OMG Here's My SOA - GULP! Please Help!

Bestthingsinlifearefree

Hi SilverElephant,

You have good income coming in but clearly have been over spending for a while.

1)You and hubby need to keep a spending diary. write down every penny you spend. This will identify where you are / have been over spending and help you budget / discipline. This is very important.

2) What must be hurting you is those 18% - 30% interest rates. I see you mention you have done some snow balling all ready ie balance transfers etc. Any spare cash needs to go at the highest interest rate debts first.

Could you increase the family income in any way ? Part time 2nd job / rent a room ?

Could you cut costs in any way ?

Is your hubby aware of how tricky / serious the situation is, is he totally committed to reducing the debt. Does he realise the family home could be on the line. sit down have aheart to heart draw up a plan and tackle this as a team. The communication and challenge will make your relationship stronger.

The other option is to get all the debt on to your mortgage and pay a rate of 5% or so on that debt an extra 30K on your mortgage over 25 years might be
180 pound per month but could reduce your monthly out goings by a lot.

There are dangers to lumping it all in your mortgage.

1) Many people do that and clear all credit cards / loans and feel they have sorted the situation and then run up another 30K of fresh debt.

Would you be back here in 2 years with a 65K mortgage AND 30K of new debt ?????
(hence the need for the spending diary)

2) there can be fees involved in remortgaging. Need to look at this carefully.

3)you are turning unsecured debt into secured debt and makes your house more vulnerable if you default.

4)Though the interest rates might be 5% on a mortage as opposed to 18% on a CC. You may pay more on amortage as its over alonger period of time.

So think very, very carefully before you go to down the remortgage route and never ever use credit cards / loans again and start saving / over paying on your mortgage with the income that could be freed up on your monthly outgoings.

It is an option but the best option still remains increase your income cut out goings and live within your means.

Good luck.

silverelephant

You have good income coming in but clearly have been over spending for a while.

:rotfl: touche! Seriously though we def. had ostrich syndrom for a while there and really we should have addressed all this just after the wedding not let it go on for another 10 months :rolleyes:

1)You and hubby need to keep a spending diary. write down every penny you spend. This will identify where you are / have been over spending and help you budget / discipline. This is very important.

More or less doing this at the moment, I have my spreadsheet and online banking which are accessed everyday and adjusted accordingly but maybe a little notebook to go everywhere to *make sure* we're recording everything would be an idea

Could you increase the family income in any way ? Part time 2nd job / rent a room ?

Working on increasing the income see post above. Reluctant to rent a room as we did this in the past and got very badly "bumped" by our lodger (a supposed friend who f@*!^ed off to tenerife to live owing us a lot of money!) But if things don't improve may well think about it again.

Could you cut costs in any way ?

We're trying and it's ongoing

Is your hubby aware of how tricky / serious the situation is, is he totally committed to reducing the debt. Does he realise the family home could be on the line. sit down have aheart to heart draw up a plan and tackle this as a team. The communication and challenge will make your relationship stronger.

My hubby is an absolute JEM who saved me from an abusive relationship nearly a decade ago and we've been soulmates ever since (aw gush gush puke) We've both gone through some hard times and there's nothing we don't discuss or face together. We don't separate our debts into "mine & yours", or our income for that matter as all debts have been to help US (spending on home improvements, wedding, honeymoon etc) and all income is for us too. I have the more "office" mind (so mainly deal with the money all though he's always consulted) and he has the more "manual" mind so does all the hard grafting - he refers to me as the foreman cos I've got lots of great ideas but don't know one end of a screwdriver from the other )

You've made a lot of valid points re the secure option I won't copy it all here(!) and it is certainly something we've thought about and have even discussed with our bank. Currently mortgage is in my name only (for no reason other than when we were arranging it hubby had loads of overtime and rather than miss out on it I went to the bank alone.) so would be good to have it in both our names - being as how we're married and all that Will really need to crunch some numbers and work out realistically what we could pay off and what savings this would be. We will be cutting our credit cards up as they get paid off cos we're obviously not any good with them Also we really have learned our lesson and had a huge kick up the bum over recent months One of my concerns is that we have a few diy jobs unfinished in the house and obviously this will reflect on the valuation but a neighbouring house has just sold for 82000 (albeit in good decorative order) and even with the unfinished jobs we really have done a lot. And most work apart from the kitchen can be done with very little money.

