Newbies - spending more than we earn

Rache_2

Warning: the amounts are HIGH, reflecting our income and the lifestyle we thought we could afford. Please pick me me up on the most ridiculous figures and I'll try to explain as best I can.

Monthly Incomings:

My salary - £3,100
Partners salary - £2,273
Child Benefit - £68
Gifts from family - £125 (H's family are generous with birthday presents!)

Total - £5,566

Monthly Outgoings:
We've based this on averages from last year's spending - I keep track on MS Money - and guesstimates

Mortgage - £1,983 (variable rate Cheltenham & Gloucester 5.45%)
Household Maintenance/Repairs - £252
Home & Contents Insurance (MoreThan) - £47
Council Tax - £121
Water - £14
Gas - £20
Electricity - £43
Phone - £17
Internet (Broadband) - £28 (Wanadoo 576kbps)
Mobile Phone - £60
Cleaning Products - £15
Dry Cleaning - £13
Garden - £12
Other "Home" - £192

My professional insurance (tax deductable; non reimbursed) - £435
Decreasing Level Term Life Assurance (Mortgage Protection) - £27
Critical Illness Insurance - £35
Washing Machine Warranty £12

Food - £300
Eating Out - £110
Coffee/Lunch @ work - £142
Car Insurance - £32.53
Drinking Out - £17

Travelcard - £181
Other Travel (mostly visiting family) - £38
Car Insurance - his - £85
Car Insurance - mine - £33
Tax - both - £26
Petrol - £88
Parking - £34
RAC membership - £5
Car repairs etc - £25

Bank Charges - £74
Total Minimum Payments currently on credit cards - £350
Student Loan - £144

Direct Debit into 8% savings account (!) - £50

Childcare - £463
Baby - nappies, clothes etc - £88

RHS Membership - £9
Books - £109
TV Licence - £11
DVD Rental - £15

Christmas Miscellaneous - £25
Summer Holiday - £100
Gifts (Xmas/Birthday) - £78

Clothes £175

Courses, classes etc for my work - £25

Charity Donations - £30
Newspapers & Magazines - £25
Dentist - £31
Optician - £21
Hair - £25
Beauty/Salon/Face Creams etc - £29

Total Outgoings - £6,428

Debts

Student Loan - £3550 (APR 2.3%; due to finish some time in 2007)
HSBC Overdraft - £9099 (APR about 15% I think - will check - definitely priciest; overdraft limit £10,000)
HSBC Mastercard - £9010 (APR 6.7% ?for how long - will check; credit limit £10,000))
John Lewis Mastercard - £218 (APR 13%), Credit Limit £7000
M&S Mastercard - £400ish (ApR 14.9%), Credit Limit £5000

£22,277 ish

Savings

£2275 in HSBC 8% regular saver (not for long....)

Little_Miss_Winner

Hi There.

After a quick look at your SOA, these for me would be the first to go;-

Eating Out - £110
Coffee/Lunch @ work - £142
Drinking Out - £17
Clothes £175
Charity Donations - £30
Newspapers & Magazines - £25
Hair - £25
Beauty/Salon/Face Creams etc - £29

These alone add up to £553 per month
Why can't you both take packed lunches to work, then you won't need to eat out?
You shouldn't be sending £30 to charity when you are £22k in debt!
You have already mentioned cutting out the mags and papers - so thats good.
£54 on hair and beauty, thats £648 per year.

If you start by knocking off all the above you would save £6,636.

You don't need any of them.

I will be back when I have studied your list in detail, but for now the above would really make a difference to your disposable monies.

Hope I haven't/upset or offended you.

Love
pot
xx

Little_Miss_Winner

Rache,

You are also spending £515 on travel each month. Thats for 2 cars, ins, tax, petrol, rac.

Whats/ whos the travelcard for????

love
pot
x

Quasar

LOL, getting rid of the newspaper expenditure is the first thing I did when joining this site, and I wasn't in debt anyway!

Moving your debt to cheaper lenders is a good start, and if you keep surfing this site you will find hundreds of tips on how to reduce your expenditure without feeling the strain too much, as you have already admitted to yourself that you fell in the "must have" trap.

Here with us you will develop the "I can have it but do I really want it or need it?" mindset.

