Spirited's SOA & Diary

Spirited_2

As you can probably tell, I'm new to the forum. I've spent the last couple of days reading through some of the threads here, and I have been spurred on by how brave you all are. So here is my state of affairs, I have included information about my health as I think it's relavent.

Brief(ish) Summary
I'm twenty years old and have been married to my husband for nine months, and living with him for the past three years. We rent a small house and have several pets. I am not currently earning, and have just left university due to a mental health condition (depression and agoraphobia) which was preventing me from attending and studying. My husband was recently demoted at work after misconduct (whilst serious, he was suffering from work related stress/depression at the time). We both want to start our own business which would allow me to do useful and fulfilling work, but with the flexibility of being able to do it in my own time as my current health requires. I fear that my husband is getting more depressed at his current job, and the business that we are looking to start would be fulfilling a lifelong ambition for him.

We have applied for a business loan which we would be putting together with savings in order to start the business. I am not certain that the loan will be approved as my husband has some personal debts and we have really been living beyond our means, especially since my husband was demoted as we have both been relying on his income.

Objectives
We need to take control of our finances and then maximising our earning potential. I really want us to be able to successfully run our own business, and we would love to start a family in the not to distant future. Owning our own home would also be a great achievement.

I'm hoping that I can get some ideas on how to best manage the money that we've got.

Statement of Affairs

Income
Husband's Net Salary: £1200
Total Income: £1200 (It was closer to £1800 in his previous position, we obviously haven't adjusted our spending yet).

Savings
Husband's Share Options: ~£4500 (next week)
My Trust Account: ~£2000 (matures on my birthday, but could perhaps get before then - but might be a bit less)
Total Savings: ~ £6500

Outgoings (Monthly, Not Debt)
Bills:
Rent: £525
Electricity/Gas: £32
Water:£33
Council Tax:£142.34
Phone: £15
Broadband: £24
Food/Pet Food: £250

Financial
Contents Insurance: £14.93
Pet Insurance: £9.50
Laptop Cover: £13.00

Car
Finance: £310 (:eek:)
Insurance: £25
Road Tax: £10
Diesel: £60

Non Essentials (before MS Budget!)
Gym Membership: £31 (unused in 3 years, my hubby seems to have a mental block about cancelling it)
Domain Name Fees: £4.50
Days Out: £20
Papers/Mags: £20
Eating out: £20
Clothes:£20
Christmas/Birthdays: £40
Pets: £20
Discretionary Spending on Gadgets/books/medicines etc: ~£100

Total: £1679

Debts (Approximate)

Hubby's Personal Loan: £6000 APR:? Payments:£198 Fixed
Hubby's Mastercard: £300 APR:15.9% Payments: ~£5-10 (This isn't used, but Gym Membership is on it)
Hubby's Marblescard: £1500 APR:17.9% Payments 2% (Not used)
Hubby's Houshold bank: £830 APR:19.9% Payments 3% (Not used)

Typical Monthly Payments: ~ £28 + £24 + £10 + £198 = £254
I have a £1200 overdraft limit: currently unused mostly (was paid off by last student loan payment) at 0% - so potential for moving balances.

I have a student loan of the order of £6k, but I haven't recieved a balance yet, so I'm not sure.

Over spend: £733 :mad: I didn't think things were that bad, I feel sick. Up to a month ago we had my student loan though so I suppose we didn't notice it too much.

Current Balances and Agreed Overdrafts
Joint Account: - £550 (-£700 Agreed ?%)
My Account: -£100 (-£1200 Agreed 0%)
Hubby Account: Within Agreed O/D Just (Don't know the current balance but agreed is -£700)

Total Debts, around 16k (I didn't even realise)

Notes: Hubby and I have already agreed spending cuts, most of which are in the unnecessary section of the outgoings. But I think there is going to need to be more. The water bill can be reduced as we are overpaying. Council Tax is a bit high as we were slow on the mark setting it up when we moved in here. If we start the new business (more local) then we can maybe give up the car, but I'll have to see what the terms are for cancelling the finance early. We need to cut back on the food and other bills - I know

The main thing is me earning, I can design websites which I hope to turn into a paying business, and the shop that we want to open, I can work there in a useful capacity.

