at they are still overcharging me (they haven't read the meter yet).
Gas £40.00
Electricity £22.00
Total £62 for both on Scottish Power fixed till Aug 09 offer in a two bed terrace.
Household Maintenance: £16.67
Roughly based on what I have spent since moving here on tradesman divide up. With hindsight I think that's a bit low.
Garden Maintenance £0.42
Cleaning Products/Cleaner £5.00
Home Phone £12.00
Only need it for the Internet Internet £23.00
Used to be with Tiscali who were cheap but the service was :mad: :mad: so moved to a good ISP.
TV Licence £12.00
Mobile Phone £1.00
PAYG hardly ever used.

Food and Household Shopping £150.00
That figure was a guess and may be a bit high. I used to be rubbish at food shopping, but now following Martin's advice. Using supermarkets not overpriced shops that I used to use :eek: Going down brands, mostly buying Asda's own brand and some smart price and always on the lookout for offers.
Eating Out £10.00
Once a month Coffees/Sandwiches/Snacks
Stopped doing that
Drinks for Home £240.00
The first of the BIG ones.
I KNOW, I KNOW, I KNOW and it was not bottles of champagne. Determined to get this way down, didn't drink yesterday which is a start, may go on the alcohol thread about this one.
Drinking Out £10.00

Breakdown Cover/Roadside Recovery £6.67
Let them renew it automatically without comparing cover or thinking about whether I need it. DOH!
Rail/Bus/Coach/Taxi Car Maintenance £16.67
Car Insurance £21.50
Car Tax £15.00
Parking Petrol/Diesel £40.00
Following Martins recent advice to get this down, along with using bike, foot for short journeys.
This whole motoring section is the second of the BIG ones. I can't honestly say that I 'need' a car. Work is around a 40 minute walk or a ten minute bike ride mostly on a cycle path and I can use the net for just about all shopping. I would miss having it, a big decision to make to live without a car and public transport is hardly cheap at 60p a mile to take a bus. Maybe that's just making excuses.

Credit Card Repayments £740.00
THE HUGE ONE!
4.5k with MBNA at 0% till March. 30K between 7 cards at life of balance APR's mostly at 5.9 and 6.9%
10.5K more available credit with MBNA between 2 cards, another 10K available credit with Cahoot which I use either for credit card shuffling or regular spending payed off in full.
I have calculated that I am paying off close to 1.5% a month off the balance as a lot of the of payments are going to clear the balance rather than high APR's or rip off late payment charges so the balances and minimum payments will go down to an affordable level AS LONG AS I MAKE THE PAYMENTS until then.

DVD/Video Rental IT/Computing (eg Anti-virus etc)
Hobbies £25.98
Pet Costs
Shopping for Fun
Big Days Out
Books/Music/Films/Computer Games £20.00
Cinema/Theatre Trips £12.00
Cineworld Unlimited pass
Family Days Out
Satellite/Digital TV Subscription £31.00
Recently cut the movies and some of other channels that I didn't watch.

So, in summary I have built up a financial stack of cards that is still balanced but has the potential to topple over spectacularly! Really need to avoid it falling over. Any constructive advice would be appreciated.

RAS

Former_Spice wrote: »

I spend £700 a month more than I earn.

Former_Spice wrote: »

So, in summary I have built up a financial stack of cards that is still balanced but has the potential to topple over spectacularly! Really need to avoid it falling over.

Welcome.

Will have a look as the SOA in a minute, but you need to undertand that this situation is not finely balanced. If you are spending £700 per month more than you are earning, then you are in trouble.

How are you currently paying the deficit, by stacking even more on the credit cards?

RAS

Former_Spice wrote: »

I have a tiny mortgage with £70K equity and only about £27K outstanding on it with 17 years to go,
An unblemished credit history except for the minor problem of the £34K on CC's. There is scope for for savings.

Salary £1271 after tax, pension etc..

Mortgage/Rent: £220.00 - is this repayment or interest only?
Buildings & Contents Insurance: £14.17
Council Tax: £71.00 Over 10 months I think. _ can you pay over 12 months?
Water Rates/Meter: £13.00 - when will they read the meter?
Gas £40.00
Electricity £22.00
Household Maintenance: £16.67
Roughly based on what I have spent since moving here on tradesman divide up. With hindsight I think that's a bit low. you need to restrict yourself to maintenance at the moment. No improvements
Garden Maintenance £0.42
Cleaning Products/Cleaner £5.00
Home Phone £12.00
Only need it for the Internet Internet £23.00
TV Licence £12.00
Mobile Phone £1.00 PAYG hardly ever used.
Food and Household Shopping £150.00

Breakdown Cover/Roadside Recovery £6.67
Rail/Bus/Coach/Taxi Car Maintenance £16.67
Car Insurance £21.50
Car Tax £15.00
Parking Petrol/Diesel £40.00

Total household and car costs 685.10

Entertainment

Eating Out £10.00
Drinks for Home £240.00
The first of the BIG ones.
I KNOW, I KNOW, I KNOW and it was not bottles of champagne. Determined to get this way down, didn't drink yesterday which is a start, may go on the alcohol thread about this one.
Drinking Out £10.00
Hobbies £25.98
Books/Music/Films/Computer Games £20.00
Cinema/Theatre Trips £12.00 Cineworld Unlimited pass
Satellite/Digital TV Subscription £31.00

Total Entertainment £348.98

Debts
OD - £4.400 Bank 11.9 APR Account Fee: Overdraft Cost: £58.00
Credit Card Repayments £740.00
THE HUGE ONE!
4.5k with MBNA at 0% till March.

