Advice needed

Q_Who?

Hello all.
I've been following MSE for some time and have decided to take the plunge and ask for some advice. I have £16500 worth of debt. £16000 in a personal unsecured loan and the rest credit card/overdraft. I had what seemed a reasonably well thought out budget but a few recent events really created havoc and I can't stop worrying. I am disabled and unable to work, my wife works 30 hours a week at a very physical job and we have a 5 year old daughter. Below is our income/expenditure monthly.

Income:
My benefits; £562
Child benefit £73
Wife income £652 (after tax)
Tax credits £368
Total £1655

Outgoings
Rent and water £284
Housekeeping £347 (£80p/w inc. £7.75 school dinner)
Gas/Elec £59
Phone £50 (Landline, 1 payg and 1 contract mob)
Internet £18
Council tax £79
Loan £312
Tv license £11
Life+Accd't ins £22
Car ins £25
Car breakdown £5
Car repair £30
Diesel £60
Disability scooter ins £13
contents ins £15
Dog ins £15
Charity £10
Savings plan £12
Club sub £2
Miscellaneous £40
Gifts/Holidays £80
Clothes £100
Emergency £40
Wifes work ins. £5
Credit Card £20
Total £1674

Basically, what do you all think? Is there anywhere I can make cuts? I do all the right things with utilities and insurances. I am desperately trying to reduce the housekeeping bill. The problems that have hit are, my wife is on a zero hour contract and for the first time over xmas her boss used it on all the staff and cut their hours over a four week period. She lost about a quater of her wages that month. She has been told it won't happen again as the staff are being reorganized. The second was a reduction in tax credits after they had completed the review pack. On top of that my wife will be paid Monthly as opposed to wekly from the 1st April. Now that will not be fun!
The loan is at 5.9% and will be finished in 5 years. The credit card in about 3 years. The overdraft is about £250.

The debt is as a result of several major crises and general uselessness. I think I have that sorted whcih is why I took out the loan. I'm desperate not to slip backwards.

Any help or advice will be greatly appreciated.
Many thanks
Q Who?

dellamirandola

You'll get much better advice coming along shortly but here goes. First of all, congratulations on coming forward - it's a very brave and admirable thing to do.

Second, it probably doesn't make sense to put money in savings, since you'll be paying out more in interest than you are getting in. Same goes for charity donations - good for you for paying this, but at the moment your generosity just means more money going in interest payment for your creditors. Is there anyway you could replace this with volunteering (eg reading for the blind, mentoring...?) Googling timebank comes up with a wealth of good suggestions.

As for gifts/holidays - it's a tricky one, but it's also quite a lot of money. On the one hand holidays are nice things and cut down on stress. On the other hand, having less debt also cuts down on stress. Your choice.

Again, congratulations on posting and good luck!

micheleen

Housekeeping seems a bit high, I spend around £75 per month as a single person.

in*the*red_6

Also, £100 on clothes is that per month?????

ozzyfan_2

Hi Q who? :hello:

welcome & well done for posting, I'm sure you'll get lots of useful advice to help you.

£100 for clothes is really high, could you & your wife make do with what you have for the time being?

& £40 for miscellaneous what is this & could that be reduced?

edit sorry in*the*red crossed posts with you was trying to work out how to spell miscellaneous lol

in*the*red_6

No problem, I'd have cheated and put misc

magentadreamer

I'm assuming you've done all the swaps with utiliies and checked out cheaper insurance etc?

Food/housekeeping ! this does seem rather alot for 2 adults and a tot. Check out the old style forumn for tips. Also you can find loads of discount codes for Tesco to do online shopping in the discount board. Have you thuoght about doing one bulk shop for non perishables then a small weekly shop for veg/fruit/dairy etc. You could also try Lidl or aldi to help cut costs. I do a bulk shop at Tesco's online then top up with veg/fruit/diary stuff at my local Lidl.

Charity not wanting to sound callous but it's something right now you can't afford.

dog Insurance do you really need this?

Phone ! are you able to get both mobiles on pay as you go? Also have you got talk packages etc for the landline?

Internet ! are you out of the 12 month contract? If so why not look at a combined phone/broadband package ! Tiscali were doing one for £19 a month with unlimited landline calls.

clothes ! £100 a month seems rather alot.

I'm not too sure where the stray ! are coming from!!

hope_strong

Hi Q
One thought, are all these monthly outgoings really monthly? Eg, the car repair, do you need to repair it every month or is this the yearly figure split down?

I'm sure you've done this already but if not ! give Martin's budget spreadsheet a go, make sure your 'big' repairs etc are split down fairly over the months.

On the positive side, if you can cut down even a bit on clothes or anything, you'll be in the black, please don't be disheartened!

I'm being brave for the first time and putting my own debts in my signature ! I aim to be as organised as others here. Meanwhile I find that just writing it all down (like you have) and knowing where I stand helps me cope with the worry about money.

!Hope

Q_Who?

Wow. Thanks for the encouragement and rapid replies. I will take it all on board and have a think. Some things are tricky and I could do with more advice. I'm the one who does the shopping and it it is very difficult with my health. I do all shopping at Morrisons. What specific suggestions do you have to reduce that and where is the old style forum? Clothes, I agree with you all, its convinicing my other half that may be a problem. Dog insurance, yes I need that. Internet is actually misleading as I can't get my provider to take money off me! I've been with Wanadoo for nearly two years and despite phoning on numerous occasions they have never taken a penny off me! Charity, again I see the point. Phones, the one on a contract runs out in August.
No my car doesn't breakdown every month but thats how much I put aside each month. "Misc" is for anything not covered, a bar of cho, dvd, bottle of wine, stamps etc. The holiday/gift is to try to avoid using credit when it comes to buying such things. When I say holiday its more often than not the cost of fuel to visit relatives anyway, not a trip to Paris!

Ok. Thanks again everyone, I'll be back with some revisions soon. Please stay with me on this one!
Cheers
Q Who?

hope_strong

Hi Q

One point then, if you're putting aside money 'in case of' car repairs: put in on your credit card instead, that way you're reducing your debt, and making more room on the card if you DO need an emergency repair.

I can't take credit for that advice, it's straight out of the Money Diet. But it made sense to me.

Good luck.

-Hope

Kimberley

You can get cheap unused clothes on Ebay, i hardly buy from shops now. Some charity shops sometimes get designer clothes from shops who can't sell them due to a mark on them etc.

I agree you can cancel the £10 to charity until your more financially better. i had to cancel my Dolphin adoption scheme, but i'll be back once my debts are clear.