Please don't be too harsh with me, I know it's our fault and that we need to live within our means. I have sold a few things on ebay, and I've got more that I can do.

Kindest Regards,
Spirited

In_Search_Of_Me

You are where I was a month ago by the sound of it in terms of realising how much you owe but if it makes you feel any better I owe £30,000! (excluding mort)...I can only offer tiny advice for what has worked for me in the last month...
1) Congratulate yourself in taking your head out of the sand...mine was in it for years & I cried with relief/despair/shock for two day once I actually added it all up
2) See where you can get cheaper (TV, phone, car insurance etc) & see if you are eligible for any benefits (may be able to if you are off sick)
3)Keep a diary of what you spend - its scary!! I now resent paying anything unecessary - not bad for someone who only a month ago though nothing on spending £150 a month on unecessary parking & lunch!
4) Shop cheaper...
5) Look up comps etc - gotta be in it to win it plus it keeps you busy!
6) Remember that this is going to take a while but hopefully people here (with what I can see as a few exceptions but doubt we'll ever avoid those will we eh!) will support you as many know the feelings of desperation
7) Have a big hug from me...it's hard but we'll get there, one day at a time in my case!

CLAPTON

I dont want to sound negative about the business idea but i would be very cautious about starting a business with your current level of debt.
Have you drawn up a business plan that shows the cash flow for the first year or so...e.g how will you live for the start up months, how will you continue to make payment on the debts? Will both of you run the business or will one of you work. Obviously if the business will generate cash from day one then this may not apply but most businesses absorb cash initially.

With your current level of debt, the most sensible plan would be for you both to try to maximise earnings, reduce expenditure and reduce the debts leaving you to start the busines in a couple of years time.
I know you have mentioned your health problems so it may not be immediately feasible for you to earn, but increased family income is going to be very important to reducing the debts.
You could also use your savings/share save to reduce your debts.
I dont quite understand your full debt situation as you don't say how much of the car loan is outstanding but it would make sense to use the savings to pay off the CC debts and overdraft (unless 0%). There is no point is paying off the student loan at the moment.

if the car loan is an HP agreement then you may find this site of interest

http://www.direct.gov.uk/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DebtsAndArrearsArticles/fs/en?CONTENT_ID=10013226&chk=1uPl5U

Obviously in terms of spending your 'non essential ' list has to go.
Also there are many broadband suppliers at 15 or below.

tyllwyd

Just an idea if you need to make a few pennies working from home - I do some work as an internet researcher (answering questions texted in by customers). They seem to be recruiting at the moment http://www.aqa.issuebits.com/vacancies.htm

It isn't big money, but it is flexible and homebased. It isn't easy to get onto their books, but it might be something that suits you.

lynzpower

HI & welcome!!

Just to say, this bit had me a bit :eek:

the fact that your hubby hasnt been going to the gym for 3 years and its on a 15.5% interest rate.... well you dont need to be telling you how silly he is for not cancelling it.

This just has to be priority!

Ill come back later, Im exhausted from the car boot sale today and need to kip

HTH
Lynz
x

This gym has to stop, not only for what you havent paid for yet, but for your future.

Pooky

Your food allowance is really high for a month for just the two of you - hop over to the Old Style board and look at menu planning and get that cost down...

I spend approx. £45 a week for a family of 2 adults, 2 kids, 2 cats and a parrot and we all eat well and healthily.

freda

the fact that your hubby hasnt been going to the gym for 3 years and its on a 15.5% interest rate.... well you dont need to be telling you how silly he is for not cancelling it.

Well, if you'd not been paying any min payments at all, after 3 years of £31 per month at 15.9%, you'd have cost yourself £302 in interest.

BobProperty

Spirited wrote:

Road Tax: £10
Diesel: £60

Minor nerdy point but there's no figure for maintenance and that's an odd figure for the Road Tax. Is it a recent car with a small diesel engine? Will it be big enough for your business?

Spirited wrote:

....
Gym Membership: £31 (unused in 3 years, my hubby seems to have a mental block about cancelling it).....

