Starting to drown. Please help!

loulou71

Hi everyone
Have been reading some of the forums and it seems there are people out there who can help me.
We are starting to drown and we need help. I currently work 3 days per week and can't do anything about this until Sept 2010 at the earliest.
Here's our SOA, hope someone can give us some advice.

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 1600
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2900
Monthly Expense Details
Mortgage................................ 1070
Secured/HP loan repayments.............. 300
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 145
Electricity............................. 64
Gas..................................... 0
Oil..................................... 0
Water rates............................. 29
Telephone (land line)................... 40
Mobile phone............................ 60
TV Licence.............................. 12
Satellite/Cable TV...................... 30
Internet Services....................... 0
Groceries etc. ......................... 250
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 35
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 50
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 35
Pet insurance/vet bills................. 25
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 9
Other insurance (Life insurance & critical illness)......................... 130
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2304

Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 225000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 180000...(1070).....5.8
Secured Debt.................. 9500.....(300)......7.1
Total secured & HP debts...... 189500....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Virign.........................1900......25........0
Virgin - Hubby.................900.......25........0
Total unsecured debts..........2800......50........-

Monthly Budget Summary
Total monthly income.................... 2,900
Expenses (including HP & secured debts). 2,304
Available for debt repayments........... 596
Monthly UNsecured debt repayments....... 50
Amount left after debt repayments....... 546
Personal Balance Sheet Summary
Total assets (things you own)........... 225,000
Total HP & Secured debt................. -189,500
Total Unsecured debt.................... -2,800
Net Assets.............................. 32,700


We have thought about taking a mortgage payment holiday because we have a £2000 overdraft as well. Or possibly trying to get our mortgage lenders to let us do interest free for a while.

loulou71

Forgot to mention, we have thought about taking a mortgage payment holiday because we have a £2000 overdraft as well. Or possibly trying to get our mortgage lenders to let us do interest free for a while.

WASHER

loulou71 wrote: »

Hi everyone
Have been reading some of the forums and it seems there are people out there who can help me.
We are starting to drown and we need help. I currently work 3 days per week and can't do anything about this until Sept 2010 at the earliest.
Here's our SOA, hope someone can give us some advice.

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 1600
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2900
Monthly Expense Details
Mortgage................................ 1070
Secured/HP loan repayments.............. 300
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 145
Electricity............................. 64
Gas..................................... 0
Oil..................................... 0
Water rates............................. 29
Telephone (land line)................... 40 - QUITE HIGH
Mobile phone............................ 60 - FAR TOO HIGH
TV Licence.............................. 12
Satellite/Cable TV...................... 30 A LUXURY
Internet Services....................... 0
Groceries etc. ......................... 250
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 35
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 50
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 35
Pet insurance/vet bills................. 25
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 130 - THIS IS VERY IMPORTANT, BUT ITS SEEMS VERY HIGH
Other insurance......................... 9
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2304

Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 225000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 180000...(1070).....5.8
Secured Debt.................. 9500.....(300)......7.1
Total secured & HP debts...... 189500....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Virign.........................1900......25........0
Virgin - Hubby.................900.......25........0
Total unsecured debts..........2800......50........-

Monthly Budget Summary
Total monthly income.................... 2,900
Expenses (including HP & secured debts). 2,304
Available for debt repayments........... 596
Monthly UNsecured debt repayments....... 50
Amount left after debt repayments....... 546
Personal Balance Sheet Summary
Total assets (things you own)........... 225,000
Total HP & Secured debt................. -189,500
Total Unsecured debt.................... -2,800
Net Assets.............................. 32,700

Welcome to DFW.

I have added comments in above.

You say you are drowning, you have £2800 of unsecured debt and £9500 of secured debt and almost £546 disposible income each month, is this SOA correct? With that amount of disposible income you could comfortably repay this debt within 36 months and still have a reasonable lifestyle.

WASHER.x.

poorandindenial

Hi there and welcome to the site

the first thing that stands out is the £130 a month on the life assurance, is this a typo??? It is a hige amount (£1560 a year:eek:)

the next thing is the amount you spend on TV/telecoms. You need to cut down those mobile bills and also the amount you spend on TV/Landline

You should have over £500 a month left after all your outgoings, do you really have this or do you find that the money just sort of runs away? (am guessing you don't as you feel like things have got out of control) Do a spending diary to see what you are really spending and record EVERYTHING (even the odd chocolate bar etc) and review to see how much you fritter away or where you have perhaps underestimated your outgoings.

then go to the snowball calculator (https://www.whatsthecost.com/snowball.aspx) and see how much sooner your dbts could be paid off if you could 're-find' this money.

WASHER

loulou71 wrote: »

Forgot to mention, we have thought about taking a mortgage payment holiday because we have a £2000 overdraft as well. Or possibly trying to get our mortgage lenders to let us do interest free for a while.

Can you add this into your SOA, it will make it easier for the peeps on here to get a full picture of your financial status.

Press edit at the bottom of the post to enter the figure.

Are you in arrears with anything?

loulou71

Thanks for the quick responses. I think we do fritter money away - birthdays, take-aways, etc, but that is all going to stop. The £130 life insurance and critical illness is what we took out when we got our current mortgage - is that still too high?

savingforarainyday

Your insurance does seem high. Was it sold to you when you took the mortgage out. We had some sold to us when we took a mortgage out with Halifax, but cancelled it in favour of separate life insurance, mortgage payment insurance etc.

Which cost us about £21 per month for the life insurance to cover the mortgage; and £28 to cover loss of income. Shop around:D. Critical illness is a bit of an odd one because a lot of critical illnesses are often excluded.

Tixy

Hi Loulou

If you bought the insurance from the mortgage company then you will almost certainly be paying way over the odds. Martin has written an article which is useful to read (under insurance) but if you are both in reasonable health I would expect you to be able to get enough cover for perhaps £50. So a potential big saving there.

I'd suggest you need to start a spending diary to work out what extra you are (or have been) spending money on. In my opinion its best to give yourself a small entertainment/treats budget rather than having none at all and just using some of the 'surplus'. Set a small budget and then make sure you stick to it.

As others have said review your media - £70 for landline & satellite is high (assume this also includes broadband?) you should be able to get all 3 as a package deal for less than £50.

Mobiles really need to be cut. Is this for 2 people? If in contract ask to switch to a lower tariff, if out of contract shop around (also look at PAYG which is much cheaper than it used to be and you are not tied in to any cost).

Groceries are high - should be able to cut to £200 easily, then gradually aim for £150. Try meal planning, and dropping to a lower brand, also batch cooking and freezing meals will help stop the takeaway temptation.

You haven't included road tax or petrol?

Your overdraft is probably your most expensive APR. But its the debt people often find hardest to clear, either make a consious effort to use less of it each month and ask your bank to reduce the limit by say £600 every 3months or you may find it easier to open a new bank account and transfer wages & dds over to the new account (one without an overdraft). Then you can set up a standing order to start repaying the overdraft.

How soon until your 0% virgin cards run out? The APRs are likely to jump on these so once the od is cleared then start making overpayments to whoevers 0% virgin deal finishes first.

Is the secured debt a loan on the house? or a car or something else?

Another suggestion is to set up a savings account where you put money aside each month for 1/12 of the annual cost for things that you don't incur each month (such as road tax, car servicing & MOT, presents etc). That way you spread the cost over the year and don't have to reach for the credit cards when you need to pay for something.

Just my suggestions
Good luck