My parents are drowing in debt - any advice please!

emp_3

I always knew that my folks were bad with money, but upon going through their finances this weekend EVERY month they overspend by £800. This means they are now £3000 overdrawn, and obviously every month they go a further £800 over their limit they pay £115 fees.

Their spending:
£300 mortgage (due to finish next yr but with a £6k shortfall - I had made them claim this but they have actually already spent it)
£600 bills
£400 accomodation for my brother at uni
£400 food
£400 loan (to pay off a consolidation loan from last time they went overdrawn)

Their income:
£2000 teachers salary
My pa has no work on at all at the mo. I mentioned job seekers, as he has no work, but he is proud and unkeen, but i am not even sure if he would get anything.

My other brother still lives at home with them and pays the ludacris (and pointless) rent of £30 a month. he works full time.

so i suppose my main 3 questions are:
how long does it take to start getting/how viable is it to get job seekers?
is there anything that the uni/the uni system can do to help them?
how much rent should my 22 yr old brother be paying?

please any advice would be greatfully recieved.

emp xx

MyLastFiver

Unless I've added it up wrong, the spending does not equate to £800 a month over budget. And £600 bills? Where do they live? Windsor Castle?

Sorry I'm being silly. What I'm trying to say is if you do a full and detailed SOA (see sticky at top of board) and post it here, we'll be in a better position to help.

emp_3

Hiya, but those are just the DD and SO costs - they do not cover living costs (holidays, dentist bills, hairdressers, entertainment yadda yadda)

£120 council tax
£50 sky (definately going!!!)
£80 gas and electric
£20 teachers union
£25 car insurance
£15 tv licence
£80 water
£13 BT
£10 broadband
£60 petrol
£15 milk bill
£10 newspaper bill
£10 AA membership
? life insurance
? contents insurance

thats the same as i pay as well. and i am very stingy :0)

pandora205

I agree that you need to do a full SOA but my immediate thoughts are that £30 a month is ridiculous for a working adult child to pay. Depending on his income, around £50 per week would be more reasonable (assuming he is having meals at home). Does your brother at uni have a job, if not he needs to get one, so that he can contribute to his accommodation costs too? If you father has recently become unemployed then this will affect your brother's tuition fees/student loan assessment.

Are you saying you only pay £30 per month too? If so, it's time you (and brother) paid a reasonable adult amount (assuming you are both over 18 and working). It looks like at present your mother is supporting a family of 5 adults on her salary - no wonder it doesn't stretch.

MyLastFiver

First thoughts - can't they just buy milk from the shop when they need it? Don't know but isn't having a milkman expensive?

£80 water is huge. Are they metered?
£10 newspapers - read them online for free
£10 AA membership - they can shop around and get a much better deal than this, even for higher levels of cover. In the world of breakdown insurance there is no reward for loyalty.
TV licence works out £11.87 p/m
Life insurance - can they really afford this at the moment? And who's life is insured? If it's you Dad's, what's the point if he's not working? And If the mortgage is almost paid off, and you kids are all grown up, why need life ins at all?

I agree that your parents cannot continue to fund your brother at uni to the extent they have been doing. And your older brother needs to pay rent at at least £200 p/m, but more if you live in an expensive area and/or he is on a good wage.

LittleMissAspie

So there are three adults in the household? Groceries could easily be reduced to £300, then to £200 once they get used to it.

Water is high, is that rates? Getting a meter installed could halve that.

They could cancel milkman and newspapers until they get out of debt.

Things like hairdressers and entertainment, they just have to stop all that until your dad finds work. Hopefully it won't be for long.

I reckon a percentage of your brother's income as rent, rather than a fixed amount. I think that reflects real life more - people who earn more live in more expensive places. 20% for all rent and bills seems fair. If he doesn't earn a great deal then this will cost him less than moving out. If he earns enough that he could move out for less then he can move out and stop leeching.

Horace

Post up a proper SOA - https://www.makesenseofcards.com/soacalc.html and follow the instructions to copy and paste it here on MSE. You can copy and paste to this thread.

Depending on his salary your brother should be contributing about £300-400 a month in rent..if he got a flat elsewhere depending on where you live, he could pay more than this (e.g. I currently pay £525 a month and have to pay all my bills on top).

