on the right path?

CEK

Hey there everyone

Well, I finally got round to registering on here and posting for the first time. I'm a definite DFW and have already taken some steps towards it but I thought I would come on here and see if any of you MSE's have any more advice for me. Here's my SOA with comments/explanations, I know alot of you won;t agree with some of the things I'm doing which is why I'm putting comments in (don;t worry I haven't sold a kidney or anything!!)

I've just done mine as mine and OH salaries are paid into our own accounts and we transfer into joint for joint spends.

Incomings
Monthly salary £1477 (pension £100 and student loan £90 automatically taken out of this before I even get my grubby mitts on it!) Pension is really good company scheme so would be foolish not to take advantage, also, am 28 (therefore grownup) so should defo be paying into pension no?

Outgoings per month
Rent £347.50
Council Tax £75.00
Water £10.00
Gas £37.50 (stupid british gas not reading meters meant that we ended up with a £400 bill for last winter which we're currently paying along with the monthly amount totalling £75 between me and OH, I know british gas are evil personified but we can't afford to pay off the whole thing in one go. our house is rented so we can't improve the insulation etc)
Electricity £15.00
Landline £25.00 (this is the amount me and OH pay into the joint a/c each month to cover 1/4ly bills, works out about right each 1/4)
Household £150.00 (all eats and spends when out with OH)
Bed payment £35.00 bought a new bed (soooooo comfy!) 0% for 2 years and will be paid off in that time
Petrol £80.00 (already car share with OH and work 25 miles away so biking not really an option!)
Veg box £25.00
Meat box £45
Egg card £25 (more on this below)
Barclaycard £25 (ditto)
Loan £325 (and ditto again)
Mobile £25 (just switched to a new provider so this should be the same each month with my new plan)
Car works out about £30 per month not inc petrol, £120 tax, £130 insurance and v cheap to run as OH is very handy!

OK (deep breath) debts

£948 on Barclaycard at 7% (i think, just did rate transfer thingy for life of balance)
£1030 on Egg at a whopping 15.9% (I think), need to check when anniversary is but don't think its close.
£3386 owed to OH who helped me out after christmas when I had loads on credit cards (2 above and another one which has gone now)
£3000 owed to my mum who helped me out when i moved down south from the cheap north and started working in London at great personal expense! I'm not paying her anything at the moment - she's like an angel!
£??? on student loan (think maybe about 8 or 9K) but comes out of salary

OK, you might be thinking, why am I paying OH back when i should be throwing money at evil credit cards,
well reason number 1 i actually like him and would like to still be in a relationship with him at the end of all this! and
2 he lent me the money out of the house deposit fund which we are intending to use in April (first time buyers - woo hoo) The fund is practically all his money which he has cannily stashed away over the years, he is vg with money (if a little tight!) but there's no way I'm handing over my cards to him.

Now, I know that most mortgage lenders will make me put the cc balance onto a mortgage anyway so my question is this - is it better to carry on paying OH to have bigger deposit OR throw all money at cc's so as not to have them added on?

I've done a budget and i'm currently living on about £60 a month for all my own spends, all spare cash going to debts. I'm definietly a reformed character when it comes to buying stuff, my most recent "extravagence" was a £7 haircut by being a model.

Savings - i know what you're gonna say - why are you saving when you should be throwing the money at your debts!! well (hangs head in shame), the savings are for
1. midweek break in dublin in august (all done on the cheap i might add)
2. family wedding in october (done on the v cheap)
3. family party in edinburgh in september (done on the mostly cheap!)

anyway, now that you've read through this mammoth essay feel free to tear it all apart.... i mean give me some advice

cek

linniestorm

Welcome CEK!!!

In terms of your decision on where to direct the money I understand where you are coming from in terms of paying off your OH!

But could you perhaps make an agreement with him short term about reducing your payments to him and increasing them to the cards? I'm not sure that lenders would make you move your unsecured debt onto your house when you get it, but they will factor it in (alongside the deposit obv) when deciding how much to lend you, so the more you can get it down the better I reckon, and of course you're saving money on interest!

In terms of your SOA the only thing I noticed that you could perhaps reduce is the landline. I'm assuming your OH has a mobile as well, and you'll have free minutes etc. so does it need to be as high? Does it include internet or something, maybe look at reducing your package?

frugglewump

CEK wrote:

Now, I know that most mortgage lenders will make me put the cc balance onto a mortgage anyway

Errr - when I took out my mortgage in february I had debts of £11,000 on 1 loan & 2 credit cards. My OH had a loan of £2k and £1k on credit cards. At no time were we told to put this on the mortgage by any of the quotes.

As far as the repayments go - try the website below to show just how quickly the cards would be paid off if you moved you payments to OH onto them:

http://www.whatsthecost.com/snowball.aspx

Also, did you ask barclaycard if they would increase you limit to allow you to move the egg debt over to them at 6.9% lob. I found when saying that i wanted the increase so i could cancel my other card they were more helpful

CLAPTON

well done on posting the SoA
you may wish to consider re-organising your SoA so you can see the wood for the trees

at the moment its not easy to see the basics
a. how much do you spend each month excluding debt payments .....good to group these all together and have a total so you can see where you are
and
b ..how much are your minimum debt repayments? again group all the debt payments together and have a total

then you can see whether you have a surplus to snowball your debts.

on the detail:
are all figures half the total bill? i.e. you actually pay £ 73 per month on Gas? this is very large....i would suggest that you read the meter yourselves on a regular basis so you get no surprises...but also cut down on your usage....change the timeclock so the heating and hot water is on for a shorter time ...as a start try reducing by a hour in the morning and an hour at night...if you're still ok then reduce further.

landline of 50 (2x25) per month is very high...just pay for BT landline and use companies like https://www.call1899.com or https://www.call18185.co.uk or similar for your actual calls....they charge 3p per call so you can talk for an hour for only 3 p

i dont understand household at 300? is this for eating out or what..it looks huge.

again in petrol 80 or 160 per month?

what are veg/meat/boxes and is this your share and OH pay the same again?
so what do you spend in total for food/groceries/cleaning products i.e. the things usually bought in a supermarket and excluding eating out/takeways etc?

again is the car costs just your share so is OH paying the same again?

