Help with debt - My SOA

spat08

Hello, I have been trying to sort out my money recently and been shocked by the debt. Had my LBM when i realised how much we (me and my wife) were paying and getting nowhere. Want to try and sort it out and need your help..

I have copied my SOA at the bottom, any help would be great. I have added a few notes to help

Most of these costs are for 2 people. I know we are not as hard up as alot of people, but it is still depressing. We certainly dont feel like we have this sort of money left each month. We have been paying these sort of costs for 4 years so approx 18k has gone down the pan..

Not too sure where to start..

Spat08 Statement of Affairs

Monthly Income Details
Monthly income after tax................ 1705
Partners monthly income after tax....... 1765
Total monthly income.................... 3470

Monthly Expense Details
Mortgage................................ 1200 (is going down to 1000 next month)
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 15
Council tax............................. 119
Electricity............................. 30
Gas..................................... 22
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 10
Mobile phone............................ 90 (for 2 phones, reduced to 70 today)
TV Licence.............................. 12
Satellite/Cable TV...................... 47 (I know this is expensive but save us money on not going out)
Internet Services....................... 10
Groceries etc. ......................... 160
Clothing................................ 40
Petrol/diesel........................... 100
Road tax................................ 10
Car Insurance........................... 37
Car maintenance (including MOT)......... 27
Car parking............................. 0
Other travel............................ 92 (travel card for work)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 25
Contents insurance...................... 21
Life assurance ......................... 22
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Gym .................................... 80 (have cancelled, going running now)

Total monthly expenses.................. 2189


Assets
Cash.................................... 6000 (4000 of this is wedding present from grandparents, cant use to pay off debt)
House value (Gross)..................... 249000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 255000

Secured Debts

Description....................Debt......Monthly...APR
Mortgage...................... 196000...(1200).....6.94
Total secured debts........... 196000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................4000......93........30
Virgin.........................4763......73........21
barclaycard 1..................3459......77........16
overdraft 2....................1800......0.........10
overdraft 1....................1500......0.........10
hsbc...........................3261......82........24
Total unsecured debts..........18783.....325.......-

Monthly Budget Summary
Total monthly income.................... 3,470
Expenses (including secured debts)...... 2,189
Available for debt repayments........... 1,281
Monthly UNsecured debt repayments....... 325
Surplus(deficit if negative)............ 956

spat08

I have not put in amounts for entertainment as I wanted to see what we had left after all bills. Also, wanted to see what we had to spend on paying off debt.

spat08

also, just remembered that I owe my parents £130 month..

poorandindenial

The good news is that making no adjustments you have a surplus - keep entertainment to a minimum for a bit and see what your extra money could do to your debts on the snowball calculator (!!! what you pay towards debts to your surplus and put that in the top box, then put details of your debts in the rest)

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

dancingfairy

well your SOA is showing that you have 956 pounds a month spare to pay off your debts on top of what you are already paying. This is a huge amount to 'lose' every month. You've said 150 is going back to your parents a month but you need to find the rest of it somewhere - you need to keep a spending diary and find out exactly where it is going - either your SOA is ridiculously out or you are continually going on spending splurges or you have forgotten a major debt you are repaying.
The main culprits tend to be: cd's/dvd's/clothes/makeup/beer/lunches at work/coke/cigarettes/bottled water/magazines/meals out after work/newspapers etc , etc.
If you utilise this money you can make some serious inroads into your debt very very quickly.
Also if the gym is cancelled and the mortgage is going down that's nearly an extra 300 a month on top of that!!
Best of Luck
df
P.S I think your mobiles are still pretty high to be honest - give it 6 months or a year and then renogotiate down to 25 or 20.

dancingfairy

Your debt repayments, plus your surplus , plus the extra you will gain from your mortgage and the cancellation of your gym memberships and the savings on the mobile is more than I will earn a month and I have bills to pay from this. You are actually in a strong position even if you don't realise it.
You can easily be debt free in 2 years - maybe 1 1/2 or less if you put your mind to it and restructure your debts sebsibly ie clear the most expensive cards first and then check out balance transfer offers or cheaper borrowing etc.
df

spat08

Thanks for all your replies...I do understand that we are nowhere near as bad as some people, i almost felt guilty posting the soa because i know how much some people struggle. But i decided to do it becasue we need help also.. it is more the help of finding the best way to pay off debt i think rather than cutting down on things

We honestly cant believe we have that much left but have gone through the list over and over and cant think of any other essentials..

I pay far too much at lunches, go out too much etc etc but still didnt realise we were "blowing" this much. I will start a diary to see where it all goes, thats a good idea..

so with the snow balling, i should start paying the highest interest first?

spat08

With the mortgage, it is going down to 1000 next month due to the change is SVR at the abbey.We are currently looking at renewing our mortgage and all deals we have been offered would take the payments back to 1200.

So basically it will be 1000 if we dont renew, or 1200 if we do..

dancingfairy

The issue is the art of budgetting - it is not taught in schools so unless you happen to have parents that have taught you (not that talking about finances was the done thing in the past) it is no wonder people struggle.
It is easy to overspend whatever your income - the effects are the same.
Another issue is trying to keep up with other people - either subconsciously or consciously and there is always going to be someone richer than you
It is easy to believe that everyone is earning loads and has it all but the reality is they are likely to be in as much if not more debt than you - do not be fooled.
A spending diary is definitely the place to start i think - you then can choose which things are worth spending money on and which you could easily lose without too much fuss and are doing for convenience or out of habit - once you know your enemy you can make rational decisions on the best plan of attack.
df

spat08

Il start a diary, i think i will probably be suprised by how much we spend on some things..

Looking at the snowball thing, if we try and put alot towards it in the new year, hopefully we can start to make some movement..

guessing we start with the mbna card..

spat08

Also, just remembered (shows how bad i am with money) that there is a loan which is £180 per month. Is about £4000 left at about 6.5% interest.

We have had the loan for years now and are quite happy paying it. HSBC are happy to extend the loan. We have 2 years left so were thinking of extending it and using the cash to pay of some credit cards, does this make sense?

As i said, i dont mind the loan so much as we know it is reducing etc, it is more the credit cards and overdrafts that dont move..