SOA from a newbie - not sure I've done it right? Please help!

fraja

Thank you in advance for helping go through this with me - I have lurked on and off on here and am impressed by the level of detailed knowledge on here and the time it must take to help people!

The options I can see for me are:

1. consolidate the debts (which, including overdrafts of £1k for me and £200 for my husband, work out to £14,500) into a single loan, extend the term so that the payment remains around £300, keep paying it until the end of the term.

2. do the above, but when our mortgage is up for renewal in April 2012, add whatever the outstanding balance is to the mortgage.

HSBC rang me and offered me 9.9% to consolidate the lot, keep the repayment the same and extend the term. I'm currently paying a combination of rates, but the loan is on 6.9% and has a bonus of about £700 payable on completion if I keep paying it for the full term of the loan (have paid 37 payments, 23 to go).

Anyway, this is my SOA. Please let me know if it looks mental anywhere! They are joint amounts for things like eg mobile phone.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1950
Partners monthly income after tax....... 1594
Benefits................................ 133
Other income............................ 0
Total monthly income.................... 3677

Monthly Expense Details
Mortgage................................ 1533
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 206
Electricity............................. 70
Gas..................................... 74
Oil..................................... 0
Water rates............................. 36
Telephone (land line)................... 12
Mobile phone............................ 50
TV Licence.............................. 10.14
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 500
Clothing................................ 50
Petrol/diesel........................... 200
Road tax................................ 12
Car Insurance........................... 35
Car maintenance (including MOT)......... 40
Car parking............................. 0
Other travel............................ 80
Childcare/nursery....................... 0
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 23.42
Contents insurance...................... 23.41
Life assurance ......................... 21.9
Other insurance......................... 94.4
Presents (birthday, christmas etc)...... 50
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 30
Emergency fund.......................... 0
Total monthly expenses.................. 3226.27


Assets
Cash.................................... 500
House value (Gross)..................... 365000
Shares and bonds........................ 500
Car(s).................................. 2000
Other assets............................ 5000
Total Assets............................ 373000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 218909...(1533).....5.48
Total secured & HP debts...... 218909....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC card......................5000......100.......15.9
Ulster card....................1388......42........15.75
HSBC loan......................6775......295.......6.9
Total unsecured debts..........13163.....437.......-


Monthly Budget Summary
Total monthly income.................... 3,677
Expenses (including HP & secured debts). 3,226.27
Available for debt repayments........... 450.73
Monthly UNsecured debt repayments....... 437
Amount left after debt repayments....... 13.73

Personal Balance Sheet Summary
Total assets (things you own)........... 373,000
Total HP & Secured debt................. -218,909
Total Unsecured debt.................... -13,163
Net Assets.............................. 140,928

Created using the SOA calculator at makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

Tixy

Hi fraja and welcome

Well done for posting your SoA. The way it looks at the moment is that you are just managing the minimum payments. That said at minimums only it is going to take you quite a long time to get out of debt. I'll look through your SoA with the assumption you want to try to cut back to pay more if possible -of course these are just suggestions, only you know which will work for you.

fraja wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1950
Partners monthly income after tax....... 1594
Benefits................................ 133
Other income............................ 0
Total monthly income.................... 3677

Monthly Expense Details
Mortgage................................ 1533
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 206
Electricity............................. 70 this looks quite high (although I guess maybe you have quite a large house?) have you checked you are with the cheapest supplier recently for elec & gas - and the best tariff from that supplier. Have you tried to reduce your usage at all?
Gas..................................... 74
Oil..................................... 0
Water rates............................. 36
Telephone (land line)................... 12
Mobile phone............................ 50
TV Licence.............................. 10.14
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 500 you could reduce this considerably if you wanted. There are people who feed a family your size for less than £200 per month, Maybe you could aim to cut to £400 next month and see if you could get to £300 the next month as a starting point. Have you tried meal planning for the whole week before you shop? tried the drop a brand challenge? is there anything 'extra' in this amount such as cigarettes or a lot of alcohol that is bumping the cost up?
Clothing................................ 50
Petrol/diesel........................... 200 is this all essential mileage? do your drive fuel efficently?
Road tax................................ 12
Car Insurance........................... 35 have you checked the comparison sites to see if this is competative?
Car maintenance (including MOT)......... 40
Car parking............................. 0
Other travel............................ 80
Childcare/nursery....................... 0
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 23.42 B&C is probably not too bad considering your house value but do check the comparison sites to see if you can get cheaper.
Contents insurance...................... 23.41
Life assurance ......................... 21.9
Other insurance......................... 94.4 this looks high, what is covered? have you checked the deals are the best and it covers what you expect/need?
Presents (birthday, christmas etc)...... 50
Haircuts................................ 15
Entertainment........................... 0 do you never spend anything here on you or the children? days out or meals out? cinema, takeaways etc? books, music, magazines etc?
Holiday................................. 30
Emergency fund.......................... 0
Total monthly expenses.................. 3226.27


