My SOA- feel free to rip apart..

kaz0705

Hi all,

I've been reading Martin's tips for a while now but have finally made the commitment to sort my debt out this year. I've done the SOA and would welcome any advice. I've left out some things like 'entertainment' because, frankly, such things are dictated by how much money I have! However, I am starting a money diary from today so will have more of an idea of where my money's going (I know this is a terrible thing to admit but I suspect it's mostly going on alcohol as a young girl in the big smoke with lots of sociable friends... First step: cut down on drink!!)

Statement of Affairs and Personal Balance

Monthly Income Details
Monthly income after tax................ 1572.49
Partners monthly income after tax........0
Benefits................................ ..........0
Other income....................................0
Total monthly income.................... 1572.49
Monthly Expense Details
Mortgage................................ ......0
Secured/HP loan repayments.............0
Rent.................................... ......400
Management charge (leasehold property).. 0
Council tax............................. .59
Electricity............................. ..42
Water rates............................. 29
Telephone (land line).................11.25
Mobile phone............................ 20
TV Licence............................... 0
Satellite/Cable TV...................... 0
Internet Services....................... 7.5
Groceries etc. ......................... 50
Contents insurance...................... 8.4
Total monthly expenses.................. 627.15

Assets
Total Assets............................ 0
No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt...... Monthly...APR
House of Fraser..............3848.89...202.8.....19.9
HSBC...........................4523.65.......113.......21
Abbey..........................1699.29......51.04.....23
HSBC Overdraft.................600......... 0.........19.9
Friend...........................1632.57.......75........0
Abbey Loan.....................2871.9......273.4.....14
Total unsecured debts....15176.3...715.24....-

Monthly Budget Summary
Total monthly income.................... 1,572.49
Expenses (including HP & secured debts). 627.15
Available for debt repayments........... 945.34
Monthly UNsecured debt repayments....... 715.24
Amount left after debt repayments....... 230.1

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -15,176.3
Net Assets.............................. -15,176.3


I'd also like to add that I have tried getting a loan (twice this month) and used one of the tools to see which cards are likely to accept me for 0%- capital one at 34% for life was the result. I've also called all my cards to ask them if they can offer me better interest rates but no one wants to know... For this reason I'm now hesitant to try and get a new bank account with lower rates for overdraft.

And yes, I did get my credit report and all appears fine (or average at least)! Grrrr...

So i feel like I've done what I can for the 'easy' cuts to my debt. Which leaves me with all the hard stuff!

I'm tied into contract with BT and O2 for telephone and broadband but am happy with that as £18.75 per month for an excellent service seems a good deal. (Will be switching to paper free with BT to save about a pound a month- every bit helps, eh?).

My mobile is an excellent deal for £20 (700mins, 1400 texts and unlimited internet) so I won't change that.

My council tax is correct, my water is pretty accurate. I suspect my gas is wrong but my landlord insists on using utility warehouse so won't let me change and I'm hoping it means that I'll be due a rebate when I do leave them (I only have electric in my flat).

My annual travelcard is taken directly out of my wages as a loan from my company which is already saving me about £10 a month.

Finally, my main aim is to pay off my loan (finishes 1st Dec 2010) and my Abbey creditcard this year. I am commited to paying 10% of whatever my 'disposable' income is each month off the card, along with the minimum payments. However, as these payments come down, I'll stick with the amount I'm paying off currently so I'm always paying about £75 off it. Along with various ebaying and paid focus groups and musicmagpie efforts, i feel this will be achievable and will leave me, in 2011, with an extra £300 or so for my other debts.

I know I'm not in the worse ever situation but I feel increasingly disheartened by the knowledge that I won't pay off my debt for 25 years if i keep paying the minimum payments. I have no assets and no hope to ever attaining a mortgage or being able to afford a family in the future.

And yes, I could become a hermit and pay off far more each month but as i live in a studio flat with no TV, this could be more depressing than the prospect of being in debt all my life!! I love entertaining but getting more than 2 people in a studio flat is, erm, optimistic.

