Newbie in desperate need of advice

Worried-Angry-Shane

Hi everyone

This is my second attempt at posting this, as I'd spent so long on my first attempt, I had to sign back in when I pressed the submit button and lost the lot!

Brief background: house extension/renovation 4 yrs ago prior to the birth of my daughter - we couldn't afford to move from our tiny bungalow so decided to stay-put and throw money (that we didn't really have) at making our house a wonderful home for our baby.

Basically, I've not only hidden this from myself but from my wife, whose health hasn't been great and didn't want to burden her. Finally I realised I'd maxed out on the overdrafts and typed 'debt problem' into Google. I landed here and spent a whole day reading all of the articles and many of the threads on this very forum. Bam, LBM! I'm not alone and there are solutions, choices and actions. This was last Friday. I went straight home and told my wife - one of the hardest things I've ever had to do - she was more concerned for my wellbeing/health than the debt problem I'd been trying to protect her from, I was (almost) a broken man. We know we have to make significant lifestyle changes and my wife is determined to do all she can to help - I wish now I'd told her sooner!

So firstly I'd just like to thank you all for pointing me last weekend to the advice and tools that I needed to properly access and evaluate the situation. I'd secondly like to thank you in advance for any advice you can give us based on the info (SOA) below.

My immediate worry and concern is our current overdraft situation. This is our priority as we understand that without addressing this first will will never be able to tackle the credit cards and other debt. We'd truely appreciate any guidance with this. So here it is... and thanks again!

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1836
Partners monthly income after tax....... 0
Benefits................................ 120
Other income............................ 0
Total monthly income.................... 1956
Monthly Expense Details
Mortgage................................ 642
Secured/HP loan repayments.............. 42
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 66
Gas..................................... 66
Oil..................................... 0
Water rates............................. 48
Telephone (land line)................... 23.5
Mobile phone............................ 30
TV Licence.............................. 12.12
Satellite/Cable TV...................... 23
Internet Services....................... 20
Groceries etc. ......................... 400
Clothing................................ 25
Petrol/diesel........................... 45
Road tax................................ 16
Car Insurance........................... 27
Car maintenance (including MOT)......... 18
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 15
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 16
Contents insurance...................... 16
Life assurance ......................... 15.37
Other insurance......................... 0
Presents (birthday, christmas etc)...... 80
Haircuts................................ 22
Entertainment........................... 95
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1877.99

Assets
Cash.................................... 500
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 211500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98630....(642)......4.39
Secured Debt.................. 6470.....(42).......4.39
Total secured & HP debts...... 105100....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Natwest Loan...................14286.....147.......7
M&S Visa (BT)..................1216......31........3.9
Egg Visa.......................7847......175.......16.9
Finance (Blinds)...............400.......31........0
Natwest Overdraft (2)..........4400......60........19.2
Natwest Overdraft (1)..........1389......18........19.2
Total unsecured debts..........29538.....462.......-

Monthly Budget Summary
Total monthly income.................... 1,956
Expenses (including HP & secured debts). 1,877.99
Available for debt repayments........... 78.01
Monthly UNsecured debt repayments....... 462
Amount short for making debt repayments. -383.99
Personal Balance Sheet Summary
Total assets (things you own)........... 211,500
Total HP & Secured debt................. -105,100
Total Unsecured debt.................... -29,538
Net Assets.............................. 76,862

milliemonster

Worried-Angry-Shane wrote: »

Hi everyone

This is my second attempt at posting this, as I'd spent so long on my first attempt, I had to sign back in when I pressed the submit button and lost the lot!

Brief background: house extension/renovation 4 yrs ago prior to the birth of my daughter - we couldn't afford to move from our tiny bungalow so decided to stay-put and throw money (that we didn't really have) at making our house a wonderful home for our baby.

Basically, I've not only hidden this from myself but from my wife, whose health hasn't been great and didn't want to burden her. Finally I realised I'd maxed out on the overdrafts and typed 'debt problem' into Google. I landed here and spent a whole day reading all of the articles and many of the threads on this very forum. Bam, LBM! I'm not alone and there are solutions, choices and actions. This was last Friday. I went straight home and told my wife - one of the hardest things I've ever had to do - she was more concerned for my wellbeing/health than the debt problem I'd been trying to protect her from, I was (almost) a broken man. We know we have to make significant lifestyle changes and my wife is determined to do all she can to help - I wish now I'd told her sooner!

So firstly I'd just like to thank you all for pointing me last weekend to the advice and tools that I needed to properly access and evaluate the situation. I'd secondly like to thank you in advance for any advice you can give us based on the info (SOA) below.

My immediate worry and concern is our current overdraft situation. This is our priority as we understand that without addressing this first will will never be able to tackle the credit cards and other debt. We'd truely appreciate any guidance with this. So here it is... and thanks again!

