Am I doing the right thing?

Nishka

:rolleyes:

Hi everyone, I am new :j

My husband and I are in a reasonable amount of debt and I am trying to dig ourselves out of the hole we are in. It's quite embarassing really because we both work full time and we own our house outright (no mortgage or rent so I don't know how we have got in this mess - or rather, I do, it's me overspending - and sometimes him... but anyway :rolleyes: )

Incomings - Monthly
His earnings (after tax) £1300
Mine - £900
Child Tax Credits - £40
Child maintenance from my ex for dd aged 5 - £200

We are roughly £7,000 in debt with a personal loan from Tescos at about 6% APR which the repayments are £137 a month - I have looked into reducing this but this is the best rate I have been able to be quoted for.

We are going to be £3000 in debt to Egg at 0% interest which I shifted over from our overdraft to pay this off because we were being charged interest on this from the Halifax. I don't know whether that was the right thing to do but I suppose we will be saving money there in terms of the interest. I am going to reduce our overdraft to £200 (from £5000) in order to try and discourage us from getting into it all the time (which is what seems to happen again and again - we paid off £3000 a couple of months ago from an Icesave account we have just before it all went bust!)

We don't have massive outgoings -
£800 on food (I realise this might seem very high but my mum and husband have food probs and require special diet foods which are more expensive and I am allergic to milk so I have to have soya milk! What a lot we are!) and petrol (me and hubs live with my mum who we support since she owns most of our house so we pay the bills as a sort of payment towards it etc - we intend to live with her forever - she has health probs, we also have our 5 year old).
£180 on oil (we try to cut down on this but I find it impossible - I have thyroid and pituitary probs and am under a consultant for this and it makes me ill to be cold even with 3 jumpers on!!)
£65 water
£75 electric
£137 the Tesco loan
Whatever the min repayment will be with Egg Card shortly
£70 travel for me
£128 travel husband (needs to get train to work)
£20 various house insurances
I try and save £30 a month into a Halifax savings account - which at 3.56% I think I could perhaps do better but then I read that if you are in debt you shouldn't be saving???
£36 a month paying back sofas we brought - this ends next year
£60 a month Orange phone bills (I recently swapped mine to a cheaper deal to £20 a month from £40, my husband is going to do the same shortly).
£18 a month contact lenses (I need specific ones from the optician because I have eye probs due to the thyroid probs I have - I have searched online and cannot find them).

We don't pay mobile phone insurance anymore - is that right?

And I haven't taken out insurance on the Egg card although I am wondering whether that was the right thing to do either??

I am a bit confused. But trying!!!!!!!!

I know a lot of our troubles are just down to overspending - and also we had our roof give in 2 months ago which cost us £2000 to fix and some other home improvements etc. :rolleyes:

Any comments or help greatly appreciated! :T

~Beanie~

I know you say that your mum and hubby have a special diet but £800 per month on food is astronomical :eek: That's roughly £200 a week EACH, including your 5 year old!!!

Have you tried completing a proper SOA, it may help. You can do it here: http://www.makesenseofcards.co.uk/soacalc.html

Nishka

~Beanie~ wrote: »

I know you say that your mum and hubby have a special diet but £800 per month on food is astronomical :eek: That's roughly £200 a week EACH, including your 5 year old!!!

Have you tried completing a proper SOA, it may help. You can do it here: http://www.makesenseofcards.co.uk/soacalc.html

Yep I know... But it's not each - its £200 a week on food and petrol. Not each person = £200!

But we have tried to reduce it and we just can't so I would rather try and work out a budget around that rather than trying to reduce that if you see what I mean.. and it includes petrol don't forget and we live rurally.

I have just phoned Tesco and our outstanding loan is actually £14,000 so I was well off there. Eeek. It will be paid off in 2017.

Oh dear.

dancingfairy

I think you need to a fuller SOA as suggested by Beanie - you need to count everything - budgetting for any holidays/presents/haircuts/entertainment etc.
The food bill is aboslutely huge and I have no doubt that if you head over to the MoneySavingOldstyle board they will be able to give you loads of hints and tips. Tell them how many you are feeding and who is alergic to what and I would be extremely surprised if they can't drastically reduce your food bill for you.
What's 70 travel for you? bus tickets/train tickets/petrol/contribution to a car share??
A few things to get you started.
df

~Beanie~

Oops... I did mean £200 per month each, not per week!!

And if that includes petrol, what are the £70 and £128 travel costs for?

Nishka

Well I did the link and here it is and I feel even worse now because according to this we should have lots of money left over - and we don't!

Obviously i haven't included all my clothes etc spending - which is where I expect the money is going... Perhaps...

I feel really embarassed about it.
Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 900
Partners monthly income after tax....... 1300
Benefits................................ 110
Other income............................ 200
Total monthly income.................... 2510

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 128
Electricity............................. 75
Gas..................................... 0
Oil..................................... 180
Water rates............................. 65
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 11
Satellite/Cable TV...................... 58
Internet Services....................... 0
Groceries etc. ......................... 800
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 198
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 18
Pet insurance/vet bills................. 0
Buildings insurance..................... 7
Contents insurance...................... 7
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 30
Total monthly expenses.................. 1637

Assets
Cash.................................... 0
House value (Gross)..................... 240000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 240000

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................14000.....137.......6
Egg card ......................3000......75........0
Total unsecured debts..........17000.....212.......-

Monthly Budget Summary
Total monthly income.................... 2,510
Expenses (including secured debts)....... 1,637
Available for debt repayments........... 873
Monthly UNsecured debt repayments....... 212
Surplus(deficit if negative)............ 661

Personal Balance Sheet Summary
Total assets (things you own)........... 240,000
Total Secured debt...................... -0
Total Unsecured debt.................... -17,000
Net Assets.............................. 223,000

