SOA - Help Needed

darloboy_2

Help!

I’ve been fire fighting for a couple of months but realizing my debts are not reducing at all, not really sure where to start, but here is my SOA, any help that can be given is appreciated! Feel like I am in a black hole of interest payments.

SOA
Monthly Incoming

Salary £1445

Monthly Outgoing

Mortgage £487
Loan £67
Council Tax £60
Gas £15
Electricity £15
Water £20
House Ins. £26
Car Ins. £30
Income Protection Ins. £30
Sky £42
TV Licence £11
BT £12
Internet £17
Fuel £100
Social £120
Food £120

Total £1172

Outstanding Debts
Loan (included above), £4700 APR 6.9%, 90 months remaining, £67 per month repayment

Egg Card (not included above), £3039 (credit limit £3100), APR 15.9%, £64 per month repayment (this is swallowed up entirely by £40 interest and £24 repayment insurance, the debt reduces by 7p per month currently.

Virgin Card (not included above), £4853 (credit limit £6400), APR 15.9%, £100 per month repayment (interest uses up £46, repayment insurance £29, and £25 reduces from the balance.)

Reference my mortgage, this is made up of £391 per month mortgage, and £91 per month unsecured loan over the life of the mortgage (34 years left). I have 2 years left on fixed term.

The only suggestion I really have so far is off a friend, who thinks by changing my mortgage to interest only this would save £60 per month in the short term.

Reference other sources of funds, I have a First Direct Gold Card with a £5,400 limit, although the balance is currently £0, and having spoken to my bank last night (also First Direct), they have offered me loans up to 8 years of £12,000 (£196.22 p/month 9.90% APR), £10,000 (£163.52 p/month 9.90% APR) and £8,000 (£134.59 p/month 10.90% APR). I got these just as indicative figures to see if I still had any credit options left, and what alternative funding would cost.

Any help anybody can offer would be fantastic, need to make a start on these now otherwise I don’t think I will ever be able to get out of this mess 

Thanks in advance!

Craig

CLAPTON

firstly i would get rid of the income protection insurance and the PPI on your ccs and loan (if its on the loan).
At the very least there is no real point in having income protection and also paying repayment insurance on the CCs. They are expensive and rarely actually pay out anything. That would save 30+24+29 = £82 per month (£984 per annum) to help pay off the debts more quickly.

i dont think consolidating your loans is a good idea...i would guess you have already done that and only built up new CC debt. Much better to reduce spending and live within your income and get rid of the debt that way.
Your SoA shows there ought to be another £100 spare...presumably its actually being spent. A spending diary is a good idea to find out where all the spare money actually goes. Also you dont seem to have allowed for many of the yearly type costs e.g car tax, AA/RAC cover, servicing, odd car repairs, ...do you go on holiday or buy presents at xmax etc?.any money spent on the house, appliances ?..you need to work all these out and divide by 12 to get a monthly equivalent that needs to be saved for so there is money available when needed.


Social spending at 120 is not affordable with this level of debts...some of this should go to paying off the CC debts.

if your credit record is OK then consider getting the best 'life of balance' CC or a 0% card . although it wont reduce monthly expenditure it does mean the the debts reduce much more rapidly. look at Martins recommendations about CC cards

finally can you increase your income..overtime or a second parttime job?

Quincifer

I'm not too knowledgable on financial products so i'm not going to suggest anything like that.

£42 for sky shows you have quite a big package, maybe you should cut down on a few things you don't really watch (kids/sport/documentaries etc) to drop the bill a bit - i'm sure the minimum is only about £16 a month.

Also you should look at getting your gas and electricity on a dual fuel bill (if you haven't already) because that can save you a bit too!

You are lucky that you have a little bit of spare aswell so maybe save small change (1p-20p) or £2 coins, or maybe put away £5 a week for a few months and you can pay a chunk off a debt every so often.

Good luck! x

gallygirl

DON'T get a consolidation loan, they won't help you out long term.
I can only agree with what has already been said - ditch the payment protection, look at new 0% cards, curb the £120 a month spending & cut the sky package. Better to do this than go to interest only on mortgage - that is storing up probs for the future.
Not a lot of scope for other savings - £120 for food is reasonable, have a look at Money Saving Old Style Board for savings - start shopping at Netto, Aldi, Lidl. Some is not as good quality as better known supermarkets, but most is as good, and Aldi Baked Beans are the best! Mushrooms & cherry toms 1/2 the price in Netto they are in the Co-op.

Final advice is to set yourself up a spreadsheet, see references elsewhere to snowballing, it's a great inspiration to see when debts will be cleared off and then try to bring it a little forward. You can pay tiny amounts off the credit cards by phone (NOT mobile as not a free call!), or by internet. A penny apid is probably 2p interest saved!

