My parents are drowing in debt - any advice please!

Scottishmummy

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
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...................... 50You have already said this will be going
Internet Services....................... 0
Groceries etc. ......................... 400 This could easily be cut
Clothing................................ 50 This needs to be cut back
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 This definately needs cut
Haircuts................................ 60 This definately needs cut
Entertainment........................... 400 This definately needs cut
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 Could some of these be cashed in to pay off the secured loan
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.

I have put a few notes in red for you to look at. As for job seekers if your dad was self-employed he probably won't get anything. I went self-employed for two years and apart from really enjoying the job it was the biggest mistake I made as when it all went t!ts up I didn't qualify for anything.

Well done on helping your parents. Next time I go see mine this is what I will be doing. I don't know if they are in debt but I do know they are paying for things they don't need i.e. sky with everything!! Paid for bank account that offers travel insurance and other benefits that they don't use - they have never been abroad so why pay for the privelage.

Good luck

emp_3

Hi MyLastFiver

The £120 was coz i was wrong about brothers contribution. Their entertainment is stupid, but I have to take softly softly approach. If it was me Id cut it out immediately, but for 25 years theyve been living about their means so I cannot cut everything out straight away if you understand what I mean.

I may show them at their house this SOA. It may shock them into realising that they HAVE to cut back. it also makes it clearer to me how i can help them face this, then sort it.

The money for Xmas pressies is about £300 of gifts EACH for me and my 2 brothers then pressies for all relatives as well. This yr I may suggest that we opt out of that, dont give to us and we wont give to you....We also get £100 EACH for our birthdays.

luckily ma has already started to cut back on clothing....they have stopped buying things for the house as well already, so that should go from now on.

dancingfairy

Hi. 250 ish pounds a month from Jobseekers would make quite a difference and like someone said you get your national insurance paid for you - important for the pension entitlement.
400 entertainment - that sounds really high - they really need to cut this back.
Rent for your brother - seems really low - he needs to start paying his way if he is earning.
Groceries - again seems quite high - especially if milk and papers are bought seperately.
sky - can't really afford that at the mo.
home furnishings? 50 a month - what's that?
presents - needs to be cut back as well. carefuly shopping required - and you and your brothers (?) are obviously big enough to understand things are a bit tight.
clothing - could only essentials be bought for a while until things ease?
re brothers rent at uni. - they really need to explain the situation to your brother and see whether they can reduce this as they can't afford it
electric and gas could probably also be cut down - wold definitely check out comparison websites

There's plenty of things to investigate there for you.
Good Luck
df

MyLastFiver

emp wrote: »

My brother at home is apparently paying £30 a week... he’s agreed to pay them £40 a week and then me £30 as well to save for him.

Sounds like you're doing good work, but bro at home is still getting off lightly. When he is (unintentionally!) broking his parents he can't afford the luxury of saving. That £30 a week he's said he'll save should really go to his parents. £210ish p/m is still cheap rent but it's a start!

dancingfairy

I think you definitely need to show them the SOA. Also point out to them that if they carry on the way they are something will give at some point and they don't want to be getting nasty phone calls/ hassle from bailiffs either.
Don't know what help you get if you are self employed but would definitely go and find out and they really need to be trying to bring some extra income in from somewhere - overtime etc?
df

Deep_In_Debt

Yep, just have to say bro is getting off lightly. I was paying my parents £250 per month rent 20 years ago!

pandora205

I think £300 for each of your Xmas presents is much too high in the circumstances. And £400 for entertainment is very high.

I'd show your parents Moneysaving Expert and suggest they read some of the forums here, as there are loads of simple ways to save here.

emp_3

pandora205 wrote: »

I think £300 for each of your Xmas presents is much too high in the circumstances. And £400 for entertainment is very high.

I'd show your parents Moneysaving Expert and suggest they read some of the forums here, as there are loads of simple ways to save here.

hi pandora,

yes, writing down the presents money does make it seem ludicris. i think ill say not to get me anything more than £20 (same as i spend on them) and then when my brothers (who are younger) reach my age, phase it out for them as well. thereagain, they should understand so maybe stop it for all of us. it would make xmas less stressful for my ma too!

entertainment will be the hardest bit to tackle. hopefully the SOA will make it clearer though.

good idea regarding moneysavingexpert - as long as they don't see this thread! i think they wouldn't like it ! :0)

lmclean100

emp wrote: »

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

Hi

Your brother should certainly be paying more rent that £30 per a month. Assuming that he eats at home, has the use of the TV and phone and doesn't buy his own toilet paper, soap, shampoo etc, he should give your parents a third of his take home pay. I did this when I started working I got £120 per month (it was 30 years ago and life was a lot cheaper then) and gave £50 per month to my mum, £50 went into my savings bank account and I had £20 to spend, which was ample.

Your brother needs to learn to budget now, while he's still living at home so that he doesn't repeat the mistakes that your parents are making (I'm not being judgemental about your parents, I'm rubbish with money too and have quite a bit of debt, but that's another story).

Is the brother at Uni. living in Halls of Residence? I work at a Uni and the accommodation in the Halls is quite cost effective as you get three meals per day and you only have to buy soap, shampoo and deoderant, well some of our students buy deoderant


L

dancingfairy

maybe you can persuade your parents that staying in is the new going out - maybe they could have people over rather than going out? go to the cinema on a wednesday by using Orange2 for 1 tickets etc - doing what you would usualy do but looking at ways to have the same amount of fun but cheaper - using restaurant tokens, having a beer at home, using tesco vouchers for days out etc, etc
df