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1836
Partners monthly income after tax....... 0
Benefits................................ 120
Other income............................ 0
Total monthly income.................... 1956
Monthly Expense Details
Mortgage................................ 642
Secured/HP loan repayments.............. 42
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 66
Gas..................................... 66
Oil..................................... 0
Water rates............................. 48 this is a lot, are you on a meter or rates?
Telephone (land line)................... 23.5 you can get telephone and internet combined for about this price, have a shop around
Mobile phone............................ 30
TV Licence.............................. 12.12
Satellite/Cable TV...................... 23 cancel and get freeview
Internet Services....................... 20 see above
Groceries etc. ......................... 400 wow for 3 of you?? you can easily shave at least £100 off this, probably more, have a look at the Old Style board for ideas, downshift challenge, mealplanning etc
Clothing................................ 25 make do for now
Petrol/diesel........................... 45
Road tax................................ 16
Car Insurance........................... 27 can you get this cheaper?
Car maintenance (including MOT)......... 18
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 15 what is this for?
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 16 should be able to get B&C ins cheaper
Contents insurance...................... 16
Life assurance ......................... 15.37
Other insurance......................... 0
Presents (birthday, christmas etc)...... 80 can you cut this down?
Haircuts................................ 22
Entertainment........................... 95 half this for now
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1877.99

Assets
Cash.................................... 500
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 211500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98630....(642)......4.39
Secured Debt.................. 6470.....(42).......4.39
Total secured & HP debts...... 105100....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Natwest Loan...................14286.....147.......7
M&S Visa (BT)..................1216......31........3.9
Egg Visa.......................7847......175.......16.9
Finance (Blinds)...............400.......31........0
Natwest Overdraft (2)..........4400......60........19.2
Natwest Overdraft (1)..........1389......18........19.2
Total unsecured debts..........29538.....462.......-

Monthly Budget Summary
Total monthly income.................... 1,956
Expenses (including HP & secured debts). 1,877.99
Available for debt repayments........... 78.01
Monthly UNsecured debt repayments....... 462
Amount short for making debt repayments. -383.99
Personal Balance Sheet Summary
Total assets (things you own)........... 211,500
Total HP & Secured debt................. -105,100
Total Unsecured debt.................... -29,538
Net Assets.............................. 76,862

Well done for posting and finding MSE!!!

Ok I have made some comments above

Try shopping around for all your insurances, your car insurance is costing you over £300 a year for a car worth £1k?

Grocery spend is huge, for 2 adults and a 4 year old you should be able to get this down to at the most £200 a month with a bit of work

Stop spending or cut down spending on clothes/entertainment/presents

Can your wife find some part time work?

With the adjustments I've suggested you can probably just about break even but it will mean some lifestyle changes and serious cutbacks in your current budget which is hard initially.

Do you still bank with Natwest? if so consider opening a new account with an unrelated bank to your creditors as Natwest may just decide to take money from your account towards the overdrafts without your permission

WASHER

Worried-Angry-Shane wrote: »

My immediate worry and concern is our current overdraft situation. This is our priority as we understand that without addressing this first will will never be able to tackle the credit cards and other debt. We'd truely appreciate any guidance with this. So here it is... and thanks again!

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1836
Partners monthly income after tax....... 0
Benefits................................ 120
Other income............................ 0
Total monthly income.................... 1956
Monthly Expense Details
Mortgage................................ 642 - Is this interest of repayment?
Secured/HP loan repayments.............. 42
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 66 - seems high
Gas..................................... 66 - seems high
Oil..................................... 0
Water rates............................. 48
Telephone (land line)................... 23.5
Mobile phone............................ 30 - lower the tariff or get rid of
TV Licence.............................. 12.12
Satellite/Cable TV...................... 23 - you cannot afford this either
Internet Services....................... 20
Groceries etc. ......................... 400:eek:for 3, you could reduce this easily to £300, meal plan and drop the treats
Clothing................................ 25
Petrol/diesel........................... 45
Road tax................................ 16
Car Insurance........................... 27
Car maintenance (including MOT)......... 18
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 15
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 16
Contents insurance...................... 16
Life assurance ......................... 15.37
Other insurance......................... 0
Presents (birthday, christmas etc)...... 80 - far far too much each month
Haircuts................................ 22
Entertainment........................... 95 - again far too much each month
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1877.99

Assets
Cash.................................... 500
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 211500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98630....(642)......4.39
Secured Debt.................. 6470.....(42).......4.39
Total secured & HP debts...... 105100....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Natwest Loan...................14286.....147.......7
M&S Visa (BT)..................1216......31........3.9
Egg Visa.......................7847......175.......16.9
Finance (Blinds)...............400.......31........0
Natwest Overdraft (2)..........4400......60........19.2
Natwest Overdraft (1)..........1389......18........19.2
Total unsecured debts..........29538.....462.......-

Monthly Budget Summary
Total monthly income.................... 1,956
Expenses (including HP & secured debts). 1,877.99
Available for debt repayments........... 78.01
Monthly UNsecured debt repayments....... 462
Amount short for making debt repayments. -383.99
Personal Balance Sheet Summary
Total assets (things you own)........... 211,500
Total HP & Secured debt................. -105,100
Total Unsecured debt.................... -29,538
Net Assets.............................. 76,862

I have added comments in above.

