Things are starting to get out of control again

Mr_Mag0o

Hi,

I started out on this journey of becoming debt free about 4 months ago, after realising that the money I was earning wouldn't cover my expenses for the month, and each month I was borrowing more and more on my credit cards, just to pay off my debts.

I went to see the CAB and we came to some agreements with my credit card companies, which, I realise will affect my credit records but I really didn't have a choice, as my shortfall at the time was around £400 a month.

I had a total of 3 credit cards, and a loan and overdraft at the HSBC bank. I was advised to open a new bank account, to keep my new finances out of the hands of the HSBC, so we could agree minimum repayments with them, and so I opened an account at the Co-Op and another at the Alliance & Leicester.

Up until Christmas time, I was managing OK, but then the little splurge of spending that bit extra took me overdrawn at the A&L bank, and the charges they have now placed on my account mean that I am back on the downward spiral of having to borrow money each month in order to pay my debts. From the 4th Jan - 11th Feb I had a total of £235 in bank charges, plus ongoing charges for being over my agreed overdraft.

The advice I have been given so far, is to keep paying the minimum repayments on the credit cards, as these are below the 0.8% (if I recall correctly) figure, then the credit card companies will eventually offer a settlement figure, normally in the region of 25-50% of the final amount owed. At this point, I may be able to turn to my family for help (as borrowing 15k from my inheritance may be feasible, whereas the 31k I owe to the credit cards is not). I would then be left with the HSBC loan and overdraft, which I could pay off a lot quicker once the other debts are removed.

Can anyone see anywhere where I can make savings below? I work from home mostly, so my electricity and gas are pretty high (can I get relief on tax for working from home?)

I know I'm being an idiot trying to keep the full extent from people (who'd want to go out with someone with so much debt), so my lifestyle isn't as completely cut back as it could be as I try to live some pretence that I'm coping, but I tend to go out very little, and can't remember the last time I brought clothes.

Any advice would be greatly appreciated, I don't want to let the Alliance & Leicester push me over the edge. I've explained to them my financial situation, and asked for the bank charges to be removed from my account, but they keep quoting the stupid decision that the courts agreed they were fair, so I am now going through the MSE advice on how to appeal, but this could take months, and if at the end I don't win, I'm likely to be another few thousand in the red and facing bankruptcy.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1903
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1903

Monthly Expense Details
Mortgage................................ 774
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 99
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 14
Telephone (land line)................... 10
Mobile phone............................ 42
TV Licence.............................. 12
Satellite/Cable TV...................... 48
Internet Services....................... 10
Groceries etc. ......................... 270
Clothing................................ 50
Petrol/diesel........................... 130
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 38
Pet insurance/vet bills................. 10
Buildings insurance..................... 13
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 15
Emergency fund.......................... 0
Total monthly expenses.................. 1747


Assets
Cash.................................... 0
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 130000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 117078...(774)......4.19
Total secured & HP debts...... 117078....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................19725.....118.......0
M&S............................3580......22........0
Tesco..........................5319......30........0
A&L O/D........................400.......0.........0
HSBC Loan......................3498......21........0
HSBC O/D.......................2000......12........0
Total unsecured debts..........34522.....203.......-


Monthly Budget Summary
Total monthly income.................... 1,903
Expenses (including HP & secured debts). 1,747
Available for debt repayments........... 156
Monthly UNsecured debt repayments....... 203
Amount short for making debt repayments. -47

Personal Balance Sheet Summary
Total assets (things you own)........... 130,000
Total HP & Secured debt................. -117,078
Total Unsecured debt.................... -34,522
Net Assets.............................. -21,600

Created using the SOA calculator at (no links allowed)
Reproduced on Moneysavingexpert with permission, using Firefox browser.

savingmummy

Mr_Mag0o wrote: »

Hi,

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1903
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1903

Monthly Expense Details
Mortgage................................ 774
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 99 is this over 10 or 12 months?
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 14
Telephone (land line)................... 10
Mobile phone............................ 42 can you haggle for cheaper?
TV Licence.............................. 12
Satellite/Cable TV...................... 48 CANCEL THIS! or reduce package to min
Internet Services....................... 10
Groceries etc. ......................... 270 :eek:Halve this, i spend 150 for 4!!
Clothing................................ 50 STOP! use what you have
Petrol/diesel........................... 130 can you cut this down?
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 30 what is this?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 38 this seems high is it due to prescriptions?
Pet insurance/vet bills................. 10
Buildings insurance..................... 13
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 cut down
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 15 is this booked?
Emergency fund.......................... 0
Total monthly expenses.................. 1747


Assets
Cash.................................... 0
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 130000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 117078...(774)......4.19
Total secured & HP debts...... 117078....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................19725.....118.......0
M&S............................3580......22........0
Tesco..........................5319......30........0
A&L O/D........................400.......0.........0
HSBC Loan......................3498......21........0
HSBC O/D.......................2000......12........0
Total unsecured debts..........34522.....203.......-


Monthly Budget Summary
Total monthly income.................... 1,903
Expenses (including HP & secured debts). 1,747
Available for debt repayments........... 156
Monthly UNsecured debt repayments....... 203
Amount short for making debt repayments. -47

Personal Balance Sheet Summary
Total assets (things you own)........... 130,000
Total HP & Secured debt................. -117,078
Total Unsecured debt.................... -34,522
Net Assets.............................. -21,600

Created using the SOA calculator at (no links allowed)
Reproduced on Moneysavingexpert with permission, using Firefox browser.