Thanks for all your advice

I'm off for my tea now - hubby has been cooking it while I blether - see told you he was a JEM . *wanders off wondering how much she would get for selling husband* :rotfl: :rotfl:

Bestthingsinlifearefree

Hi silverelephant

You sound switched on and I think you 2 can turn your situation around.

You have clearly been stung by some of the credit agreements in the past e.g the HFC ones with extortionate interest rates / redemption penalties / PPI
etc etc.

Make your self one little promise BEFORE you ever sign another finance agreement be it a remortgage, car finance or whatever.

BEFORE you put pen to paper, post the details here and let all those number crunchers with far better financial brains than mine offer you FREE advice and suggestions as to whether its a good deal or if there are any catches in there in the small print.

A second opinion never hurt any one.

So if you have a chat with your bank about options report back here to us debt nerds for a second opinion BEFORE you sign any thing etc etc

You have nothing to lose by this strategy and lots to gain.

That way you and your hubby will NEVER get stung on any typeof credit / finance agreement again.

I wish you well.

Keep posting and keep up the good work.

black-saturn

Could you cut down your car expenditure and cut out one mobile phone?

silverelephant

Thanks Bestthingsinlifearefree

Thats actually a really good idea! Also provides a short "cooling off period" too. :cool:

Am working my way through the Money Diet at the mo and recall Martin's words about loyalty :money: so instead of going to my bank am thinking about approaching an independent financial advisor who has been recommended to me but definitely WON'T be jumping into anything til I've got it all worked out and checked out

silverelephant

black-saturn wrote:

Could you cut down your car expenditure and cut out one mobile phone?

Need the car and I have put my reasons above in another post but do admit on paper it looks BAD

We'll definitely be reviewing the mobile phones when their contracts are up at the end of the year. Opportunity to try haggling

redgemini

Hello - well done & keep focusing on that light at then end of the tunnel!
You mention that you're paying an account fee of £10 a month for your bank account - I assume the fee is for a premier type account with added services rather than just some sort of management / penalty fee?
If so are you getting any 'real' benefit from that?
It might be worth checking out if your 'bundled' services are available cheaper individually - that's if you even need them - remember (warning cliche alert!) It's only a bargain/ good value if you really need it in the first place!
Just a thought?

kar

I just looked up the APR's on the store cards you mentioned. Just incase you were unaware of how high the interest on these are. If you have any space left on your CC's it might be worth a balance transfer especially for the simbly be one.

Next APR 26.49% (from website)

Simply Be APR (29.4% or 27.7% if DD set up) (again from website)

Also you say you are paying £10 per month for your bank account. Is there anyway you could downgrade to an account you don't have to pay for. What do you actually get for that £10 a month? Is it really worth it?

silverelephant

Also you say you are paying £10 per month for your bank account. Is there anyway you could downgrade to an account you don't have to pay for. What do you actually get for that £10 a month? Is it really worth it?

You mention that you're paying an account fee of £10 a month for your bank account - I assume the fee is for a premier type account with added services rather than just some sort of management / penalty fee?
If so are you getting any 'real' benefit from that?

Yes it's a premium account will have a look over it today and see if there's any real benefit to us.

Next APR 26.49% (from website)

Simply Be APR (29.4% or 27.7% if DD set up) (again from website)

:eek: Hadn't realised these were so high either

I've obviously got a lesson to learn here - look at the APRs rather than just the credit limit they are giving you :rolleyes:

Did someone mention a light at the end of a tunnel, hmmm seems to be more of a tealight candle to me, maybe it's just a loooooong tunnel

Cheers guys

sanfrancisco

silverelephant wrote:

Yes it's a premium account will have a look over it today and see if there's any real benefit to us.

There won't be. Cancel it. These things are a con.