Suggestions on my SOA please

wigginsmum

Income:

£1,867 - Salary (including paying back interest-free season ticket loan)
£850 - DH for share of household bills

Total Income = £2,717

Outgoings:

£891 = Mortgage
£86 = Life/Critical Illness cover
£74 = Gas & Electric (just moved from London Energy to Powergen, saving £19/month)
£75 = NTL (3MB Broadband, TV and phone)
£20 = Water
£121 = Council Tax
£11 = TV Licence
£30 = Support for friend
£31 = Mobile phone (on contract until Nov-06, then will move to PAYG)
£46 = Pet insurance (7 moggies!) Direct Line
£38 = House insurance Direct Line
£200 = Food for us & cats + household buying
£10 = ING savings

Expenditure £1,633

Debt repayments:

£457 = Loan (secured Firstplus - grr, not sure of APR but 19 years to go, current balance £50,537)
£250 = Egg (Min payment £237, 15.9% APR, balance £11,863)
£212 = MINT (paying min payment, 14.9% APR, balance £9,439)
£32 = Overdraft interest (O/D just reduced from £6k to £3.4k with Natwest and underusing each month by whatever is spare)

Total expenditure including debts = £2,584

That leaves me £133/month to play with; I don't go out, don't buy clothes unless they wear out etc. Until the end of this year I'm 'using' this £133 to reduce my O/D by non-use. My plan is:

- reduce the Natwest overdraft monthly, then pay off completely with my work bonus next January; although it doesn't have the highest APR they're hassling me to turn the overdraft into a loan which I don't want to do;
- pay off Egg by Jun-08, upping payments when O/D gone;
- pay off MINT by Feb-09, upping payments when Egg gone;
- then save £800/month (assuming bonuses and payrises stay the same for the next few years) into ING Direct until I have enough to clear the Firstplus total probably around Jan-11.

I'm going to try and haggle NTL down (DH won't let me change the package ie. taking off the film package), and see if I can shave any more off the shopping bill (static £80/month on cat food, + £120/month food/household shopping for 2 adults, occasionally a child).

I do have an AMEX platinum card with £0 balance/£6,100 credit limit/4.9% APR for life-of-transfer, and I'm debating whether to transfer some of the Egg balance onto it before April when my 6 months balance window ends. I'll also look at getting cheaper life/critical illness cover.

Also got literally hundreds of books to sell - closed my Ebay account as disgusted with them, but maybe I could use Amazon.

Anything obvious I've missed?

skintchick

Hi Wigginsmum!

The house insurance seems high.

Also, even if the bank is hassling you to turn the OD into a loan, you really ought to pay off the highest interest debt first, unless you think they might take the OD facility away.

Your gas and leccy look high to me, but you say you've just switched.

The life insurance is high - do you really need this?

I know you have 7 cats but why does it cost £80 a month to feed them? My one costs me about £6 a month, so that would be £42 for seven - I buy just dry biscuits and occasional tin of Value tuna.

Other than that, the NTL is obviously a massive cost but you are dealing with that.

Can't see anything else - you're doing a fine job!

wigginsmum

I'll have a look around at different house insurance quotes. It's not up for renewal until November; are there any kind of penalties for changing early? We've never had to claim on house insurance for anything.

For psychological reasons I'd rather pay off the O/D first, although I understand the logic in paying off the highest APR first. My current account hasn't been in credit for several years while this mess built up so I'd rather get that sorted first. I don't think they'd wear it if I maxed out the O/D every month to pay off extra towards credit cards.

I used uswitch.com back in November and they said Powergen would be cheapest for us. We only have a 3-bed house, turn off unused appliances, have the heating on timer etc.

I really need to look at the life insurance etc and see what's already covered by work for death-in-service.

We can't give our cats dried biscuits; one nearly died with a blocked bladder thanks to Iams so we've been advised to keep them on tinned food. We put down 3 tins in the morning and 3 in the evening; admittedly they're on Whiskas at the moment which we buy in bulk from Costco @42p/tin. I might be able to find a cheaper brand and keep putting it down until they eat it when hungry enough.