Created using the SOA calculator at https://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.

dancingfairy

O.K a few more thoughts:
£65 water
£75 electric if you can't reduce due to health problems have you looked at switching tariffs or even suppliers?
£137 the Tesco loan
Whatever the min repayment will be with Egg Card shortly
£70 travel for me
£128 travel husband (needs to get train to work) have you looked on Martins article on cheap train travel - there are lots of different suggestions.
£20 various house insurances doesn't sound too bad - can you split them and have you got enough cover?
Have you got life insurance or anything like that?
I try and save £30 a month into a Halifax savings account - which at 3.56% I think I could perhaps do better but then I read that if you are in debt you shouldn't be saving???
£36 a month paying back sofas we brought - this ends next year
£60 a month Orange phone bills (I recently swapped mine to a cheaper deal to £20 a month from £40, my husband is going to do the same shortly).
£18 a month contact lenses (I need specific ones from the optician because I have eye probs due to the thyroid probs I have - I have searched online and cannot find them).

O.K - phone insurance - the question is how much will it cost you, what benefits will it provide and do you think you are a high risk of losing your mobile? For most people it is not worth it but it all depends on your circumstances.

Savings - I Can see why it is attractive to have some savings - how much have you got. You need to strike a balance between having some for emergencies and obviously trying to pay your debts down. However if you are going to have some I look at putting them in an ISA as this means you will get the interest tax free - they are just tax free savings accounts to be honest.
df

Nishka

~Beanie~ wrote: »

Oops... I did mean £200 per month each, not per week!!

And if that includes petrol, what are the £70 and £128 travel costs for?

My husband gets the train into work - he doesn't drive. We pay petrol for my mum who looks after dd for me while I am at work (we don't pay childcare - my mum is our childcare). She pays the rest of the car expenses but we all benefit from the car as we live in South Norfolk and you can't get public transport everywhere.

The other £70 is my coach fare or train fare to London and back once a month to pick up dd from her dads (he does it one way and I do it the other). I try and pre book as much as possible to save money but his work is unreliable so often I don't know until the day before exactly when he is going to have her. It works out about £50 for the train fares / coach fares (she is 5 so not free) and I usually spend £20 on a taxi from South London to the central London train station because all the messing about on the tubes is too much for a 5 year old in my opinion when it's a long enough day as it is (4 hours stuck on coach or 2 hours on train plus 2 hours messing about to get up from South London).

dancingfairy

At least on paper you have a surplus - some people don't even have one on paper. At least you can nip this in the bud before things get any worse.
Your task is to track down where that spare 661 pounds a month is going - it's obviously slipping through your fingers. You may find it more realistic to put a budget in for clothing and there may be bits and pieces you have missed off your SOA but the rest is probably going on newspapers/magazines/cd'd/dvd's/coke/pints after work/lunch at work/cigarettes/choc bars etc etc - most people find it disappears on these things. You need to start a spending diary for a while and note down where every penny is going and then you can see where any savings can be made and what you are prepared to give up.
Oh and sky is an easy saving to be made - can you reduce the package at all? or cancel and just use it as a freeview box - are you really getting your moneys worth?
Best of Luck
df

GeorgeUK

No rent/mortgage?
Electricity & Oil is a bit high - check you are getting a good deal via the price comparison sites (uswitch, moneysupermarket)
Mobile - PAYG?
Satellite - Does this include phone and internet as part of a package? What about freeview?
Groceries - for one month? How many people is this for - just 2?
Have a look at the old style board for meal plans and recipies. Have you moved down a brand?
Need a little for entertainment.

It might be worthwhile keeping a spending diary so you know where all your money is going and can find cheaper alternatives for some spending.

Nishka

£65 water
£75 electric if you can't reduce due to health problems have you looked at switching tariffs or even suppliers? Thanks for your ideas. I will look into this.
£137 the Tesco loan
Whatever the min repayment will be with Egg Card shortly
£70 travel for me
£128 travel husband (needs to get train to work) have you looked on Martins article on cheap train travel - there are lots of different suggestions. Thank you, I haven't seen that - I will go and search now.
£20 various house insurances doesn't sound too bad - can you split them and have you got enough cover? I hope so! - They have been with us as long as I can remember... They are split already.
Have you got life insurance or anything like that? No life insurance. I have a private pension scheme through work which I don't notice anything going towards as they pay towards it. My husband doesn't have one despite me nagging!!
I try and save £30 a month into a Halifax savings account - which at 3.56% I think I could perhaps do better but then I read that if you are in debt you shouldn't be saving???
£36 a month paying back sofas we brought - this ends next year
£60 a month Orange phone bills (I recently swapped mine to a cheaper deal to £20 a month from £40, my husband is going to do the same shortly).
£18 a month contact lenses (I need specific ones from the optician because I have eye probs due to the thyroid probs I have - I have searched online and cannot find them).

O.K - phone insurance - the question is how much will it cost you, what benefits will it provide and do you think you are a high risk of losing your mobile? For most people it is not worth it but it all depends on your circumstances. Thanks, that's what I have heard. I decided I wouldn't take it just to try and save money. I am quite good with my phones and if I needed a new one perhaps I could just buy a cheap one etc. My husband is useless so I think he should get it - I think he does have one with carphone warehouse at present. Not sure how much. Think about £25 every 3 months.

Savings - I Can see why it is attractive to have some savings - how much have you got. You need to strike a balance between having some for emergencies and obviously trying to pay your debts down. However if you are going to have some I look at putting them in an ISA as this means you will get the interest tax free - they are just tax free savings accounts to be honest. Good ideas, thanks. We don't have much in savings at the mo - about £300 which I am trying to build up. The roof prob scared me!!
df