Not sure what is the best thing to do next

Notsurewheretogonow

It's my first post here, though I've been lurking for ages trying to make sense of what the best thing to do next is. Anyway, below you'll find my SOA, and in addition to the general advice about what I can cut out of my expenditure, I welcome your comments specifically relating to the following issue.

You'll see that I have a loan which has approx £2,000 outstanding, and which is due to finish in July 2009.

I also am due a bonus of roughly £6,000 which will be paid as a lump sum in my December pay (approx mid month), plus I am currently on a payment holiday from my mortgage which ends in December.

I have thought of the following actions which I will do today :

Ask for Council Tax and water rates to be paid over 12 instead of 10 months
Have a look and see what shuffling I can do with CC debts (looks like I can do some but not too much)
I am looking at changing broadband/phone supplier to reduce the cost of phone calls.
Speak to my mobile phone company and look at getting on a much reduced rate or go PAYG

Some questions :
Is it worth asking for an extension to the mortgage payment holiday to free up some more cash to address the higher rate debts?
Is it worth using the bonus money to pay off debts or should it be kept to tide us over in the coming months? I can't quite get my head round that one.
Is it worth paying off the loan as early as possible to free up £222/month?

Thanks for your help!

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 2678
Partners monthly income after tax....... 300 (slightly variable)
Benefits................................ 169
Other income............................ 175
Total monthly income.................... 3322

Monthly Expense Details
Mortgage................................ 848 (includes endowment payment at 140)
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 121 (over 10 months)
Electricity............................. 41
Gas..................................... 38
Oil..................................... 0
Water rates............................. 44 (over 10 months)
Telephone (land line)................... 35
Mobile phone............................ 55 (2 phones, I know we can make some savings here)
TV Licence.............................. 12
Satellite/Cable TV...................... 38
Internet Services....................... 15
Groceries etc. ......................... 350 (incl cigs)
Clothing................................ 10
Petrol/diesel........................... 140 (2 cars)
Road tax................................ 33 (calculated but not saved for at the moment)
Car Insurance........................... 107
Car maintenance (including MOT)......... 42 (guestimate, though we don't save for this)
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 20
Buildings insurance..................... 19
Contents insurance...................... 19
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1997

Assets
Cash.................................... 500
House value (Gross)..................... 170000
Shares and bonds........................ 300
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 171800

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 114000...(848)......5.75 (fixed for 3 yrs from July 2008)
- currently on a mortgage holiday til December 2008
- includes 110/month endowment
Total secured debts........... 114000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest CC.....................747.......16........0
Overdraft......................1500......0.........15.9
Co-op CC.......................7500......150.......12.9
Family.........................2600......0.........0 (thanks Dad)
Loan...........................2000......222.......6.9 (ends July 2009)
MBNA...........................2750......81........34.9
Marbles........................8533......213.......30.9
Monument CC....................363.......11........29.9
RBS CC.........................6550......147.......23.9
Morg St CC.....................2430......48........23.9
Goldfish CC....................924.......19........21.9
Tesco CC.......................4232......126.......20.9
Cap1 CC........................2333......70........19.9
Amex CC........................4111......103.......18.9
1st Dir CC.....................6052......182.......17.9
Citi CC........................471.......11........16.9
Total unsecured debts..........53096.....1399......-

Monthly Budget Summary
Total monthly income.................... 3,322
Expenses (including secured debts)....... 1,997
Available for debt repayments........... 1,325
Monthly UNsecured debt repayments....... 1,399
Surplus(deficit if negative)............ -74

Personal Balance Sheet Summary
Total assets (things you own)........... 171,800
Total Secured debt...................... -114,000
Total Unsecured debt.................... -53,096
Net Assets.............................. 4,704

In addition to the above I have a property which is rented out which is not included above as I thought it made things confusing.

Description....................Debt......Monthly...APR
Mortgage...................... 80000.....(505)......6.45 (this has been reduced by 0.5% to take into account the BoE BR reduction of 8th Oct, but not the more recent one.
- mortgage payment includes insurance payment of £28/month
Endowment................................(112)
- last years letter said they were on track though I expect this will be different this year!
Maintenance contract on boiler ..........(16)
Rental income.............................500

Total income from rental property.........(133)

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

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

2 adults (1 in full time work, 1 in part time work and looks after kids)
2 kids (1 preschool, 1 in school)

duchy

Seems a bit of a no brainer to me Get rid of some of those cards !! MBNA especially.
Put a grand into an ISA for genuine emergencies and clear some balances off.
I suggest play with the snowball program-and see how much interest you will save yourself paying. I suspect it'll be quite n eyeopener

paybacktime2008

Not an expert but here's my thoughts.