And take heart: your debts are nothing compared to those of some members here, who have found plenty of advice and motivation, and are now beginning to see the light at the end of the tunnel. You have far less to overcome, and I'm sure you and your husband will come to grips with your finances in no time.

Welcome and good luck!

tomstickland

The mortgage payments are a large proportion of your income. It would be worth checking out some better deals there I think.

What does £250 for household repairs/maintenance pay for?

Rache_2

potogold wrote:

Hi There.

After a quick look at your SOA, these for me would be the first to go;-

Eating Out - £110
Coffee/Lunch @ work - £142
Drinking Out - £17
Clothes £175
Charity Donations - £30
Newspapers & Magazines - £25
Hair - £25
Beauty/Salon/Face Creams etc - £29

These alone add up to £553 per month
Why can't you both take packed lunches to work, then you won't need to eat out?
You shouldn't be sending £30 to charity when you are £22k in debt!
You have already mentioned cutting out the mags and papers - so thats good.
£54 on hair and beauty, thats £648 per year.

If you start by knocking off all the above you would save £6,636.

You don't need any of them.

I will be back when I have studied your list in detail, but for now the above would really make a difference to your disposable monies.

Hope I haven't/upset or offended you.

Love
pot
xx

Not offended in the slightest - I would not have posted them if I was easily offended. I know a lot of this is completely indulgent and unnecessary - it's fantastic to get the outside opinion.

Eating Out - £110 we have already stopped this
Coffee/Lunch @ work - £142 and this
Drinking Out - £17 and this
Clothes £175 and this (all for the foreseeable future)
Charity Donations - £30 this is a slight problem - I have "Adopted a Granny" in Sri Lanka; my H has a sponsored child in China, who writes to him etc etc. Would be really hard to break this off. We can save £6 which is another direct debit; but if we can we'd love to keep these on.
Newspapers & Magazines - £25 ok - an easy saving
Hair - £25 we can't cut it down to nothing - both of us need to look smart in our jobs - but agreed we should be getting it done far less often and spending less each time (I don't have my hair coloured any more, and have grown it long so it only needs cut 4 times a year ish)
Beauty/Salon/Face Creams etc - £29 Agreed. We will be spending the minimum on v cheap toiletries from now on

Rache_2

potogold wrote:

You are also spending £515 on travel each month. Thats for 2 cars, ins, tax, petrol, rac.

Whats/ whos the travelcard for????

My husband commutes - so he drives to the station, parks, then gets the train into London (the Travelcard is for him). I drive to work more locally, dropping my son off at nursery on the way, and use my car at work too. We live in the country - no public transport.

Rache_2

tomstickland wrote:

The mortgage payments are a large proportion of your income. It would be worth checking out some better deals there I think.

What does £250 for household repairs/maintenance pay for?

Thanks for your advice:

re mortgage - it's difficult as the mortgage was taken out out when my husband was earning far more - and based on his income alone (we thought: even if he has a lean year then my income will help with that). We didn't count on just how "lean" it would get. His income has subsequently dropped by almost 2/3. He was doing very well indeed - hence the old, hgh maintenance house in the country. Since then, I have become self employed - so although I now have the better salary, I haven't been self employed long enough to prove a regular income. I think we're stuck with this for the short-medium term - we always planned to switch to a fixed rate as soon as we could, anyway.

The repairs were a long overdue paint job on the windows of the house - if we'd left it any longer it would have been far more expensive in the long run. Oh and the boiler broke and needed replacing. We'll obviously only be doing immediately necessary repairs for the foreseeable future but it would be silly to pretend that an old house isn't going to need even a bit of upkeep for the next few years, as we try to reduce our debt.

We had "The Talk" again last night - we both agreed that if we really, really try our absolute hardest to cut right back and pay off our debts, and it still isn't working, we'll have to consider seriously whether or not we can afford to live in this house. It would break our hearts, but there's no point dwelling on that. There is a possibility that my income is going to rise by 30-40% over the next 2-3 years, which would mean that the mortgage would (we hope) become less oppressive.

JAMIEDODGER

dont know if youve realised rache but you have listed tv licence twice in your soa. dont know if that would mean a minor adjustment to your figures or just a typo xx

Rache_2

No it was a typo (sadly!) Thanks