30K between 7 cards at life of balance APR's mostly at 5.9 and 6.9%

10.5K more available credit with MBNA between 2 cards,
another 10K available credit with Cahoot which I use either for credit card shuffling or regular spending payed off in full.

When you have paid all your living costs (£685.10), you do not have enough money in the budget to pay your credit carda and bank charges

Available for debt payments - £585.90 if you cut out all the entertainment
Payments required - £798

If you do not you cut out the entertainment, you only have £236.92 to pay three times that much in debt payments each month.

You need to talk to one of the debt charities urgently.

As strategies to sort this out.

Since you have a second bedroom, can you take a lodger. Tghis is tax free upto £370 per month. That would make a huge difference.

You need to cut out everything in the entertainment section. You seem to be drinking about two bottles of wine a day, so please seek advice from one of the alcholol support groups if you need it.

Get rid of the car. Use the sale price to reduce the overdraft, which seems to be your most expensive debt. And it frees up another £100 per month towards your debt payments.

if you are on your own, then cut the grocery bill back to £100.

Consider going interest only on the mortage for 6 months.

Former_Spice

Thanks RAS,

Mortgage is repayment, at I think about 7APR that it is now, what would that save. About £70?

Definately can get the shopping one down.

As for alcohol, left cash and cards at work to avoid any chance for the next three days then I will go on from there.

The shortfall between outgoings and earnings went on LOB offers that Mint and MSDW offered me a few months ago then the advance account. I am aware that my options to do this will run out.

I guess part of the first post was trying to be positive in that I am still only paying about £200 in interest charges outside of the mortgage and that the total overall debt of unsecured and secured is three times pay which doesn't sound that bad but in other ways it is.

RAS

Hi

Sorry if I sounded a bit harsh. Well done for actually getting it up there and for being honest about the situation. Sometimes peope posts with SOAs that show £100s of pounds surplus each month, and say that they have not got enough to expenditure.

What do you think to to losing the car, taking a lodger?

Re the interest only, if you cannot get the rest of the budget to match, then that is what you need to do.

Former_Spice

Well, I have spent most of Friday night working on spreadsheets and looking at statements. Don't I know how to have a good time!

I have decided to sell the car which will reduce some of the overdraft. I also get about £200 from the insurance back. I work at the Environment Agency, I can tell people I am doing it to reduce my carbon footprint! This also means cutting out some of the entertainment and the gym membership.

Very hestitant about taking in a lodger, I like my privacy too much.

The CC payments actually total £860 to start with but they will fall to £719 in a year.

I would be paying off a wopping big £700 a month off the balances initially of the CC's as most of it comes off the balance not swallowed up in charges but the effect of that is to increase my overdraft by £200 a month. Which in some ways fits into Martins definition of debt crisis, even though I am reducing the overall debt by a net £500 a month.

In a best case scenario that could happen in 3 years time, I would start to reduce both the overdraft and the cards as the CC payments come down to around £500. The total available credit of both the Advance account and the actual overdraft is 12K so I will be hopefully be able to stay well within that.

I have also considered stopping my pension which would save me about £1200 a year now but would cost me £350 a year from age 65 (adjusted for inflation). I would also pay tax and I think NI on that so would be a gain of about £70 a month.

RAS

Hi Spice

Can you look at the following - the debt remedy on the CCCS website.

The snowball on www.whatsthecost.com. This tell you how long it will take to clear the debt and how much interest you will pay.

With respect to the lodger, options might include:

Week day lodging only - usually Monday to Thursday
Temporary accomodation - say 1 to 6 months for people moving into the area or on short jobs
Theatre lodging, for the duration of rehearsals and the show.

If you think of it as short -term, maybe for one year only, it could make a huge difference to your situation in the next year.

Horace

Remember when taking in lodgers you can get references and find one suitable.

Your entertainment budget is high - join the library (its free) and borrow books and DVDS and music.

Combine your TV/Internet/Phone into one package - Virgin do one for £30.

£240 is a lot to spend on drinks at home and then you pay £10 for drinks when you are out - see if you can cut this down.

Stop paying for a cleaner and do it yourself. Also if you live on your own you should be able to get the grocery budget down from £150 too - check out the moneysaving oldstyle board for tips on meal planning.

Sell stuff - have a clear out and sell stuff you no longer use on ebay or at a carboot.

Sometimes you can pick up free cinema tickets on the freebies board so there's no need to waste £12 on a cinema pass.

You need to keep a spending diary so you can see where you are frittering money away eg. lunches at work, drinks, newspapers, coffees out etc. Write a shopping list each week after first checking to see what food etc you have and what you have run out of (only buy the things that you have run out of) if you don't get it that week then put it onto the next week. Do your shopping in places like Lidl.