I have added my comments in red.
Sorry you are back in a bit of trouble again you were doing so well too!
What was it you were spending on to cause overdraft?

Two9A

Morning. I'm not one of the old hands here, but I'll see if I can point a few things out.

Total monthly income.................... 1903

Monthly Expense Details
Mortgage................................ 774 // See if you can't get this renegotiated at some point
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 99
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 14
Telephone (land line)................... 10
Mobile phone............................ 42 // Seems a tad high. If it's contract, see if you can get the deal knocked down / cancelled without a termination fee
TV Licence.............................. 12
Satellite/Cable TV...................... 48 // Come now, do you need that?
Internet Services....................... 10
Groceries etc. ......................... 270 // Definitely high for one person. There are various ideas over in the OldStyle board for saving on that (buying own-brand, different supermarkets, fresh fruit from the market, etc)
Clothing................................ 50 // Every month? I've bought about that in the last year
Petrol/diesel........................... 130
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 38
Pet insurance/vet bills................. 10
Buildings insurance..................... 13
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 15 // For what it's worth, I haven't had a holiday in three years
Emergency fund.......................... 0
Total monthly expenses.................. 1747


Assets
Cash.................................... 0
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 130000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 117078...(774)......4.19
Total secured & HP debts...... 117078....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................19725.....118.......0
M&S............................3580......22........0
Tesco..........................5319......30........0
A&L O/D........................400.......0.........0
HSBC Loan......................3498......21........0
HSBC O/D.......................2000......12........0
Total unsecured debts..........34522.....203.......-
Well done on getting all those cards at 0% though; I'm in the inenviable position of having a card that's about to expire, and nowhere to punt the balance to.

Hang around, there'll be more people poking at your SOA soon.

tallyhoh

I believe you can get tax relief on certain things when working from home. How do you pay your tax now, do you have an accountant? they should advise you. If not check out the regs online.

You dont seem to have any costs for the car, have I missed them?

Mr_Mag0o

Hi,

Thanks for looking at it so far. To answer the points raised:

Mortgage................................ 774 I'm currently tied into this deal but it should be dropping by around £100 in 6 months.

Mobile phone............................ 42 Like an idiot I lost my mobile phone, it cost me £160 for a new one and I also had to take out the insurance at £6 a month. I'll try to renegotiate to see if I can get the basic package cheaper.

Satellite/Cable TV...................... 48 I'll drop this to the base package

Groceries etc. ......................... 270 Every time I go to the supermarket it seems to cost me a fortune, I'll investigate the bulk cooking and freezing, as I currently cook for one and it's expensive each time. Plus, will buy the cheaper options from now on, and cut out the alcohol.

Clothing................................ 50 I don't generally use this for clothing, it's there if I need it, but I generally use it for a night out.

Holiday................................. 15 This is part of my pretence to be doing OK, although the holiday I do go on tend to cost a lot more than this, so I doubt I'll get one this year.

Council tax............................. 99 This is over 10 months, so I do get a nice break in Feb/March

Petrol/diesel........................... 130 This is tough to break down, as it's to visit my elderly parent, maybe save £30 a month if I cut down the visits.

Other travel............................ 30 I occasionally have to use trains/buses to get around.

Medical (prescriptions, dentist etc).... 38 £28 for prescription contact lenses, and £10 a month for dental fees or prescriptions.

Presents (birthday, christmas etc)...... 20 Will try, this is the one area where I do fail, being overgenerous with money I can't afford.

I'll investigate the tax relief option, as I do think I should be paying around £30 each per month, instead of the £60 I currently pay.

On the car, it's a company car so thankfully I don't have to worry about tax/insurance/repairs etc.

JODEUK

Have you tried daysoftlenses for your contact lenses ? Great comfortable contact lenses excellent customer service and only £9.98 per month including delivery. As a new user I can't post the website address but just add the www. and the .com

Mr_Mag0o

Will give them a try, thanks, as I realise my lenses are costing me far more than the costs of the lenses alone.

Just swapped energy supplier using uswitch, and saved myself another £360 a year.

Horace

When you go shopping make a list of what you need and stick to it..I know what some folks are like they just grab whatever off the shelves without thinking of the consequences and 9 times out of 10 that food goes to waste. Always wander past the out of date shelf in the supermarket too as you might pick up a few bits there - great for freezing and using later.

bargainbetty

Scrap the phone insurance - you don't 'have' to have it, no contract can force you to do that. If you lose this phone, just think about replacing it with a cheaper handset. You can get a phone for £20.

