Im debt free but worried about the downturn

marginalone

Hi Folks,

Ive been debt free for 2 years. I have been in fantastic sales job where I can now afford to buy things outright and not run into debt.

Well, due to the downturn I expect a hit on my commission and back on a monthly basic wage £21,600 per year.

I dont own a house single with no kids and rent at £500 pm.

Would you say I am in a good position to survive this credit crunch?

rustybucket

Do you really need to ask this question? I'd have thought the answer was obvious.

marginalone

rustybucket wrote: »

Do you really need to ask this question? I'd have thought the answer was obvious.

Apologies for asking. Its just that I value the feedback from this forum as there are many who have had their highs and lows.

LilacPixie

We will all survive the credit crunch if we just watch thepennies and reduce nonessential spends as required.

Cerisa

lolol I earn about £9000 a year, pay £270 rent...if i can do it you deifnitely can!

hypno06

It depends on what your other expenses are.

Debt free or not, it is dangerous to be complacent about our positions, so you are right to be addressing the issue before it becomes a problem.

I would say that now is an ideal time to revisit your SOA - use Martins budgeting tool to the right of the screen on this site, or use the SOA we encourage newbies to use on the sticky for newcomers at the top of the board.

It will highlight any potential areas that need cutting back or looking at in order that you can stay debt free.

Also, why not set yourself a challenge to save up an "emergency" fund? You might feel a lot more secure if you had a bit to fall back on should the credit crunch last longer than you expect or you take a further drop in income.

Hope that helps!

dux001

marginalone wrote: »

Hi Folks,

Ive been debt free for 2 years. I have been in fantastic sales job where I can now afford to buy things outright and not run into debt.

Well, due to the downturn I expect a hit on my commission and back on a monthly basic wage £21,600 per year.

I dont own a house single with no kids and rent at £500 pm.

Would you say I am in a good position to survive this credit crunch?

Yes, you should easily be able to survive as long as you keep your job.

BUT keep an eye on spending, outgoings etc and keep up the disliplines you learned when getting out of debt. You might find you don't notice the commission dropping.

Finally, congratulate yourself for being savvy enough to keep tabs on your situation - this in itself makes you ten times more likely to be ok.

DoWhatULove-LoveWhatUDo

I am hopeful that we would all survive a financial downturn, but in what bruised and battered condition I wouldn't like to say.

I assume that you have fairly substantial savings so that if you were to be made redundant or the company was to go under you would have a buffer whilst you sought other employment?

The other key factors I would imagine would be what other commitments you have, and whether you can get your spending under control and not continue to spend at the same rate.

The standard advice in this situation is to suggest you post a SOA I believe.

marginalone

Before my rent this month I have between £4000 - £6000 in my bank at any one time ( Im still looking to move to another flat so at least £1000 for moving )

marginalone

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1300

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 123
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 11
Satellite/Cable TV...................... 50
Internet Services....................... 0
Groceries etc. ......................... 70
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 22
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 871

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

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 1,300
Expenses (including secured debts)....... 871
Available for debt repayments........... 429
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ 429

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -0
Net Assets.............................. 0

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========

e.g. the number of adults & children in the household, the number

of cars included in the SOA or anything else that may be useful

pink_princess

that s no where near what you said you earned a year have you miscalculated along the line