New DFW Needs Help/Advice

Madmolly

Hi everyone

I'm finally taking the plunge and posting on this board to see if anyone can give me some help/advice regarding our finances.

We have quite serious debts consisting of credit cards and loans. I have completed the SOA.

One of our main problems is that I get paid monthly and my husband still gets paid weekly. As my income is not enough to cover the DD each month, we rely on our overdraft which would creep up to near its limit and then as my husbands money was paid in each week, would come back down again, although I've noticed lately that it just keeps going up and up. I have today been and cashed in my ISA with the idea of clearing the OD and putting 1 months DD money into the bank in the hope that this will help but don't want to do this if in 3 months time we are back in the same situation.

We have looked into remortgaging to clear our bank loans but as they only have 6 years left to run and our mortgage has 13 years, it seems silly to double the term of the loan - would people agree with this.

I think we can cope with the loans but the credit cards are getting out of hand (we are not using them) as we can only ever afford the minimum payments and this month after paying £117 to MBNA we had only knocked £4 off the balance, which means it will take us approx 99.3 years to clear!!

We have just managed to get a Nationwise 0% for 13 months card, with joint limit of £6300 so was going to transfer most of the MBNA to that BUT we have then discovered that the minimum repayment is 3% which then increase our outgoings even further so I just don't know what to do.

The whole situation is making me feel ill. It all feels out of control, my husband is working over 60 hours a week to try to earn extra money and its causing major problems in our relationship. We have looked at Bankcruptcy/IVA etc but as we have equity in our home, cannot bear the thought of losing it and the car etc.

I did complete the debt help form on the CCCS website and they recommended a DMP, but said that we had £860 to pay towards our debt each month which would mean paying out more than we are now. Don't get me wrong, I'm not saying we don't want to pay these debts, we do, but we also want to see the amount we owe going down each month/year and actually feel we are getting out of debt.

Does anyone have any help/advice?

Many thanks.


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1863
Partners monthly income after tax....... 1000
Benefits................................ 170
Other income............................ 0
Total monthly income.................... 3033

Monthly Expense Details
Mortgage................................ 784
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 105
Electricity............................. 67
Gas..................................... 30
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 20
Mobile phone............................ 15
TV Licence.............................. 12
Satellite/Cable TV...................... 22
Internet Services....................... 15
Groceries etc. ......................... 400
Clothing................................ 50
Petrol/diesel........................... 160
Road tax................................ 20
Car Insurance........................... 50
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 7.4
Pet insurance/vet bills................. 11
Buildings insurance..................... 36.72
Contents insurance...................... 0
Life assurance ......................... 35
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1915.12


Assets
Cash.................................... 5000
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 9000
Other assets............................ 0
Total Assets............................ 154000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 87300....(784)......5.69
Total secured & HP debts...... 87300.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
tesco loan.....................22000.....281.......5.4
sainsburys loan................11000.....181.1.....7.9
black horse finance............700.......25........8.2
catalogues.....................500.......30........0
skycard........................250.......7.........16
halifax........................1000......20........6.9
post office....................600.......22........12
lloyds tsb.....................3500......70........12.9
mbna...........................7500......117.......18.9
Total unsecured debts..........47050.....753.1.....-


Monthly Budget Summary
Total monthly income.................... 3,033
Expenses (including HP & secured debts). 1,915.12
Available for debt repayments........... 1,117.88
Monthly UNsecured debt repayments....... 753.1
Amount left after debt repayments....... 364.78

Personal Balance Sheet Summary
Total assets (things you own)........... 154,000
Total HP & Secured debt................. -87,300
Total Unsecured debt.................... -47,050
Net Assets.............................. 19,650

~Beanie~

Madmolly wrote: »

Electricity............................. 67 - seems quite high, can you switch suppliers?
Groceries etc. ......................... 400 - you could cut this a bit
Clothing................................ 50 - cut this for a while, wear what you already have and buy essentials only

Amount left after debt repayments....... 364.78

I can't really see many areas where you could cut back to be honest. Your SOA shows that you have £364 left over each month, is this correct? If you are finding that you don't have this, try keeping a spending diary for a few weeks to see exactly where it is going. That will be why CCCS are suggesting that you pay more than you are at present as you have quite a high surplus.

Can you speak to CCCS on the phone rather than complete the online debt remedy? £47,000 of debt is an awful lot to tackle on your own.