Tell your Dad to go to the jobcentre, there is no point in being proud and being totally skint, admittedly JSA is only £60.50 a week or thereabouts but it is also getting his stamp paid.

lincroft1710

£30 pm "rent" is totally ridiculous, I was paying almost that to my parents 35 yrs ago!! If brother contributed proper amount, it would probably halve their debt.

emp_3

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 3
Number of children in household.........
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 120
Total monthly income.................... 2120
Monthly Expense Details
Mortgage................................ 300
Secured/HP loan repayments.............. 400
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 80
Telephone (land line)................... 15
Mobile phone............................ 35
TV Licence.............................. 10
Satellite/Cable TV...................... 50
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 50
Petrol/diesel........................... 60
Road tax................................ 30
Car Insurance........................... 35
Car maintenance (including MOT)......... 80
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 10
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 120
Haircuts................................ 60
Entertainment........................... 400
Holiday................................. 0
Emergency fund.......................... 0
home furnishings........................ 50
brother's uni accomodation.............. 400
Total monthly expenses.................. 2825

Assets
Cash.................................... 0
House value (Gross)..................... 250000
Shares and bonds........................ 60000
Car(s).................................. 50
Other assets............................ 0
Total Assets............................ 310050

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 80000....(300)......6.2
Secured Debt.................. 5000.....(400)......17
Total secured & HP debts...... 85000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 2,120
Expenses (including HP & secured debts). 2,825
Available for debt repayments........... -705
Monthly UNsecured debt repayments....... 0
Amount short for making debt repayments. -705
Personal Balance Sheet Summary
Total assets (things you own)........... 310,050
Total HP & Secured debt................. -85,000
Total Unsecured debt.................... -0
Net Assets.............................. 225,050
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using IE browser.

emp_3

Ok, thanks for the advice so far, realllly useful. And it’s a relief to hear off other people too :0)

Good bills advice- I am taking Friday off work where i can review them further as well as go with dad to the job centre. Upon further thought though i do think that he will be eligible to anything. As he is self-employed you are only entitled to claim benefits if you pay extra national insurance on top of statuary national insurance– any one know anything about this? I hope i am wrong!!!
I don’t live at home – went to uni 11 years ago and live away – which is why i didn’t realise this was happening.
My brother at home is apparently paying £30 a week, not as terrible as i thought but still bad. Mum is reluctant to charge him more (they feel so sorry for him that he couldn't go to uni and missed the fun) so he’s agreed to pay them £40 a week and then me £30 as well to save for him. Hopefully the seed will be sown though so he offers a little more. He earns £230 per wk by the way. More than enough for a 22yr old to live off.
The brother at uni I have just spoken to about going into speak to student finance at his uni to see if they can offer him anything to help relieve our folks. I am not sure how else to tackle what help could be given to pay him through ?? He has also hopefully secured summer work.

Thanks again xx

MyLastFiver

emp wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 3
Number of children in household.........
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 120 Where's this from? I thought bro paid £30 p/m
Total monthly income.................... 2120
Monthly Expense Details
Mortgage................................ 300
Secured/HP loan repayments.............. 400
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 80 very high
Telephone (land line)................... 15
Mobile phone............................ 35 how long left on contract? looking like a bit of a luxury at the mo
TV Licence.............................. 10
Satellite/Cable TV...................... 50 bye bye Sky!
Internet Services....................... 0
Groceries etc. ......................... 400 you can save at least £100 here
Clothing................................ 50 does bro buy his own clothes? if so then this is high
Petrol/diesel........................... 60
Road tax................................ 30
Car Insurance........................... 35
Car maintenance (including MOT)......... 80 £960 on car maintenance? seems high
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 10
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 120 £1440 a year on presents? do me a favour.
Haircuts................................ 60 This has to go
Entertainment........................... 400 Do they weekend in St Tropez or something?
Holiday................................. 0
Emergency fund.......................... 0
home furnishings........................ 50£600 a year on furniture? Can't they make do for the time being?
brother's uni accomodation.............. 400
Total monthly expenses.................. 2825

Assets
Cash.................................... 0
House value (Gross)..................... 250000
Shares and bonds........................ 60000
Car(s).................................. 50
Other assets............................ 0
Total Assets............................ 310050

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 80000....(300)......6.2
Secured Debt.................. 5000.....(400)......17
Total secured & HP debts...... 85000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 2,120
Expenses (including HP & secured debts). 2,825
Available for debt repayments........... -705
Monthly UNsecured debt repayments....... 0
Amount short for making debt repayments. -705
Personal Balance Sheet Summary
Total assets (things you own)........... 310,050
Total HP & Secured debt................. -85,000
Total Unsecured debt.................... -0
Net Assets.............................. 225,050
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using IE browser.

Sorry if I've been a bit sarcastic but there are some craaazy figures in there. If they are truly accurate, your parents can meet the shortfall without too many problems, by getting your bro to pay a proper rent and cutting back on luxuries.