I've just been paid after six looooong weeks and have already made the first step by paying off an extra 10% and by working out what I have left, dividing it by 4 and placing 3 weeks worth in a savings account....

Any suggestions where I can make cuts, any advice and, definitely, any support would be most appreciated.


Thanks guys,

Kaz.:o

shell_girl

Hi Kaz,

Well done for getting your SOA up.

It looks a little bit too good to be true- do you actually have £230 left each month? If not- why not?

Some suggestions from me-

Transport costs? Do you drive/ use buses/ trains etc? If so, this needs to be in your budget. ETA sorry just re read and I see that work take it out from your wages. Are there any additional travel costs in that case, or does that cover everything.

Groceries- is it genuinely £50 per month? Or is it £50 on a big shop then £10 here and there to top it up?

Entertainment and socialising?

These were the bits that stuck out to me, hope it helps

DarkConvict

You say you have left some of your outgoings out, i assume your remainder at the end "230.10" is what you spend per month on other things like entertainment, clothes etc.
If this is the case, as you have already said this needs to be cut down. And extra 200 a month would really help you.

I don't know where you live, but £400 a month rent is what i was paying in leatherhead (outer London but main commuter spot) for a flat in a fairly nice area. Can you cut this down?

Pay debts off in highest APR first.

Abbey
HSBC
House of Fraser
HSBC Overdraft
Abbey Loan
Friend

Make minimum payments to all your debts, except the top one Abbey, once that is cleared, move down the list. But do insure that you are allowed pay back early without any early payment charges.

Tixy

Hi Kaz

In my opinion I really can't see much (anything) you can cut back on, you have relatively few expenses and these don't look unreasonable.

A good idea to start the spending diary to find out where else your money is going.

I totally understand you can't never go out and you want to have a social life - however I think it might help if you actually set yourself an entertainment budget because that way it might help you prioritise what 'events'/nights out you choose to go to. If you just think this comes out the excess of £230 then you don't have a point where you stop yourself or say to friends no I can't afford it until payday. Whatever budget you choose (£80? £100?) I personally find that actually setting the budget helps.

Also think about what cheaper nights out you can have. I bet some of the others struggle financially as well so maybe look for going to the cinema with orange wednesdays or to restaurants with 2for1 offers. This can make the money you do spend last longer than just being out drinking. Also as you are in London look out for free events that you can go to.

You say you are disheartened by the debt repayment timescales but remember that things are likely to change in that time - what about your pay for example? are you training/learning on the job? might you get a pay rise soon or the prospect of promotion?

Finally I would look at how else you can increase your income. Can you get overtime? would a second job be feasible? if you and a mate could get bar work one evening a week at the same place it might not feel so much like hard work. Have you looked at mystery shopping (again it can be a form of entertainment if you get to 'mystery shop' restaurants), and have you thought about online earning from completing vouchers /surveys etc? I see you are already ebaying which is good.

Good luck.

Tixy

Also I see your overdraft is quite small but 19.9%, which is therfore costing around £10 per month. I know there are some accounts around now that have a 0% overdraft on the first £500, I wonder if it would be worth looking into that and seeing if you would be eligible and then switching. Only a few quid a month but as you said it all helps!

kaz0705

Hi guys thanks for the responses so far.

Yes, as you guessed, there are somethings I've missed out as my 'extras'...

£50 for shopping is the big main shop and then the intention is just to buy the odd bits of fresh veg, fruit and bread which I suppose could easily add up to a minimum of £20 a month and more likely £40.

My transport is entirely covered by my travel card within zones 1-3 in London- and i only travel further if I go and visit my parents which, I suppose I should have added in as i normally go home once a month- around £40 a time on the train or £20 by coach (usually go for coach!).

So, guess that's £80 that's missing already from it! And then going out.... I guess the real reason I haven't included that is because I honestly haven't a clue how much i spend- too much without a doubt. But i guess until next month I won't have a very clear idea. Probably 'every other penny'!!