According to the Soa with the secured debt you are almost £35K in debt, not 29K as in your signature, its best to be honest with yourself.

I suggest meal planning to reduce your food bill.

I can see at least £270 per month of savings, if you reduce to entertainment, presents,mobile phone and sky/cable and reduce your food bill by £100. You are still short each month though.

Could you sell your home and buy something smaller, you have alot of equity, DO NOT consider a remortgage at this time, it rarely works and you could end up paying more in interest over the long term.

Your partner needs to get a wee job, evenings or weekends to make up the shortfall if you decide you do not want to move.

I know my advice will probably not be what you expected, but repaying debts is a long and sometimes a difficult journey, I see a way out by downsizing, otherwise you need to contact the CCCS, a debt charity and seek advice.

Well done for acknowledging your debts and for producing your SOA, its never easy, but know you have taken the first step and you know what you are dealing with, you can with the peeps help on this board make some changes in order to repay your debts.


WASHER.x.

wherediditallgothen

Good luck, I hope you get to where you need to be. At first glance, the groceries seems high. We spend around £200 per month for me, the mrs, and a hungry 7 year old boy. We don't really feel like we go without (other than takeaways, which are a very occasional treat), and the upshot of this is that I'm sure you could half your shopping bill, and chuck some of the spare cash at the overdrafts?

Worried-Angry-Shane

thanks milliemonster:
Water rates............................. 48 - meter
Telephone (land line)................... 23.5 - gonna sort this out along with our digital TV & internet
Groceries etc. ......................... 400 - and my wife cooks! she's all over this and currently switching from organic!
Clothing................................ 25 - will do
Car Insurance........................... 27 - this was the cheapest deal renewed last week (includes breakdown)
Other child related expenses............ 15 my daughters dancing club - we are reviewing this, hope a grandparent will take this on for us
Buildings insurance..................... 16 - will do
Presents (birthday, christmas etc)...... 80 - my wife has already re-budgeted this and is aiming at £25 or under
Entertainment........................... 95 - this is now on hold
My wife has only worked sporadically in the last few years due to poor health, but she's looking into ways of bringing in some cash that won't impact to much on her health - she creative like that.
yes I am still with Natwest - are you suggesting that I should setup all my dirct debits etc for bills with another bank?

Many thanks Washer: yes you are totally correct (35k), see that's why I decided to open this up on here to start with and your advice isn't totally unexpected.
There's no chance of selling and going smaller as we're currently in a 2 bed bungalow as it is. I am trying to avoid remortgaging at all costs. The mortgage is repayment.
We're currently systematically sifting through all our outgoings and I'm very hopeful that we can reduce on many of the lines you've commented on.

wherediditallgothen, many thanks

Ames

I think everyone else has spotted what I thought of, your gas and electric seem really high too.

If your wife has health problems would she be entitled to any benefits? It's worth asking a welfare rights advisor about it.

I can't understand how you're spending so much on a water meter, do you have a leak or something anywhere?

£25 a month for presents is still high. Talk to family and only buy for kids, and try and make presents as much as possible.

Definitely change banks - natwest have the right to take any money in your account, at any time, to offset against debt.

WASHER

I would recommend you open another bank account and set up your direct debits etc and have your salary paid in, as the natwest could and do recall overdrafts at short notice and they can and do take your salary as soon as it hits the account if the overdraft has been withdrawn.

Make sure the bank account you opt for has nothing to do with any of your creditors, i.e. halifax is apart of the bank of scotland etc etc.

WASHER

Is you home a new build? If not get a Hippo from your water company, they are usually free to pop into the citizen on the toliet to reduce water wastage during flushing.

My metered water bill is £49 per month for 2 children and 2 adults, and increasing, I am very careful about my water usage etc, you must think about not watering the garden, but get water butts to collect the water etc.

Water is being increasingly expensive and bills are due to rise again this year, try and watch what you use.

Worried-Angry-Shane

Ames - thanks, we hadn't thought about benefits for her so it's worth chasing up. Another reason for the over-spend has been the years of paying for her to get decent help following the failure of our National Health Service. I'm going to investigate the water element more because I thought this was average/normal. Any further advice of how to find relevant info re: water would be greatly appreciated.

Ames/Washer: it hadn't occured to me that natwest could do this but it makes complete sense! As my overdraft situation is priority at the mo I will look to changing banks immediately. Is there an easy way of doing this?

WASHER

http://www.moneysavingexpert.com/protect/setting-off

Read this, its an article from Martin.

Worried-Angry-Shane

That's great advice Washer, thank you!

Like I said, my overdraft situation is priority at the mo I will look to changing banks immediately. Is there an easy way of doing this?

Also, what would you recommend be the best way to then tackle my credit card situation?

Thanks again, really appreciate it