Notsurewheretogonow wrote: »

It's my first post here, though I've been lurking for ages trying to make sense of what the best thing to do next is. Anyway, below you'll find my SOA, and in addition to the general advice about what I can cut out of my expenditure, I welcome your comments specifically relating to the following issue.

You'll see that I have a loan which has approx £2,000 outstanding, and which is due to finish in July 2009.

I also am due a bonus of roughly £6,000 which will be paid as a lump sum in my December pay (approx mid month), plus I am currently on a payment holiday from my mortgage which ends in December.

I have thought of the following actions which I will do today :

Ask for Council Tax and water rates to be paid over 12 instead of 10 months
Have a look and see what shuffling I can do with CC debts (looks like I can do some but not too much)
I am looking at changing broadband/phone supplier to reduce the cost of phone calls.
Speak to my mobile phone company and look at getting on a much reduced rate or go PAYG

Some questions :
Is it worth asking for an extension to the mortgage payment holiday to free up some more cash to address the higher rate debts?
Is it worth using the bonus money to pay off debts or should it be kept to tide us over in the coming months? I can't quite get my head round that one.
Is it worth paying off the loan as early as possible to free up £222/month?

Thanks for your help!

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 2678
Partners monthly income after tax....... 300 (slightly variable)
Benefits................................ 169
Other income............................ 175
Total monthly income.................... 3322

Monthly Expense Details
Mortgage................................ 848 (includes endowment payment at 140)
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 121 (over 10 months)
Electricity............................. 41Very high when u go to bed is everything off?
Gas..................................... 38
Oil..................................... 0
Water rates............................. 44 (over 10 months)
Telephone (land line)................... 35
Mobile phone............................ 55 (2 phones, I know we can make some savings here)
TV Licence.............................. 12
Satellite/Cable TV...................... 38You could reduce this
Internet Services....................... 15
Groceries etc. ......................... 350 (incl cigs)
Clothing................................ 10That isn't enough for 4
Petrol/diesel........................... 140 (2 cars)
Road tax................................ 33 (calculated but not saved for at the moment)
Car Insurance........................... 107Seems a lot
Car maintenance (including MOT)......... 42 (guestimate, though we don't save for this)
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 20
Buildings insurance..................... 19Reckon you could reduce this
Contents insurance...................... 19and this
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1997

Assets
Cash.................................... 500
House value (Gross)..................... 170000
Shares and bonds........................ 300
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 171800

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 114000...(848)......5.75 (fixed for 3 yrs from July 2008)
- currently on a mortgage holiday til December 2008
- includes 110/month endowment
Total secured debts........... 114000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest CC.....................747.......16........0
Overdraft......................1500......0.........15.9
Co-op CC.......................7500......150.......12.9
Family.........................2600......0.........0 (thanks Dad)
Loan...........................2000......222.......6.9 (ends July 2009)
MBNA...........................2750......81........34.9This has to be tackled first
Marbles........................8533......213.......30.9Followed by this
Monument CC....................363.......11........29.9
RBS CC.........................6550......147.......23.9
Morg St CC.....................2430......48........23.9
Goldfish CC....................924.......19........21.9
Tesco CC.......................4232......126.......20.9
Cap1 CC........................2333......70........19.9
Amex CC........................4111......103.......18.9
1st Dir CC.....................6052......182.......17.9
Citi CC........................471.......11........16.9
Total unsecured debts..........53096.....1399......-

Monthly Budget Summary
Total monthly income.................... 3,322
Expenses (including secured debts)....... 1,997
Available for debt repayments........... 1,325
Monthly UNsecured debt repayments....... 1,399
Surplus(deficit if negative)............ -74

Personal Balance Sheet Summary
Total assets (things you own)........... 171,800
Total Secured debt...................... -114,000
Total Unsecured debt.................... -53,096
Net Assets.............................. 4,704

In addition to the above I have a property which is rented out which is not included above as I thought it made things confusing.