CLAPTON

part 2 ...i pressed reply too soon.

i think you should contribute to the pension if the company is also paying money in.

obviously the 'wrong' financial thing to pay OH back rather than interest bearing debt but if thats what you have agreed with OH then so be it.

you should add the saving for holidays to the budget so you can see where you are ...also there is nothing in the budget for clothes, presents,takeaways

CEK

All,

thanks for your replies, its home time now (yipee) but will post more tomorrow!

CEK

Hi there

Thanks for the replies, it was reassuring to hear that cc balances aren't included on mortgages. I have aways been led to belive that they were. does anyone know whether student loans are either or is it just that they check how much you can repay?

OK, wood and trees

Outgoings to debt each month
£325 to OH
£25 to Egg
£25 to Barclaycard
£35 repayment for new bed

Total £405

Outgoings for household each month
£347.50 rent
£75 council tax
£10 water
£37.50 gas
£15 electricity
£25 landline
£25 veg box
£47 meat box
£150 for all other household groceries, "dry goods" and eating out
Petrol £80

Total £812

Outgoings to savings each month

£100

Total £100

So, total outgoings each month is £1317

Leaving a "disposable" income of £160. This has to cover any car repairs that need doing and insurance, tax and MOT stuff, mobile phone bills, all my own spends (haircuts, clothes, going out by myself) (i.e. not with OH not totally by myself, that would be rubbish! ) plus any other stuff that comes up e.g. tenancy extension fees from money grabbing agents (grrrr)

Current plans money saving plans
1. Reduce landline costs - any recommendations? (i know someone mentioned something above, will check that out)
2. Already do mostly budgeted shopping/shopping to menus but will try and improve
3. Try and fine new bank account that doesn;t charge monthly fee (currently paying £5 a month but does provide phone insurance), only problem is overdraft of £500 which gets used every month, currently no spare money to pay off.
4. any other suggestions?

Cheers
cek

chivers1977

Right if OH would agree, if you were to pay the £325 to your cc debts, you would clear them in a matter of months ie about 4, you can use the calculator thingy. Then resume payments to OH, he would still have received back nearly £1900 by the time you want to move house. Fine, the mortgage will be a bit higher as deposit a bit lower, then once you have it, make a further 4 payments of £325 direct to the mortgage to reduce if flexible enough. This should then leave you back in the position that you should be, CC repaid, OH repaid and mortgage balance at the right level. then lovely mum can have the benefit of your £325 and she will be repaid within a year:j

I would say that spending £45/90 per month on meat is expensive. I realise that this is probably organic but still, that it is a lot of money. spend some time on the OS boards and find ways to reduce your meat consumption. Lots of people on here buy organic when it has been yellow stickered in tesco or whoopsied as we call it at Asda.

Alliance and Leicester are offering O% ODs with cashback through them and Quidco. Might be worth trying.

Also what about 0% credit cards??

CLAPTON

looks a lot clearer now.
first basic is still to undertsand exactly where the money goes.
so seperate out 'groceries and dry goods' from eating out..one is essential and the other optional

so for supermarket type things including meat and veg between two of you, you're spending something like 440 per month (although this includes eating out....this is very very high and you should be able to cut this big time....

you have a disposable income of 160 which pays for a whole lot of things...break them all down....how do you know it pays for them....if it did you wouldn't be in the overdraft very month.

sorry to preach but its absolutely essential to break your spends down so you can clearly see where the money is going. then you need to monitor the spends against the budget to see whether or not you are meeting the budget...if your not meeting it you need to decide what to reduce. if you lump things together its impossible to see where the overspend is going. eg maybe your mobile bill is high ..its impossible to tell if you lump it all together

so at the every least you need seperate lines for
eating out/going out
car related expenses insurance /tax/mot/aa/ servicing/petrol all seperately
groceries
mobile phone bill
holidays (estimate for the next 12 months and divide total by 12 to get a monthly amount)
haircuts
clothes
girly nights out
any work lunches/coffees/magazines etc.
any presents or xmas expenses?

start the spending diary.
monitor the spending and compare with the budgeted amount.

sophiesmum_2

surely if you are using your £500 overdraft each month you don't actually have a surplus of £160 but a defecit of £340 a month.

I am only new at this but I would agree with the posters above. I would chuck the money at the high interest cards, leave the savings until you are debt free, and pay OH and lovely mum back after the credit cards. If you are considering taking on a mortgage you need to get rid of as many debts as possible first. Snowballing as mentioned by the OP is a great way of doing this.
Lots of more informed people will probably be able to advise you better than me.
good luck with reducing your debts
Sophiesmum

tyllwyd

CEK wrote:

Outgoings for household each month
£347.50 rent
£75 council tax
£10 water
£37.50 gas
£15 electricity
£25 landline
£25 veg box
£47 meat box
£150 for all other household groceries, "dry goods" and eating out
Petrol £80

Total £812

I'm still confused - these are the household outgoings, but are they joint amounts, or just what you spend? From your posts above, I think they might be just your contribution, in which case you are spending an huge amount on food for one person. And a lot on your telephone, as well.