Assets
Cash.................................... 500
House value (Gross)..................... 365000
Shares and bonds........................ 500
Car(s).................................. 2000
Other assets............................ 5000 what are these?
Total Assets............................ 373000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 218909...(1533).....5.48 is this fixed at the moment?
Total secured & HP debts...... 218909....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC card......................5000......100.......15.9
Ulster card....................1388......42........15.75
HSBC loan......................6775......295.......6.9
Total unsecured debts..........13163.....437.......-


Monthly Budget Summary
Total monthly income.................... 3,677
Expenses (including HP & secured debts). 3,226.27
Available for debt repayments........... 450.73
Monthly UNsecured debt repayments....... 437
Amount left after debt repayments....... 13.73

Personal Balance Sheet Summary
Total assets (things you own)........... 373,000
Total HP & Secured debt................. -218,909
Total Unsecured debt.................... -13,163
Net Assets.............................. 140,928

Created using the SOA calculator at makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

Right looking at the options you have mentioned. Personally even though you have equity in your house I would not consider turning unsecured debt into debt secured on your mortgage. How long will you have left on your mortgage in 2012? if you pay off £14.5k over the same term even at a low interest rate it is likely to cost a lot (not to mention the extra risk to the security of owning your own home).

Your loan at 6.9% is a pretty good deal, if I'm honest I would leave that as it is.

You talk about putting the cards in with the loan and still only paying £300 per month (thereby reducing your debt repayments by £140 each month). I would be looking to increase your debt repayments to get you out of debt quicker, not to be doing a deal where you'll be in debt for longer.

Have you stopped spending on the credit cards? I would do so immediately and then perhaps you could both look to see if you would be eligible for 0% credit card deals with new providers (depending on your credit ratings). If you could switch most of your card debt to 0% and then up your repayments by £200 per month (primarily from the grocery budget) then you could make some serious inroads into your debts.

Good luck.

t4mof

Before you launch into consolidating, take a look at this:

http://www.whatsthecost.com/snowball.aspx?country=uk

Put your debts in and how much you can afford to pay each month (once you have cut down your expenditure by following the above suggestions). It'll show you how long it will take to pay off the debt and how much interest that will cost you.

It will then show you how much interest it will cost to consolidate - you'll see that the best way to pay off the debt is to cut your current expenditure where you can and then pay the extra towards the loans and credit cards.

Just to add to the comments on your SOA, can you change your mortgage to interest only for a year or 2 while you clear your debts?? You can make up lost ground by then throwing the extra money you have per month once the loans and cards have gone back at the mortgage. Might be a short term solution to freeing up more cash.

Good luck!

fraja

Thank you very much indeed for your reply.

The gas and electricity is £144 for both, so I split them for the SOA. I turn lights, etc off all the time and we have used less electricity this year than last for the same period (EON do a comparison thingy), but more gas (colder winter, so heating has been on more). We had been accruing a debt with them, because we were only paying £85 for both, which was way too low - but now we have paid it off. On our last but one bill, we were £74 in credit, then, on the last one we were £24 in credit. I'm going to wait and see what we are on the next one and see about reducing our payment a tiny bit.

Groceries - I included toiletries, household stuff like cling film, toilet roll, etc in that, not just food. We both take lunch to work a fair bit, so that bumps it up a bit, though with more careful meal planning, I know I can get that down.

The petrol was a best guess - we seem to fill up once a week, though in the summer, it's easier to walk places. It has got SO expensive now - the car is by no means an extravagant or petrol guzzly one, but it's £50 to fill it up each time. Perhaps it's more like £150 a month. I'll have to note our mileage and expenditure more carefully. I do drive fuel efficiently - watching the rev count and don't change speed rapidly where possible!

We've just had the quote through for this year's B&C insurance - was going to look at the cashback deals through topcashback, etc. Ditto the car insurance, but we did that not that long ago and it's pretty good.

The other insurance is mortgage payment protection insurance, with redundancy protection on it.

Yes, I do spend on books, days out, etc - but not very much. We use eg Tesco vouchers/Nectar points often. But yes, I should probably have put something in there.

The other assets - stuff we could sell if we absolutely had to, but would prefer not to for reasons of sentiment, usefulness, etc (engagement ring, wedding ring, computer, TV, furniture, etc). Not sure if that's what's meant to go there though.