Description....................Debt......Monthly...APR
Mortgage...................... 80000.....(505)......6.45 (this has been reduced by 0.5% to take into account the BoE BR reduction of 8th Oct, but not the more recent one.
- mortgage payment includes insurance payment of £28/month
Endowment................................(112)
- last years letter said they were on track though I expect this will be different this year!
Maintenance contract on boiler ..........(16)
Rental income.............................500

Total income from rental property.........(133)

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

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

2 adults (1 in full time work, 1 in part time work and looks after kids)
2 kids (1 preschool, 1 in school)

Personally this is what i would do with the bonus....Pay off momument as psycologically be good to get rid of a small debt. Then MBNA then £500 into an emercy saving account (for car repairs etc) the rest to Marbles.

Good Luck

moo2moo

Use the bonus to pay off your highest card. If you do get £6000 that will clear your MBNA card and knock £3250 off your marbles card reducing it to £5283. Theres no point hanging onto money for a rainy day when you can be using it to get rid of your debts. At that point you should at least break even every month.

Do you have any space within the credit limits on the lower cards to balance transfer some of the blance of the cards with the highest APR?

Do you need £500 in cash? Thats Monument gone with change and one less debt to worry about.

Your car insurance is huge for 2 cars worth £1000 in total. I'm sure you can find a better deal than that. You can also lower your grocery bill each month, although just how far depends how much you smoke.

Satelllite, phone rental, internet and mobiles of £143 a month. You know exactly what I'm going to say. Ditch the satellite, buy a freeview box, get an all inclusive phone deal which includes your internet and reduce your mobile usage to emergency calls only pay as you go.

When does your NatWest 0% deal end?

Numpty_Monkey

Hello:hello:

I'm not much use on the mortgage type things(to complicated):o

I can see a bit of your quandery,
Have you had a look at the snowball calc?
http://www.whatsthecost.com/snowball.aspx?country=uk

You have a lot of other debts at higher APR % than your loan, pay some of them off and the money you were paying on them pay off the next highest APR

Well done on the bonus:T

Have you had a look at the OS board to get your groceries down?
check your insurance and go through a cashback site for a better deal

hth:A

Naomim

Notsurewheretogonow wrote: »

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 2678
Partners monthly income after tax....... 300-Can your partner do more hours once the pre-schooler is at nursery? (slightly variable)
Benefits................................ 169
Other income............................ 175
Total monthly income.................... 3322

Monthly Expense Details
Mortgage................................ 848 (includes endowment payment at 140)
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 121 (over 10 months)
Electricity............................. 41
Gas..................................... 38
Oil..................................... 0
Water rates............................. 44 (over 10 months)
Telephone (land line)................... 35 Really high considering it doesn't include internet or digital TV - see if you can get a package for all 3? I am with Talk Talk and pay £20 a month for phone and internet free day and evening calls.
Mobile phone............................ 55 (2 phones, I know we can make some savings here)
TV Licence.............................. 12
Satellite/Cable TV...................... 38
Internet Services....................... 15
Groceries etc. ......................... 350 (incl cigs)
Clothing................................ 10
Petrol/diesel........................... 140 (2 cars)
Road tax................................ 33 (calculated but not saved for at the moment)
Car Insurance........................... 107 Why is this SO high? Even for two cars is extortionate! Have a look for new insurance using a cashback site like Quidco.
Car maintenance (including MOT)......... 42 (guestimate, though we don't save for this)
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 20
Buildings insurance..................... 19 Are buildings and contents together or seperate? Often get discount for together. Again get new quote and look through cashback sites.
Contents insurance...................... 19
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1997

Assets
Cash.................................... 500
House value (Gross)..................... 170000
Shares and bonds........................ 300
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 171800

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 114000...(848)......5.75 (fixed for 3 yrs from July 2008)
- currently on a mortgage holiday til December 2008
- includes 110/month endowment
Total secured debts........... 114000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest CC.....................747.......16........0
Overdraft......................1500......0.........15.9
Co-op CC.......................7500......150.......12.9
Family.........................2600......0.........0 (thanks Dad)
Loan...........................2000......222.......6.9 (ends July 2009)
MBNA...........................2750......81........34.9 WOAH! This is a priority to get paid off or moved.
Marbles........................8533......213.......30.9 And this one!
Monument CC....................363.......11........29.9
RBS CC.........................6550......147.......23.9
Morg St CC.....................2430......48........23.9
Goldfish CC....................924.......19........21.9
Tesco CC.......................4232......126.......20.9
Cap1 CC........................2333......70........19.9
Amex CC........................4111......103.......18.9
1st Dir CC.....................6052......182.......17.9
Citi CC........................471.......11........16.9
Total unsecured debts..........53096.....1399......-

Monthly Budget Summary
Total monthly income.................... 3,322
Expenses (including secured debts)....... 1,997
Available for debt repayments........... 1,325
Monthly UNsecured debt repayments....... 1,399
Surplus(deficit if negative)............ -74

Personal Balance Sheet Summary
Total assets (things you own)........... 171,800
Total Secured debt...................... -114,000
Total Unsecured debt.................... -53,096
Net Assets.............................. 4,704

In addition to the above I have a property which is rented out which is not included above as I thought it made things confusing.