I picked this out, not because it is an unnecessary expense (which it is), but I am concerned that, unless you can deal with items like this, you will struggle with running a business. Have you spoken to the local Chamber of Commerce or Business Enterprise set up regarding advice and help on getting started? I see CLAPTON has already started on this line of thought.

Spirited_2

Right, I'll try and answer the bits and pieces that have come up, sorry that I wasn't thorough enough before. I was a bit in shock at seeing it all in one place.

1. Maintenance on the car, I'm afraid this is something I just didn't think of, it's new so no MOT but there are still maintenance bills, I'll have to think on that. Sorry if the road tax figure is wrong, but I just got it from an old budget that hubby had given me the car figures on - it is a diesel though, a ford focus. The business wouldn't require a larger car really.

DH got the new car nearly two years ago (the finance is for three years) at the time he was working further away and needed something reliable as his old one was falling to bits. We went for a new car as the other option we had considered - a nearly new car bought on a bank loan was going to have the same monthly payments, and with a new one you don't need to worry about MOTs etc. I don't remember the full details of the finance, but that's something else I'll try and look out.

My husband and I have discussed at length the business tonight, and we think that we need to sort out our finances before taking on the extra risk. We will certainly consider putting it off until we have a secnd household income again. I do think that in the long term we will be capable of running a business, and we are seeking advice on it, but we do really need t think about whether or not we can cope with it at the moment.

Food wise we have been better on the most recent shop (down to just under £25) but I felt I had better put in our average spend. I do hope we can manage on the lower budget though, and I am certainly looking into the tips and tricks in the Old Style forum.

RE the gym membership, we will tackle this as a priority, I suppose it's really just an indication of how lax we've been with the finances up till now. The daft thing was we gave up Sky TV six months ago when we moved into the new house - but kept the gym membership! DH feels terrible about it and has promised to write a letter, so I'll keep an eye on that.

Tomorrow I'll try and work out a reduced budget that at least keeps us within our ingoings - preferibly going as far as giving us more money to tackle debt from. I'll also have a play about with the Snowball calculator to see where I'm best going from here.

Thanks for the support,
Spirited

tesuhoha

Try watching Martin's programme, Make Me Rich on a Saturday afternoon at 4.30 on ITV2. Its full of interesting tips that you may not have thought of.

Spirited_2

So it's been quite a week coming to terms with this. Personally, only the student loan is totally my responsibility, but some of the recent joint stuff was partically my fault too, I'm not earning and I haven't said no when hubby has been spending on things for me, or us both.

I'm still really compiling together all the information from the debts, so I don't have an exact figure and debt free date yet, though I think it's important to get one to the penny. It seems to make so much difference to the people on here. Besides, it's more difficult to see that every penny counts when you are rounding to the nearest £10 or £20.

Progress so far...

* Hubby has sent the letter to the gym (phew!) by recorded delivery unfortunately as it's too important to 'get lost in the post'. Saving: £372 /year
* We've made phonecalls to various companies to get exact figures for debts.
* Looking into switching the broadband, Tiscali looks like a good deal (£14.99 for 1meg unlimited) but we are going to think it through as it's a 12month. minimum contract rather than the monthly arrangement we have now. If we go for it: Saving: £108.12 /year
* I've listed ten items (so far on Ebay) made £12.00 already, I've got two items which are currently at £57.50 together and I've just uploaded another seven. Made £69.50!
* I've been getting the guinea pigs out on the grass (real money saving, no paying for cut grass and the guineas aren't inside eating hay and veggies!) during the day. (I haven't calculated the exact saving but the food is going down more slowly).
*We've been taking the dog out for walks together instead of spending money out. Saved: ~£40
*I've drawn up some figures about what different things cost us so that we can make informed decisions.
*We've made some decisions regarding what we are giving up.
*We've got a bunch of unwanted stuff lined up for photogrphing for ebay.
* Husband checked his credit rating. Was better than expected as the last time we thought about transferring the debts we were turned down for a 0% card. The only worrisome points were a few 1 month arrears on a couple of the accounts and not being on the electral roll this year (missed the form when we moved house and never sorted it).

I know there is a long way to go, but it feels good to be finally doing something about it. I'll get hubby to phone up the ford finance place and get the remaining balance on the finance so that we know exactly where we are.

Kindest regards.