I've said to my two best friends that I think we should only have one 'big' night out a month now, which will be about £30 a month, i guess, assuming we stick to it!

Luckily, one of them is in a similar position and the other has just met the love of her life so is often kept occupied so I'm hoping, over all, the nights out should reduce somewhat- and be replaced by late night museum openings and such!

So the £230ish a month is misleading I suppose but I don't really know where it goes at the moment!

I also intend on making ebay my new best friend (not that I have much worth selling!) and have signed up with saros which was recommended through one of the medical trial threads- luckily not just trails but also mystery shopping and focus groups (got an offer on Monday for a 2 hour focus group on ebay for £60 but sadly wasn't picked)....

Thanks for all the comments so far... I might start a daily spend diary on here so you call all jeer (or call my mother to express concern!).

I suppose I feel I'm (now!!) quite saavy and know what i should be doing but feel frustrated at the lack of help from my lenders (not that they're samaritans of course!).

I went to my bank (HSBC) for a loan with a spreadsheet of all my debt and outgoings and how a loan from them would save me £150 a month and make me debt free in 3 years. Even though I have a bank account, savings account and creditcard with them, they refused.

I feel let down because I am struggling but keeping myself above water so I'm not 'bad' enough to warrant help but not 'good' enough to access helpful products like 0% cards.

But, enough of that! I got such a thrill actually paying off a bit extra on my card today that I think I've found my new thrill- better for me than shopping at least!

dancingfairy

Have you got any credit unions in your area? they all have different criteria and you may have to save a few pounds a week with them for a bit but you then might be eligible for a cheaper loan which you could then use to pay off some of the debts and just repay the credit union? It's worth checking them out anyway - depends on their criteria really.
df

psychopathbabble

Not sure if this has already been mentioned, apologies if so, but are you paying council tax over 12 or 10 months? It'll only save you a bit each month, but thats still some extra towards the debts.

Also you could try breaking down your budget into a weekly grocery and weekly entertainment budget. I haven't been suceeding at this recently but I'm going to start again in February, it really helps you to look at what you really need and don't need and where every penny goes. There is a weekly spend thread on here too which might help.


hope this helps and good luck with it x

kaz0705

Hi again!

Dancingfairy: I looked at credit unions but they only offer something along the lines of twice what I have saved with them and as i can't afford to save, it seems a bit redundant!

Closed: I know that I'm getting charged by putting my weekly amounts in a savings account rather than keeping them in my current but, at the moment, its the best way for me to keep some semblance of control over my budget; each week i transfer back my weekly allowance. I know this is a waste of £6 or so a month but it seems necessary whilst i get a grip on my finances.

Psychobabble- I pay over 10 months; i didn't even realise i could pay it over 12! Although am looking forward to my break in March! Luckily I'm a big fan of notes and lists so am almost eager to start my spending diary!

£1.48 so far today....

Thanks everyone- it helps just to actually write it down now. I feel a million times more positive today than I have for a while!

Ames

If you just use the savings account as a 'holding' account and transfer everything over to your normal account when needed, isntead of paying £6 to do it why not get an ISA instead? I've got one and I can move money in and out of it at the click of a button on internet banking. I agree with what you're doing, I did it for a few months to get myself out of the habit of just spending. It meant I had to plan spending in advance, and then could only spend the amount I'd planned.

kaz0705

Closed- Point take and I will look into options;specifically for now, a lower rate overdraft.

Ames- Good idea! I think i'm getting about 0.000001% interest on my savings account so i might as well put it in an easy access isa and earn something on it.

Re: bank accounts. As previously mentioned, I have recently been declined for two loans and have already used my free creditcards prior to this so can't get another (I don't think??). Are bank accounts a bit more 'lax' on ratings? I have recently just set up a seperate bank account with my bank, hsbc, for bills- will this count against me too?

Not expecting specific answers but any general experience would be good!

thanks again!