Description....................Debt......Monthly...APR
Mortgage...................... 80000.....(505)......6.45 (this has been reduced by 0.5% to take into account the BoE BR reduction of 8th Oct, but not the more recent one.
- mortgage payment includes insurance payment of £28/month
Endowment................................(112)
- last years letter said they were on track though I expect this will be different this year!
Maintenance contract on boiler ..........(16)
Rental income.............................500

Total income from rental property.........(133)

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

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

2 adults (1 in full time work, 1 in part time work and looks after kids)
2 kids (1 preschool, 1 in school)

Hi,

I've put some comments in red for you. I hope you don't think I am being too harsh. You really need to get these debts into a snowball calculator so you can see which one's to clear first.

http://www.whatsthecost.com/snowball.aspx

Can I ask about the mortgage holiday? What are you doing with the money you would have paid? With the bonus, I would definitely put a bit (1k) into an ISA or high interest savings account (one you can withdraw from if you need to) and put the rest against the marbles or mbna cc's.

You have a 2nd property but are making a loss, is that right? Can you put up the rent to at least cover your monthly outgoings? Otherwise I would suggest selling.

I hope this helps

Naomi

HelzBelz

Notsurewheretogonow wrote: »

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest CC.....................747.......16........0
Overdraft......................1500......0.........15.9
Co-op CC.......................7500......150.......12.9
Family.........................2600......0.........0 (thanks Dad)
Loan...........................2000......222.......6.9 (ends July 2009)
MBNA...........................2750......81........34.9
Marbles........................8533......213.......30.9
Monument CC....................363.......11........29.9
RBS CC.........................6550......147.......23.9
Morg St CC.....................2430......48........23.9
Goldfish CC....................924.......19........21.9
Tesco CC.......................4232......126.......20.9
Cap1 CC........................2333......70........19.9
Amex CC........................4111......103.......18.9
1st Dir CC.....................6052......182.......17.9
Citi CC........................471.......11........16.9
Total unsecured debts..........53096.....1399......-

With the credit cards you need to only be paying the minimum repayment on all the cards except the one with the highest APR (in your case MBNA at 34.9%:eek:) which you pay as much off per month as you can, then when that is payed off CUT IT UP and move on to the card with the next highest rate (Marbles, then Monument etc etc) It might look like your not reducing your debts as quickly because the debt on most of the cards won't be dropping as quickly, but you will actually be saving money as you won't be paying the higher interest rates for as long.

Then when you get your bonus (lucky thing:beer:) if you think you want to keep a little safety net of £500 of so put it somewhere you can get at it but that is getting a good rate of interest, then use the remainder towards the high rate CC you are paying at the time.

GeorgeUK

Electricity............................. 41
Gas..................................... 38
Check you are getting a good deal - look at some comparison sites to compare.
Mobile phone............................ 55 (2 phones, I know we can make some savings here)
PAYG!!

Telephone (land line)................... 35
Satellite/Cable TV...................... 38
Internet Services....................... 15
Are these on a package?

Groceries etc. ......................... 350 (incl cigs)
Have you moved down a brand? (shops own) Have a look at the old style board for mealplan ideas.

Car Insurance........................... 107
Pet insurance/vet bills................. 20
Buildings insurance..................... 19
Contents insurance...................... 19
Life assurance ......................... 10
Again, compare what you are getting and what others are offering (uswitch, moneysupermarket)

For the cards, it might be worth paying the minimum to all and trying to clear the 2 smallest balances first. Once you get a nil balance, some cards offer existing customers incentives to keep the card open (0% for 6 months or low interest life of balance offer). If you can do this, then you may be able to either transfer some of the higher APR debts or clear another card and repeat the process. I was going to suggest possibly getting another 0% card to transfer to, but i think you have most of them there.