Frankly I'd get rid of the TV completely if it were my choice but this is one of the occasions where DH digs his heels in.

Thanks for the suggestions!

skintchick

I changed my house insurance last year in the middle as it were, and there were no penalties - I just said i didn't need it any more.

I have a two bed mid-terrace and pay £120 a year with CIS, who were very cheap. Definitely worth checking out quotes.

On the OD - I know you don;t want to max it out, but what if you just didn;t let it move from the highest it is now? But still pay off the highest APR debt first?

Have you checked out things on the snowball calculator?

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

That might help clarify your mind?

I have to say I am a bit confused about why DH gives some money for bills (presumably keeping quite a bit for himself?) but you are then responsible for EVERYTHING.

Am I reading it wrong?

If not, why can't he pay for his TV channels himself?

Bokken_2

Mmm a couple of points,
Move the highest APR credit card balance onto the Amex LOB pay the minimum payments to Amex +£10 and forget about it for a year and concentrate on the remaining high debt.
Is the Amex card a joint application?If it isn't you or your OH apply for another Amex LOB card and put the remainder of the highest APR on the second Amex card (Try IF Finance LOB card aswell/instead of Amex) pay a few £'s above the minimum and then forget about it for a year,and concentrate on the rest of the high interest debt try and move some of it to a lower or 0% APR credit card.
That will give you a bit more breathing space and review what your doing every month to avoid paying extra charges etc.
I personally wouldn't change the overdraft to a loan,try to continue to use the overdraft to give you extra breathing space but youv'e got to try and stop incurring the charges .

CLAPTON

you're going a great job .... only comments are (a) have you reviewed the mortgage recently for better deals..and (b) ING is not really a great rate anymore ..I think ING pays 4.5% whereas you can get 5.15% with A&L until March 2007

black-saturn

Looking at your SOA a few things spring to mind:

£86 - life cover - this is really high. Could you put this off for a while until the debts have cleared up? If you cash it in now you could use it to pay off your debt.

£20 - water - if you went on a meter you might save something

£30 - support for friend - what kind of support? I think your the ones who need support right now.

£46 - pet insurance - maybe just insure the old or sickly ones. Younger ones can wait.

wigginsmum

DH won't even check his bank account so I set everything out of my current account so I can be sure it gets paid. We treat all income and outgoings as joint so have the same amount of 'spare' each month. He pays everything to do with the car (I don't drive) plus maintenance/visiting his kids.

Yeah I've looked at the snowball but it's a bit of sticking-point for me to clear the OD first; it's what I feel happiest doing.

I'll certainly look at CIS - thanks for the suggestion. I think I might quietly drop us to 2MB broadband and have a look again at the NTL channels to see if we can lose the kids' channels.

skintchick

Oh OK. As long as it's split 50/50 - was getting outraged on your behalf then!!!!

Ref the comment on your water - I am on a meter and pay £19 a month, so I don;t think you could get it cheaper.

black-saturn

I pay £13 per month and theres me and 2 children here.

wigginsmum

Bokken - thanks for the tip re Amex; I'll look into it and see if DH would apply for one in his name (he only has one card).

CLAPTON - thanks; we're on a fixed rate with Natwest till Jun-07 so I'll start looking around. And will look at A&L. Oh and do I get a gold star for my nice shiny SOA?

black-saturn - maybe I'm wrong but I thought we had to have life insurance to cover the mortgage? Would I get a lump sum back if I cancelled it?

I did look at getting a water meter (can't remember which site I used but it said we were better off as we are).

Support for a friend - she's a little old pensioner who got really screwed by her ex-husband and is having to rent privately on a very low income. I can't take my little bit away from her and don't really want to; kind of a moral obligation because she was good to me in the early Nineties when I was absolutely brassic.

Pet insurance - we've had to claim equally on the old and young ones over the past few years so it seems safer to have it. It was a young one who nearly died from Iams last year and would have cost us £2,000 to pay ourselves.

Thanks for the suggestions guys - keep 'em coming!