Please Help

BeautyandtheBeast_3

debt_free_dreamer wrote: »

Thanks - I know the kids school lunches are so expensive - £1.90 per day and I've got two kids. The thinking was they would have a hot, healthy meal during the day - but due to wages, not entitled to free lunches.

will consider changing to packed lunches in the new term in September.

Do they go to a state school?

bank_of_slate

debt_free_dreamer wrote: »

Thanks for the advice - The mortgage payment is huge - we've already remortgaged in the past.

In which case please don't do it again, it might seem like a quick fix solution but it's just a spiral into more trouble! If you have remortgaged in the past and... dare I guess consolidated in the past looking at the loan in your SOA.
You need to change your behaviours now otherwise you'll just re-mortgage again and then continue to build further debt!

It all just seems so daunting - we've literally been getting to the end of the month with no cash left - and have been using credit cards to live (even, and I know this is mental, but even sometimes drawing cash off the credit cards). I know we need a total change in the way we live.

Is there anything you can sell via Ebay to clear those high interest store cards? They are always the worst, once those are paid it'll free up cash to pay off the lower APR cards and debts.

I've filled in my details on the CCCS website, and have a reference number - I'm going to call them tomorrow.

Good for you, it's a great start, keep posting on this forum for lots of advice and support, show your posts and the replies to your other half so you can start battling this and changing things together!
If he still thinks re-mortgaging is the best solution and you're following the advice on here then the disagreement won't help matters!
Thanks again for your help.

Look around on the Freebies no spend required board and sign up for the free cinema tickets which means entertainment at no cost :T

Let us know what the CCCS say.
...Linda xx

poppy10_2

BeautyandtheBeast wrote: »

Hi there -
Im just confused as to how 2 children can spend £19 per week on school lunches.

That £9.50 each per week - nearly £2 per day each.

In my local authority that's actually pretty cheap.

Fire_Fox

debt_free_dreamer wrote: »

Thanks for the advice - The mortgage payment is huge - we've already remortgaged in the past.

It all just seems so daunting - we've literally been getting to the end of the month with no cash left - and have been using credit cards to live (even, and I know this is mental, but even sometimes drawing cash off the credit cards). I know we need a total change in the way we live.

I've filled in my details on the CCCS website, and have a reference number - I'm going to call them tomorrow.

Thanks again for your help.

So if you've done this you know from experience that consolidating or more borrowing does not work.

BeautyandtheBeast_3

poppy10 wrote: »

In my local authority that's actually pretty cheap.

ask to see the menus!!

the_cat

debt_free_dreamer wrote: »

We are seriously considering re-mortgaging - my husband reckons we could free up around £50K cash to pay off our debts,
:embarasse

This quote shows exactly why remortgaging is the worst possible idea....... you are not paying off your debt if you remortgage. You are simply ensuring that if you are unable to make the payments, you will lose your house

gfplux

Hello debt free dreamer,

You have made a great start on the cure by posting your SOA.

You have received lots of very, very good advise. Are you going to take any of it? I seem to hear a lot of ifs and buts!
Debt normally comes by spending MORE than you EARN. We all know that but sometimes we can not see the wood for the trees. If you want to get out of debt you have to change that habit today. Will you?


Examine yourself and your partner, is this really your “light bulb moment.” If you find plenty of reasons and excuses not to act immediately then the bulb has not come on properly. If you can not do without A Sky contract, Mobile Phones, Holidays, Fitness/Sports Membership, then again the bulb has not come on properly.


As I said you have made a great start by posting your SOA. Did your partner help you with it or are you the only one that sees the great danger you are in.
You are not in an impossible situation. You can be cured, but only you can do it. We can only offer advise and support.


Good Luck. Looking forward to your next post.

Katie-Kat-Kins

Right First things first, you need to get out of the mind set of "we both have a good job we deserve....." You are skint! You are at risk of bankruptcy and all the scary things that go with that because you have been spending way more than you earn for a long long time. You need to have a fundamental shift of attitude and you need to have all the family with you on this.