I spend £270 per month for two people, including at least one steak dinner. You can drastically cut this down, without it hurting too much!

With regard to your social life and presents, maybe you could consider inviting friends over rather than going out. Cook them a meal, have them bring the wine, bake a cake for their birthday etc. Maybe even tell your closest friends what is going on - you'd be amazed how many people will say they need to save money too, so how about pooling resources etc.

Use 2 for 1 deals when you do go out - it will save hugely on waste for you and your friends.

With those reductions in outgoings, you should cover all the repayments, and maybe you could start throwing all extra pennies at the highest % card.

Good luck x

kerri_gt

Hi there, although I don't post all that much on here, I can relate totally to what you are feeling/thinking.

Firstly, you need to stop kidding yourself that your finances are ok - then you can make steps to actually doing something about them. That way it all seems less scary and you can tackle everything with a clear head

I can only echo what most of the others have said on here but here are my thoughts about some of the areas you could cut;

Mobile phone............................ 42 Like an idiot I lost my mobile phone, it cost me £160 for a new one and I also had to take out the insurance at £6 a month. I'll try to renegotiate to see if I can get the basic package cheaper. Cancel this insurance, you don't need it. Also check for other deals if you aren't tied to one at the moment - companies offer good value Sim Only contracts (you can keep your same number still) and you are only tied 30days at a time. I think they work better than Pay as you go as you still get the benefit of free calls etc. I had 350mins and Ultd text with t-mobile for £15 a month.

Satellite/Cable TV...................... 48 I'll drop this to the base package. Do you really need a pacakage at all if you are serious about sorting your finances? How about Freeview and then you can think about Satellite/Cable when your finances are in better shape.

Groceries etc. ......................... 270 Every time I go to the supermarket it seems to cost me a fortune, I'll investigate the bulk cooking and freezing, as I currently cook for one and it's expensive each time. Plus, will buy the cheaper options from now on, and cut out the alcohol. This month I've spent £170 on two of us. I buy fruit and veg at the market mostly, look out for good BOGOF deals but only on things I am going to use, make sure I try and plan my meal and have started things like roasting a chicken then using the left overs for subsequent meals. Try dropping down a brand level too (more advise on this can be found on this site)You don't have to eat basic or value everything, I only buy free range corn fed chicken because I care about animal welfare, so make cuts on other products I buy (trust me, Smart Price spaghetti tastes just like Heinz!)

Clothing................................ 50 I don't generally use this for clothing, it's there if I need it, but I generally use it for a night out. Why not have a night in with friends, you could cook and they could bring round drinks instead of always going out - bet this would work out cheaper and you don't have to spend ages queueing for a taxi at the end of the night

Holiday................................. 15 This is part of my pretence to be doing OK, although the holiday I do go on tend to cost a lot more than this, so I doubt I'll get one this year. Stop pretending it is ok - and put this amount towards clearing your debt and saving up, then you can enjoy a holiday when you are debt free

Presents (birthday, christmas etc)...... 20 Will try, this is the one area where I do fail, being overgenerous with money I can't afford. Why not give 'time vouchers' as gifts - where you offer your time to do something for someone insead of forking out on expensive gifts?

Tackle the most costly debt first then work on the rest, once you start to make inital in roads and little changes you'll really notice the difference.

Oh, and yes, you should be able to get addtional tax relief for working at home, I don't think it's just heat and water you can make claims on too either -who does your tax returns at the moment?

Mr_Mag0o

Thanks, will scrap the phone insurance, and glue this one to my hand so that I don't lose it again.

I don't have to do a tax return at the moment, as my employer does it all for me, I just get the basic P11D and P60 etc telling me my new tax code every year. I'll investiaget all the benefits I can claim for over the weekend, as it always seemed a con that my employer could tell me to work from home, saving them office fees but costing me a fortune in household bills.

I'm going to start going to the supermarket every day now (I live walking distance from one), as the main problem I had with food was that I threw a lot away. This means I should be able to get a lot more of the BOGOF deals, and the out of date stock.

I've now scrapped the Sky package, so that's quite a saving.

On the credit cards, the CAB advised me not to pay anything other than the minimum payments that I have agreed, the interest has been cut to 0 percent on all of the cards as I'm on a repayment plan after declaring financial hardship. The CAB told me that if I pay off more than the agreed amount, then the likelihood of getting through an early settlement figure would drop, as they'd be happy taking my money for the rest of my life (It would have taken me 55 years to pay off my MBNA card at the rate the interest was accumulating). We are hoping that in the next 4 months they'll send me through a debt write off figure, which while leaving me on the credit blacklist, will at least enable me to get back on with my life debt free.

I'll try for more nights in, I have some brilliant friends who know my situation, and they always cook for me when the going gets really tough.