Don't know how we'll eat this month

Worriedsick_2

Dear All,

After a years maternity leave and various other expenses related to improving our property, we're in serious trouble.

I used the SOA calculator and pasted the results below, but this is rosier than things will actually be shortly. We have 3 cards on 0% interest which expire from Feb 2010 - once these payments go up to normal levels, we'll be in an extremly bad situation.

We have been using credit cards to buy food etc each month, but had out lightbulb moment a week ago when we finally maxed all of our cards. I don't know how we'll eat next month - great in time for Christmas.

I've emptied the cupboards and freezer this week to survive and downgraded my daughters nappies to supermarket brand but find I just use more of them.

I buy meat at the local butcher for my husband and daughter and I'm vegetarian.

I spoke to Payplan today who recomended a DMP for myself and an IVA for my husband - should we do it??

Electricity and gas figures include arrears payments.

Any help / advice would be appreciated.


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................ 1205
Partners monthly income after tax....... 2049
Benefits................................ 91
Other income............................ 0
Total monthly income.................... 3345
Monthly Expense Details
Mortgage................................ 873
Secured/HP loan repayments.............. 683
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 149
Electricity............................. 120
Gas..................................... 73
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 10
Mobile phone............................ 52
TV Licence.............................. 12
Satellite/Cable TV...................... 10
Internet Services....................... 10
Groceries etc. ......................... 400
Clothing................................ 30
Petrol/diesel........................... 100
Road tax................................ 18
Car Insurance........................... 56
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 140
Childcare/nursery....................... 95
Other child related expenses............ 66
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 25
Contents insurance...................... 20
Life assurance ......................... 18
Other insurance......................... 14
Presents (birthday, christmas etc)...... 20
Haircuts................................ 60
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 40
Total monthly expenses.................. 3194

Assets
Cash.................................... 0
House value (Gross)..................... 250000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 252000

Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 235000...(873)......3.04
Secured Debt.................. 21666....(683)......9.66
Total secured & HP debts...... 256666....-.........-
Unsecured Debts
Description....................Debt......Monthly.. .APR
Halifax mastercard.............2250......41........22.95
Barclaycard....................4600......110...... .24.9
Barclaycard....................1000......25....... .27.9
Bank OD........................700.......20........NaN
Bank OD........................2500......30........NaN
Next...........................510.......45....... .26.49
Virgin CC......................3500......25........0
Virgin CC......................3500......25........0
Halifax mastercard.............7700......65........0
Total unsecured debts..........26260.....386.......-

Monthly Budget Summary
Total monthly income.................... 3,345
Expenses (including HP & secured debts). 3,194
Available for debt repayments........... 151
Monthly UNsecured debt repayments....... 386
Amount short for making debt repayments. -235
Personal Balance Sheet Summary
Total assets (things you own)........... 252,000
Total HP & Secured debt................. -256,666
Total Unsecured debt.................... -26,260
Net Assets.............................. -30,926

SailorSam

The first things that hit me in your expense list were:
Haircuts £60 a month, seems a lot. Go to a local college and get your hair done there.
Mobile phone £52, could you make do with your landline.
Cable Tv £10, perhaps just get a freeview box.
Groceries £400, people here can give you lots of help to bring that down.
Other travel £140, what is this, can it be reduced.

Good luck.

MrsTinks

Personally I'd think a joint DMP would be better but I honestly dislike IVAs so be aware that my view will be biased I just think IVAs are too inflexible and one hiccup and you're in trouble. DMPs are a bit more flexible should something happen...

1 - how did you end up in this much debt? You say to buy food but that's a lot of food! You need to work out where the money went to make sure you don't end up in the same position again.
2 - Can you do more hours or are you already doing FT work now you have finished ML?
3 - Have you thought about selling your house to pay off the mortgage and secured loan? Could you rent for less than what it's costing you at the moment to pay these two debts?

Yes there are areas you can cut back on your SOA but sadly... I don't think you can cut back enough unless you can also significantly increase your income which means you have no choice but some form of debt management like a DMP/IVA/BR...

Worriedsick_2

Thanks for the advice on the local college - I'll check that out.
Can't reduce the travel - it's my train fare to get to work.
Not sure about the mobile phone - kind of need a mobile when you have a toddler in nursery for emergencies - don't think we can lose it - and it's £56 for us both. Maybe we should go pay as you go.
Thanks

MrsTinks

If you can't live without a mobile then go PAYG...

LittleMissSkint

I'm sorry I can't help much but if you're looking for a good mobile deal I am with O2 on PAYG and I top up £10 a month and get unlimited calls and texts to all O2 numbers - all my family are on O2 and I don't have any friends :rotfl:

Worriedsick_2

We ran up the initial debt on a second car (we don't have it anymore) whilst I was learning to drive, home improvements on our last property and a wedding.
The credit card debt has been run up in the last 2 years, o pay for general living whilst I was on ML for 12 months and then to make up my new PT salary as we don't seem to have adjusted well to it at all. Also, we moved in to our new house when I was 7 months pregnant and had to get a new kitchen and bathroom to make it liveable with a newborn. so that's about it really.

I can't go back to work FT as I earn pretty much exactly what it costs me to travel to the office and for my childcare costs. The only reason I bring home a bit more it that I work at home 1 day a week and my Mum helps with my daughter so my costs are 0 for this day. My husband also pays for half the childcare costs via childcare vouchers from his salary.

Seems pretty hopeless I think.

MrsTinks

Well it'll mean cutting back seriously on your expenses and going for option 1 or 3 above...

MrsTinks

Also - I would start looking for a job closer to home if you can. It might take a while to find one but if you don't look...

ampersand

Dear Worriedsick, please call CAP right now - free phonecall here 0800328006.
We don't know your area - you needn't say here - but CAP will help you from the first instant - Christians Against Poverty - much recommended by Martin and you need not fear Church proselytising. They are simply good people, VERY good at dealing with situations like yours.
If you want to read mumoftwins harrowing experiences over several years, that would give you some idea.
They have had the Best Small? Business to work for Award 2 years running I think.
Good people, caring, realistic and you will be safe and feel safe for placing your affairs with them.
You are doing well by coming here BEFORE worse begins i.e. calls at the door, with you as Mum to a little one.
I'll hang on here till I see your acknowledgment of this post.
Alll will be well...you may know the rest of the quotation[Mother Julian of Norwich] - it comes out on these Threads suitably often.
Bless you - soft hugs.
################
Also, definitely find your local College's Beauty/Hair salon. They have to be well -supervised as part of their training and are often needing to do well with your hair as an Assessment. Cheaper, less guilt-ridden and you WILL feel good about it. £60 monthly includes OH? Couldn't you acquire this skill for him too?
Just a thought.

redsquirrel80

Unless I'm missing something you need to find £235 to break even each month without spending any more on cards? If that is the case I don't think it's hopeless at all.

For two adults and a young child I think you could easily cut at least £100, maybe £150 off your groceries - have a look on here for cheap food ideas - http://forums.moneysavingexpert.com/forumdisplay.html?f=33

Definitely look at local colleges for haircuts - will be more like £5 (is that £60 for both/ all of you?)

Do you really spend £20 every month on medical expenses or is that just an estimate? And do you need to spend £30 every month on clothes?

You might have to go for a DMP but you could consider negotiating with your creditors yourself to offer lower monthly payments for a while.