I'll make some suggestions:

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.................... 1
Monthly Income Details
Monthly income after tax................ 1900
Partners monthly income after tax....... 1500
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3400 Over £40k a year net, there is no excuse for not being able to live within your means on that kind of salary, plenty of people manage a mortgage and children on less than half this so you have been frittering your money away. This has to stop.
Monthly Expense Details
Mortgage................................ 1039 Check whetheryou can go interest only or extend the term to reduce your payments for a while so you can clear some of the other debts. DO NOT REMORTGAGE!
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 111
Electricity............................. 49
Gas..................................... 70 Your combined gas and electric spend is high, check your meters and make sure you aren't in credit, if you are reduce the direct debit. Moniter your usage by checking the meter weekly (or even daily) when you have a weekly average compare switch and save. Keep checking the meters weekly to make sure usage doesn't creep up and challenge yourselves to get your usage down week on week. There are great tips on the utilities board.
Oil..................................... 0
Water rates............................. 36
Telephone (land line)................... 33 This is high, are you gettting the best deal? Are you using excessively? I pay less than £15 pcm
Mobile phone............................ 50 This is stupidly high! If they are outside of contract go to PAYG and limit yourselves to £10 credit per month MAX, if still in contract phone your provider and tell them you are in hardship and can't pay, ask them to switch you to PAYG or reduce your contract to the minimum, there should be a £15 contract available. Make sure you don't go over your free minutes, and use your free minutes up before paying for calls on the landline.
TV Licence.............................. 28 Are you sure?
Satellite/Cable TV...................... 40 Ditch this if you can, if you can't reduce it to the minimum package. Freeview is great if you can get that, but if not life really is possible with just five channels believe me I'm doing it!
Internet Services....................... 0 ??
Groceries etc. ......................... 300 Go to the Old Style Board for tips on reducing this you really should be able to cut it alot. If the kids are on school meals then that should be their main meal and they should only need a sandwich or beans on toast or something in the evening. If the school meal isn't filling them up then send them with pack up and cook from scratch in the evening.
Clothing................................ 60 You are in financial trouble, this needs to be cut to essentials only. Use what you have or sell it on ebay and buy with the profits only.
Petrol/diesel........................... 80 That is high!! On one car are you driving a gas guzzler?? Is it essential? Look very seriously at your use and cutting it down, maybe even changing your car for a more efficient cheaper to run model. Moniter your weekly mileage and fuel use, work out your mpg and reduce it.
Road tax................................ 20 Again high, what are you driving???
Car Insurance........................... 27 Not bad but try comparing to switch and save.
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0 School meals and so on should go here.
Medical (prescriptions, dentist etc).... 17 What is this? Is it essential or could you cut it out? If it is prescriptions then get an annual pre-payment certificate.
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 You do have this I presume, check, then compare switch and save.
Contents insurance...................... 35 Compare switch and save
Life assurance ......................... 45 Compare switch and save
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 Can you cut this? It is £240 a year, level with people tell them you can't afford presents, do something nice for them, make something or go "spend neutral" by using money made on ebay/using loyalty points etc. I save all my points to use for xmas.
Haircuts................................ 15 This isn't bad, but remember you are skint now, can you cut it further, model nights, trainee hairdressers etc, can you do the kids yourself or even DH?
Entertainment........................... 50 This has to come right down, what are you spending it on? Free or very cheap entertainment only now and more staying home.
Holiday................................. 40 You can't afford a holiday thousands of people go without every year or save sun vouchers to go. Until your debts are under control you will have to sacrifice this.
Emergency fund.......................... 20 It is wise to have a little bit put by but it must be for genuine emergencies and you could consider using it against your debts if it builds up. Do not be tempted to use this as a piggy bank to raid at the end of the month, if you are doing this then stop putting it aside and target it at a debt.
Total monthly expenses.................. 2205