GeorgeUK

It sounds like keeping a spending diary would really help. I take it you don't have over £350 left at the end of the month after paying all the bills? Make sure that both you and hubby write down everything you spend on for a month and you should hopefully be able to plug up a few of the hidden costs or be able to redo the budget so that it is more accurate.

Mortgage................................ 784
interest only or repayment?

Council tax............................. 105
If this is over 10 months, can you ask to spread it over 12?

Electricity............................. 67
Gas..................................... 30
Have a look at the comparison sites to see if you are getting the best deal. (uswitch, moneysupermarket) Also make sure nothing is left on standby as this still uses energy.

Water rates............................. 25
Is this metered? Do you have a water hippo or something in the cistern so that you don't use as much water when flushing?

Mobile phone............................ 15
PAYG?

Telephone (land line)................... 20
Satellite/Cable TV...................... 22
Internet Services....................... 15
Is this a package deal?

Groceries etc. ......................... 400
Woah!! This could be cut back a bit. Have a look at the old style board and mealplan ideas, also cooking in bulk and freezing to save on cost of ingredients.

Clothing................................ 50
Every month? Can this be reduced a little?

Car maintenance (including MOT)......... 0
Need something here.

Car Insurance........................... 50
Pet insurance/vet bills................. 11
Buildings insurance..................... 36.72
Contents insurance...................... 0
Life assurance ......................... 35
Again, look at the comparison sites to make sure you are getting the best deal.

Emergency fund.......................... 0
Need something here - broken washing machine, computer, plumbing could all cost. Best to have some kind of buffer and then stop saving when you have a decent amount.

I think you should pay any extra money you have towards the MBNA card, then the cards with the lowest balance. Once you clear a creditcard, you may be able to take advantage of any balance transfer offers they have for existing users. Some of these may be a low interest for life of balance offer which usually has a lower monthly minimum payment too.

david_hellier

~Beanie~ wrote: »

I can't really see many areas where you could cut back to be honest. Your SOA shows that you have £364 left over each month, is this correct? If you are finding that you don't have this, try keeping a spending diary for a few weeks to see exactly where it is going. That will be why CCCS are suggesting that you pay more than you are at present as you have quite a high surplus.

Can you speak to CCCS on the phone rather than complete the online debt remedy? £47,000 of debt is an awful lot to tackle on your own.

Another way of using a spending diary is to allocate a specific amount from your budget and deduct spending through the week. Try to end the week with some over to carry forward to the next week. This avoids overspend and monitors your buying habits.

milliemonster

One thing I notice on your SOA is you are paying £55 a month for your satellite TV/Landline and internet, could you not get one of those bundles with Sky cheaper than this?

£400 a month on groceries for 4 of you could be cut down, I now spend £200 a month for 4 of us as opposed to around £600 a month a couple of years ago (and most of that was chucked away!), initially tryin down branding or cutting back your weekly grocery spend by £10 a week, have a look at the OS board for tips on mealplanning, look at what you currently have in your cupboards/freezer and make a list and work out meals from that using your grocery budget as top up only, yes it's boring but its amazing how much you can save doing this.

Your life insurance is high, ours is £13 a month for £120k worth of mortgage term assurance for both of us.

Your Buildings and contents insurance is very high, have a look at insure.co.uk, we have got ours with them for £185 a year for £70,000 contents cover and £400,000 rebuild cover

You should easily be able to free up another £100 a month towards your surplus (probably much more) so you could easily have a surplus of £500 a month.

Then you need to start a spending diary to see where your surplus is going as you should have plenty to make overpayments without going on a DMP and also you should be able to easily afford the increase in Minimum payments on the Nationwide balance transfer

Madmolly

milliemonster wrote: »

One thing I notice on your SOA is you are paying £55 a month for your satellite TV/Landline and internet, could you not get one of those bundles with Sky cheaper than this?

£400 a month on groceries for 4 of you could be cut down, I now spend £200 a month for 4 of us as opposed to around £600 a month a couple of years ago (and most of that was chucked away!), initially tryin down branding or cutting back your weekly grocery spend by £10 a week, have a look at the OS board for tips on mealplanning, look at what you currently have in your cupboards/freezer and make a list and work out meals from that using your grocery budget as top up only, yes it's boring but its amazing how much you can save doing this.

Your life insurance is high, ours is £13 a month for £120k worth of mortgage term assurance for both of us.

Your Buildings and contents insurance is very high, have a look at insure.co.uk, we have got ours with them for £185 a year for £70,000 contents cover and £400,000 rebuild cover

You should easily be able to free up another £100 a month towards your surplus (probably much more) so you could easily have a surplus of £500 a month.