dancingfairy

Right o.k Let's see:
Mortgage................................ 848 (includes endowment payment at 140)
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 121 (over 10 months)12 months if possible -makes budgetting easier - though not all councils let you despite their being a legal precedent that says you can pay over 12 months - depends on how much you want to argue with the council to be fair. See what they say.
Electricity............................. 41 energy saving bulbs throught, don't leave lights on, turn things off standby except fridge/freezer. See how much you can cut this - oh and look to see if you can save by switching.
Gas..................................... 38
Oil..................................... 0
Water rates............................. 44 (over 10 months)don't think you can pay over 12 months - but worth a shot.
Telephone (land line)................... 35
Mobile phone............................ 55 (2 phones, I know we can make some savings here) yep get onto them and get those contracts reduced - see what other companies are offering and get your company to match /better it - preferrably same or more minutes for less cost.
TV Licence.............................. 12
Satellite/Cable TV...................... 38 um with 53000 in unsecured debt plus 2 mortgages - it's gotta go - go freeview or get it bundled with phone and internet with virgin/(think sky do similar).
Internet Services....................... 15
Groceries etc. ......................... 350 (incl cigs)head to oldstyle and see how much you can get this down. Try menu planning and batch cooking.
Clothing................................ 10 not really enough here.
Petrol/diesel........................... 140 (2 cars)
Road tax................................ 33 (calculated but not saved for at the moment)
Car Insurance........................... 107
Car maintenance (including MOT)......... 42 (guestimate, though we don't save for this)
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0 no childcare costs?
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15 would a season ticket for prescriptions help you out at all?
Pet insurance/vet bills................. 20
Buildings insurance..................... 19 are these the best deal? shop around and check out cashback sites and lookout for combined deals in case they are cheaper.
Contents insurance...................... 19 see above
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25 can you cut this?? get creative, buy when stuff on sale, get BOGOFS for gifts etc - recycle unwanted presents - just don't give back to person who gave them to you - lol!
Haircuts................................ 10
Entertainment........................... 0 is this realistic?? perhaps it would be better to allow a small figure?
Holiday................................. 0


O.k well you seem to be overspending by about 200 a month - personally I think it may be more than that. that's 74 a month based on your SOA, 133 a month you are subsidising your rental property by plus any other bits and bobs you haven't accounted for ie crisps/coke/lunches at work/ the 'odd' cd/dvd/cinema trip/meal out/new clothes/bottled water etc.
You do however have plenty of room for maneouvre and you have a lot of areas for potential cutbacks.
You also need to be prepared for the fact your endowments may not be able to pay off your mortgages so paying off as much debt as possible will give you more options if this is unfortunately the case.

I think I would save 1000 for emergencys and then use the rest to pay off the debts starting with the highest one first ie MBNA and Marbles - once you have cleared these they may well offer you 0% deals (or special offers) which you can switch the debt to from higher interest rates. Have you got any space on the co-op or natwest you can transfer to?

Oh I would also keep a spending diary to see where all the money is going on a day to day basis.

Good Luck
df x

dancingfairy

In answer to the specific questions - hmmm - you want to take a longer mortgage holiday? What have you done with all the money you have saved doing this so far? have you paid it off debts?? You are likely to get yourself into more trouble doing this - how disciplined are you? You may well end up paying more over the life of the mortgage than you would save- not sure how it would work out.
Keeping the bonus to tide you over? well the amount you would be earning on the savings would be significantly dwarfed by the amount of interest you will be acruing so unless you are at a high risk of losing your job this would probably not be a good way of using the money - plus you run the risk of dipping into it and not having it available to repay debts.
Paying the loan off - yes it's a good idea but as it is not the highest rate of interest you should concentrate on the cc's first. Also some loans don't allow you to overpay so this might not help.

Tete_en_l'Air

Hi and welcome, hope you feel a bit better for having it all down in front of you in black and white. I'm by no means an expert, but here's a couple of points:

Everyone's right, you should definitely have a good look at the snowball calculator to see which debts to throw the most at first, however, if I were you I'd be tempted to pay off the Monument and Citi cards in one fell swoop. It'll simplify things a bit straight away and be a great psychological boost to cross these off your list.

With regards to mobile bills- I've been on PAYG for years but have just signed up to a SIM-only deal with O2. It's £10 per month for 150 mins and 300 texts, but you can get other deals for £15, £20... If you're mainly calling each other while you're at work and your partner's at home I think the £15 deal included unlimited O2-O2 calls.

Good luck!!