You've come to the right place - good luck!

calleyw

As has been already said please DON'T get a consolidation loan.

The only things that I can see you could cut back on if you really want to to give you some extra cash.

Sky £42 -Could this not be dropped to lowest package would save something

Social £120 - I don't even have a social fund in my budget let alone a social life. You mean you have friends Could you not shave £20 a month off. Rather than go out why not get friends to come around your house. You provide nibbles and a few soft drinks they provide the wine.

Food £120- you should be able to drop this easily if you are only one ( I am assuming that from your SOA). I spend £100 a month on food only for 2 hungry adults. I reckon you can shave about £40 a month off and still eat well. I buy what is on offer. I don't buy a lot of value brands. We eat roasts on a sunday with extras left over for meals during the week.

Also ditch the repayment insurance on the CC. Rarely pays outs would mean you pay more off the cards.

Lastly is there any way to increase your income. Second job a couple of nights aweek. Like stacking shelves in a supermarket on a friday and saturday night, always in demand as no one wants that shift. Boring hard work. But money and means you would save money as you could not go out.


Yours


Calley

david_hellier

Well at least you're cash positive. You have £273 per month to splash out on or £68 per week. I suggest you use this for socialising, clothes etc. If you feel this is not enough, then you are going to have to cut down your spending. SKY needs replacing with Freeview and get rid of the IPI. Your food allowance of £37 should also be added to the £68 making £105 per week.

Buy a little note book and on Monday write in it £105. Make a note throughout the week of everything you buy or each cash withdrawal. Each week if you spend less than £105, then you're on top of it. Do the same each Monday. Forget about your bank's balance. Stick to your budget for a few weeks, then start shopping round for cheaper deals on all your overheads so as to raise your £105. Control first, reduce later.

jay78

Please stop paying the insurance on your credit cards. Also what does your income protection insurance cover you for?

As for the credit cards you can either apply for 0% credit cards and move the money around or if you have a very good credit rating, ie no missed payments apply for a LOB (life of the balance) low interest rate card. The rates vary from as low as 4.95% to 6.9%.

The interest on your loan is fine, some cards will allow you to BT loans.

CosmoCat

i think a spending diary is in order to see exactly where you spend your money and what should be cut out.

why not visit the Old Style board for some meal planning tips and advice on how to feed you and yours a little cheaper.

as said before, if you have good credit, why not get yourself some 0% cards and switch. and definitely get rid of the repayment insurance.

do you use your extra money for savings or putting aside for big one off spends such as birthdays, christmas etc.? you should have a definite plan for these occassions. have a look at your history of spending for these.

all the best to you and welcome to MSE!

CosmoCat

you could also try taking out a cash withdrawal at the beginning of the week and using this money for all your spends for that week. set yourself a decent (but not extravagant) limit, try to spend cash only and leave your cards at home.

do this after figuring out your actual spend from your spending diary and see if you can save on that.

Jaymz

The insurance on your credit card is crippling, if I was in your position I would cancel that.
As mentioned above, also keep a diary of your spending so it will show you more areas you could cut down

Steve_Snowdon

CLAPTON wrote:

firstly i would get rid of the income protection insurance and the PPI on your ccs and loan (if its on the loan).
At the very least there is no real point in having income protection and also paying repayment insurance on the CCs. They are expensive and rarely actually pay out anything. That would save 30+24+29 = £82 per month (£984 per annum) to help pay off the debts more quickly.

i dont think consolidating your loans is a good idea...i would guess you have already done that and only built up new CC debt. Much better to reduce spending and live within your income and get rid of the debt that way.
Your SoA shows there ought to be another £100 spare...presumably its actually being spent. A spending diary is a good idea to find out where all the spare money actually goes. Also you dont seem to have allowed for many of the yearly type costs e.g car tax, AA/RAC cover, servicing, odd car repairs, ...do you go on holiday or buy presents at xmax etc?.any money spent on the house, appliances ?..you need to work all these out and divide by 12 to get a monthly equivalent that needs to be saved for so there is money available when needed.


Social spending at 120 is not affordable with this level of debts...some of this should go to paying off the CC debts.

if your credit record is OK then consider getting the best 'life of balance' CC or a 0% card . although it wont reduce monthly expenditure it does mean the the debts reduce much more rapidly. look at Martins recommendations about CC cards

finally can you increase your income..overtime or a second parttime job
Payment protection is often taken as a lump some at the start (FB banks) and added to the loan so you cant get out of it.
If you are paying monthly and still want cover go to https://www.clever-money.co.uk for the cheapest I have found.