Then you need to start a spending diary to see where your surplus is going as you should have plenty to make overpayments without going on a DMP and also you should be able to easily afford the increase in Minimum payments on the Nationwide balance transfer

Hi thanks for this - will look at insure.co.uk right now. Can I ask who your life insurance is with? I have tried to look for cheaper deals but all the quotes I got were actually more expensive - do you think this is because husband is 52 so they consider him to be "old":rotfl:

You are right about the grocery bill, but I think I have been feeling so depressed about the whole situation that I just chuck things in the trolley without really looking. I'm going shopping today so will go through the cupboards, make a proper list and see how I get on.

Have just looked at Sky for their complete deal and it looks as though I may be able to save £16 a month there, so will be looking at changing over.

I think by clearing the OD and managing our money better we will be able to make some extra payments.

Katie-Kat-Kins

Sounds like your first issue is to work out where your money is going, according to your SoA you should have a surplus. You are spending more each month than you have recorded here so you are not being entirely honest with yourself. You need to work out where that money is going as it can be targetted at reducing your debts. The spending diary is the way forward.

In the meantime you need to cut your outgoings as far as possible so that you can start to pay more than the minimum on those credit cards. Even a pound more will make a difference.

The clothes spend is an easy target, I can believe that you really NEED £50 worth of clothes every months. Don't go clothes shopping, it is too easy to let clothes shopping become like a hobby. Go through your wardrobe, wear things that are lurking at the back, repair or alter existing items. If you could reduce this by half it would be £25 extra off your debts.

Your food shop looks very high too, where are you shopping? Are you adding extras and treats to the trolley? Can you down shift on your branded goods? Are you wasting food?

You will get there but you need to work out where your money is REALLY going before you can tackle things.

milliemonster

Madmolly wrote: »

Hi thanks for this - will look at insure.co.uk right now. Can I ask who your life insurance is with? I have tried to look for cheaper deals but all the quotes I got were actually more expensive - do you think this is because husband is 52 so they consider him to be "old":rotfl:

You are right about the grocery bill, but I think I have been feeling so depressed about the whole situation that I just chuck things in the trolley without really looking. I'm going shopping today so will go through the cupboards, make a proper list and see how I get on.

Have just looked at Sky for their complete deal and it looks as though I may be able to save £16 a month there, so will be looking at changing over.

I think by clearing the OD and managing our money better we will be able to make some extra payments.

That's brilliant!!! see you're sounding more positive already, my hubby is 43 but we did get our life ins a few years ago but even though your hubby is 52 if he is in good health you should still be able to get it cheaper, ours is with norwich union (aviva now I think)

A lot of it does come down to money management, you are actually in a great position in that you already have a decent surplus without making any changes, my guess is that your grocery shopping is eating up that surplus and you are estimating your current monthly shopping to be around £400 when in reality it is probably more. I do completely understand this as this is what has contributed so much to our debt, I used to never keep an eye on what we were spending at the supermarket and could easily nip 2 or 3 times a week, one of those shops would be £120 + and the others could easily amount to another £60-100 (when all I needed was milk!!!) appalling really the amount of money I threw away, a lot of this would go straight on the credit cards too so I am pretty sure at least £10k of our debt is on food shopping!!!!!

Once you get a grasp of being in control of what you are spending again and seeing exactly where your money is going, you will find you have plenty to throw at the debt, you are lucky that you can get a 0% deal so even if you have to cut back a bit to afford the payments, use it, we aren't so lucky at the moment due to our level of debt now we can't get a BT anywhere so we just have to overpay like mad to get them down and put up with the interest

let us know how you get on:T

Tixy

The other thing to look at with life insurance is whether you have too much cover. Work out what level of cover you actually need before you start getting quotes.

andys15

You must do the 0% balance today, right now. Yes it will cost you 3%, which will be about £180, which will go onto your credit card. BUT you are paying £100 odd pound and only paying £4 of the debt each month, after 10 months it will cost you well over a grand in interest and you would have paid of £40. Do it right now

andys15

i have just noticed that you said you must pay 3% a month. Ok that is going to push up your monthly outgoings, but you must still do it. probably be £80 extra a month, so I would take £80 of your shopping budget, some might say you could reduce your shopping even further, but if you can just reduce it by the £80, after 13 months you would have paid off about £2300 of your debt as opposed to £52