Assets
Cash.................................... 0
House value (Gross)..................... 170000 Could downsizing/moving to a cheaper area be an option???
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 0
Total Assets............................ 171300

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 95000....(1039).....0
Total secured & HP debts...... 95000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Egg Loan.......................16173.....413.......6.9
Next Mail order................444.......42........26.49
Homebase personal fin..........260.......2.........27.9
Egg Credit Card................0.........50........0
Egg Credit Card................7100......230.......25.9
Barclays Finance...............1500......64........0
Barclaycard....................7317......165.......26.9
Thomas Cook Credit Ca..........1715......44........18.9
Marble Credit Card.............8179......205.......21.95
Lloyds TSB M/Card.............3688......80........0
Barclaycard....................6890......140.......26.8
Dorothy Perkins acct...........405.......9.........29.9
Freemans mail order............86........18........0
Littlewoods mail orde..........164.......8.........35.7
First Direct C. Card...........1115......35........21.9
Total unsecured debts..........55036.....1505......-
I'm not going to go through all of these because others have done it all ready but you really need to stop yourself from spending any more on these credit cards or catalogues. You can't trust yourself with any kind of debt, you can now only spend what you have in your pocket. Get a DMP agreed so that you are making payments you can afford and charges aren't being added.

Monthly Budget Summary
Total monthly income.................... 3,400
Expenses (including HP & secured debts). 2,205
Available for debt repayments........... 1,195
Monthly UNsecured debt repayments....... 1,505
Amount short for making debt repayments. -310
Personal Balance Sheet Summary
Total assets (things you own)........... 171,300
Total HP & Secured debt................. -95,000
Total Unsecured debt.................... -55,036
Net Assets.............................. 21,264
Created using the SOA calculator at makesenseofcards.com
Reproduced on Moneysavingexpert with permission, using IE browser.

In addition, I have an overdraft with my bank which I use to the max each month of £1000. my husbands overdraft is £1,500, which again is used each month. You need to include these as debts with the interest rates. I suggest going over to a basic bank account each (with no overdraft facility) and then agreeing a DMP to pay off your overdrafts too.

The other payment I have is school lunches which amounts to £19.00 per week (£76 per month) This is only worth while if your children are really getting a hot nutritious meal every day and therefore do not need a full evening meal. If you still have to cook them a full dinner rather than just tea then ditch them and do pack up.

I also have gym fees to pay for my two daughters of £60 and £40 per school term. This is £300 a year, how many times do they go? It is a lot of money, don't you have a gym club at a council run leisure centre or community centre that would be cheaper or even at school. I understand you don't want to stop them doing their hobbies but you need to keep it reasonable.

I'm not sure tht everything is captured here, and there are some gaps in some of the figures (don't have all of the APRs and all of the outstanding figures to hand) but its a start. Find them out and fill them in asap, this is important if you are going to calculate things accurately.

We are seriously considering re-mortgaging - my husband reckons we could free up around £50K cash to pay off our debts, but I'm not sure this is the best way to go??? No don't as previous posters have said this is swapping unsecured debt for secured debt, look into going interest only or extending the term to reduce your payments so you can pay the other debts more quickly.

But I'm struggling to see another way - we get to the end of the month and there is literally no money left - we have to find a way to break the back of this debt. The way is to reduce your expenses - drastically, you have a decent income, it should be possible to clear these debts.


Lots to do now to get your budget sorted but you should feel more positive when you are taking action. You also need a serious chat with your family, your DH need to be on board fully, your kids need to know things will be a bit tighter (this should be age appropriate don't scare them but they need to know that treats will be for special occasions only etc).

If you have extended family level with them too, they can help by minding the kids so you can do a second job or buying practical presents like clothes (or a terms gym membership) for christmas and birthday and avoiding putting undue pressure on you.