Can you please help my friends with their debt and to achieve their dreams?

Jo4

A couple who I am friendly with have £52,476 of debt. They want to take out life assurance policies and he is considering becoming a driver instructor in order to get out of the debt and then afford a mortgage on a new home. Obviously this will cost them more money, I think it is about £70 for the life assurance policies that they have looked into and the driving instructor costs £3,500 approximately and takes a year to complete although there is only a 32% pass rate.

INCOME
£2100, after mortgage and rates are paid


MONTHLY OUTGOINGS
£2544.24 after mortgage and rates are paid

Difference £2,100 - £2544.24 = -£444.24 without life assurance policies and him wanting to become a driver instructor.


HOME
Broadband £15
Electric £44
Gas £4.83 (cooker)
Home & Contents Insurance £27.90
Home Phone £33.80 (Average of the last 12 months)
Mobile Phone Bills £67.02 (for both of them, this is the average over the last 6 months)
Oil £75
Oil Burner Service £1.67
Sky £18
TV License £10.96


INSURANCE
Life Insurance/Endownment Policy £108.45 (this only covers the mortgage on death, pays out about £12,000 in Sept 2008)


EATS & DRINKS
Eating Out £10 (Anniversary, Birthdays, Christmas... , his boss always gives them a meal voucher for 2 at Christmas which can be used any time and has no expiry date)
Groceries £160 (includes toiletries, cleaning, stationery, weekly newspaper, car parking)


TRANSPORT & TRAVEL
His Car Insurance £25.83
Her Car Insurance £40.24
His Car Maintenence £8.33 (There was a service cover taken out when the vehicle was bought which covers servicing but does not include some things and lasts for another 3 1/2 years)
Her Car Maintenance £41.67 (Includes servicing, tyres, wipers ...)
His Car Tax £9.17
Her Car Tax £11.25
His Car Wash £9.75 (It has to get an MOT wash regularly because of where he works)
Her Car Wash £4.88
His Diesel £65
Her Diesel £65


DEBT REPAYMENTS
LOANS
Her Car £213.54 (0% to Sept. 2008 inclusive, £5552.04 Outstanding)
His Car £143.12 (5.6% APR to Feb. 2011 inclusive, £7871.61 Outstanding)
NIIB Loan £299.88 (7.8% APR to May 2008 inclusive, £6597.36 Outstanding)
NIIB Loan2 £152.50 (10.8% APR to Feb. 2010 inclusive, £6582.50 Outstanding)
Sainsburys Loan £252.39 (6.35% APR to Dec. 2011 inclusive, £16,405.35 Outstanding)

CREDIT CARDS (Paying £283 monthly)
Citi Card £75 (5.9% lob, £1737.39 Outstanding)
Capital One £34 (5.9% lob, £1108.78 Outstanding)
Her Barclaycard Visa £28 (5.9% lob, £1443.49 Outstanding)
Barclaycard Mastercard £61 (5.9% lob, £2047.24 Outstanding)
His Barclaycard Visa £43 (5.9% lob, £1758.46 Outstanding)
American Express Credit Card £42 (2.9% lob, £1371.78 Outstanding)


SAVINGS
SAVINGS £10 (They have very little money to fall back on, maybe £500)


PET
Food £15
Vets/Jags £2
Worming Tablets £2


FUN & FROLICS
Cinema Trips & Ink Cartridges for computer £15


BIG ONE OFFS
Birthdays/Anniversaries/Mothers Day/Fathers Day £20.83
Holidays/Days Out £104.17
Christmas £41.67
Easter £3


CLOTHES, SHOES, ACCESSORIES
Everyday £41.67
Work £8.33


ODDS & SODS
Chainsaw Engine Oil & Petrol £0.42
Her Hair Cuts £10
His Hair Cuts £6
Spending Money £40 (£5 each a week)
Lawnmower Petrol £1.25
Her Magazine £0.83 (To do with her illness)
His Magazines £19.06 (Partworks)
Membership £0.83 (because he is a member he gets reduced car insurance, which is a lot more than the £10 it costs)

BTW they want to build their dream home in 2008, costing £150,000 at the very most, although it isn't looking good IMHO. They then want to start their family and age and health will be against them as they do not have children and are both over 30.

Can anyone get them back to where they are affording their bills every month and still in the black?

lynzpower

well there are a hell of a lot of outgoings there for a start

I could slice a few off if I were in thier shoes getting rid of
sky
the mobiles onto lowest tarriff & PAYG
not buying newspapers & reading online
50 on clothes a month seems unneccasary
they can bring thier food shop down with some effort to 100 pcm as me & OH do, but there are people spending less than we do on here
do they really NEED 2 cars, theres a hell of a lot of expense there for those?

Jo4

lynzpower wrote:

well there are a hell of a lot of outgoings there for a start

I could slice a few off if I were in thier shoes getting rid of
sky
the mobiles onto lowest tarriff & PAYG
not buying newspapers & reading online
50 on clothes a month seems unneccasary
they can bring thier food shop down with some effort to 100 pcm as me & OH do, but there are people spending less than we do on here
do they really NEED 2 cars, theres a hell of a lot of expense there for those?

THANKS for the response, I will let them know what has been said!

The mobiles have been reduced from over £360 because as he has to travel a lot for his work he keeps crossing networks from Northern Ireland to the Republic of Ireland.
The 1 newspaper they buy is a weekly, is not available on line and only costs 80p a week.
The £50 includes outfits for weddings, although this could possibly be reduced.
They have brought their food shop down from over £100 a week as they are both on special diets.
They need 2 cars as he travels a lot and she needs her car as they live in the countryside and no one is even going the same direction as her, there is no bus or train service.

spud30

£15 per month just on washing cars....can they not get a bucket and sponge for £2 and do it themselves

Jo4

spud30 wrote:

£15 per month just on washing cars....can they not get a bucket and sponge for £2 and do it themselves

That is what I thought, but he reckons a car wash does it better! I know what I would rather do!!

mummytofour

I can see the point of the cars BUT they should IMHO get rid and buy cheaper ones, it is easy to pick up a car for £500 or less, that would save them £350 ish pcm, they might even get cheaper car insurance too that would
save them even more!

kaz250

Sorry but i cant resist noting you seem to know a lot about this couple considering they are your friends.. the sky and the broadband can be possibly matched into one single account as sky i believe are now offering free broadband. saving them about £180 over 12 months

Jo4

kaz250 wrote:

Sorry but i cant resist noting you seem to know a lot about this couple considering they are your friends

I know a lot about this couple because they are my friends. They asked for my help and I done Martins spreadsheet with them. I suggested posting their situation on the boards and they said they felt uncomfortable with it but if it might help them then it would be worth it.

Do you think I should not try to help them?

Jo4

kaz250 wrote:

Sorry but i cant resist noting you seem to know a lot about this couple considering they are your friends.. the sky and the broadband can be possibly matched into one single account as sky i believe are now offering free broadband. saving them about £180 over 12 months

Should have pointed out that if you look at my signature you wil see that I have helped 4 friends get out of their debt as well as myself!

They cannot get Sky broadband in their area!

CLAPTON

first of all congradulations on a very detailed SoA.

questions

how much will a driving instructor make and how much does he make now?

wihin their current jobs (presumably both work) can they increase their income i.e. overtime, parttime evening or weekend work?..lets face it they need another £500 a month.

what is the value of their house and how much is the mortgage?

kaz250

Should have pointed out that if you look at my signature you wil see that I have helped 4 friends get out of their debt as well as myself!

Well done and keep up the Good work... My observation stems from the fact that i will feel very uncomfortable sharing such information with a friend.
Wish u every success