The mortgage rate is fixed until May 2012, because rates were going up when we bought and we borrowed as much as we could (and then some), so wanted to fix it to ensure we weren't stung by a rise in rate before we'd eg had pay rises to cover it.

Yes, we have stopped spending on the credit cards and were looking at the snowball and balance transfer things as well this evening (thank you, t4mof!). If I can get the £5k onto a 0% one, that will help.

HSBC ringing me tomorrow evening to see if I want their 9.9% deal - I will say no, for sure! And you are right that putting more into the debt now makes a lot more sense than making paying it back over a longer time.

Not sure if I can change it to an interest free mortgage. We're on a five-year fixed rate, with a redemption penalty, so maybe not?

Thank you very much indeed for your time looking at this.

t4mof

fraja wrote: »

Groceries - I included toiletries, household stuff like cling film, toilet roll, etc in that, not just food. We both take lunch to work a fair bit, so that bumps it up a bit, though with more careful meal planning, I know I can get that down.

My grocery shop includes all of the above as well and we rarely spend over £300 a month for a family of 4 with packed lunches (and I'm desparate to get this down to £250!) Do you buy supermarket own brands?? If not, try dropping a brand. The supermarket own brands are fine for most products.

fraja

Yes, often buy own brands.

Also often shop when I'm hungry though - fatal... Will try better meal planning and see how I go!

What sort of meals do you have? Do you eg have a roast that does for other things in the week? We've been doing that with eg gammon and using the leftover ham for sandwiches.

judi24

Hi fraja - just wanted to say well done on posting - The main thing I can see on your SOA is your grocery bill - I have 2 daults, 2 teenagers and 2 younger kids - and a dog and a cat - and spend around £360 a month including toiletaries,cleaning stuff etc - and I work full time - I changed to own brands and value brands for somethings and online shopping saves money cos you can meal plan and keep to a list.

Consoldating is usually not good as the temptation to run up more CC debt never goes away (i speak from experience as do many others on here!) I will be debt free soon - but my shopping habits have changed and I budget to within an inch of my life - but I won't EVER go back to spending like I used to! I will always ask 'do I need it? and can I afford it?' and I have only learnt that by paying off my debt by cutting down and doing without!

Don't want to depress you but I don't think consolodation is the way to go!

t4mof

fraja wrote: »

What sort of meals do you have? Do you eg have a roast that does for other things in the week? We've been doing that with eg gammon and using the leftover ham for sandwiches.

No, I'm a bit rubbish at that TBH! We had a roast today and ate it all.:D

At the moment Tesco are doing 2 large mince packs for £6 and it makes 4 separate meals for me and DH (so 8 meals really iyswim). DS2 will sometimes have it as well. So I'll make a cottage pie for example and that is 2 meals.

Also, Tesco do some frozen chicken on offer at £2.99 a bag. When the offer is on I buy it every week and then get through it when the price goes back up to £5.99. Sometimes we'll buy tins of ravioli and have that with a jacket potato - I'd eat things like that every night by DH's weakness is food so I have to balance things out a bit.

Risottos are cheap to make (and don't always need meat which keeps the cost down) and I picked up 1kg of pasta today for 99p which should last a few weeks.

I spent £77.22 today (that included deodorant for me and OH, shower gel, toothpaste, bottle of wine for friend's birthday, toilet roll, bin liners and some other non-food bits and pieces) and I'm hoping that everything I've bought in will last us until 22nd April (we're going to Cornwall 23rd-26th and payday is 23rd). We'll have to top up with bread, milk etc but if I don't spend more than £20, I'll have spent less than £100 for almost 2 weeks.

One thing I do before I go shopping is do it online first - I search out all the BOGOFs and other deals and then put everything I need in the basket. I then write out my shopping list and go to Tesco (don't want to pay for delivery anymore!). I know before I even step into the supermarket how much my bill is going to be and can adjust things before I leave the house.

Other people will say to shop at different supermarkets for different things but I don't really have the time or inclination for that - and anyway I like my Clubcard points and the extra I may spend in Tesco from time to time is more than made up for with days out vouchers.

fraja

Judi, you're right re consolidating/running up more debt. We did pay off our credit cards and only had our loan when we moved here three years ago and then things, well, slipped. Our fault though.

I realised I didn't put contact lenses or dental insurance on the SOA last night (as I was cleaning my teeth!). So that's another £57 a month (which sounds like a lot (it does sound like a lot, doesn't it?), but that's inclusive of everything, eye tests, solutions, check-ups, hygienist, etc).

I think that's a brilliant idea to shop online before you go to the shop - I did shop online for a while, but the rubbish you get for fruit and veg sometimes. And they always substitute the things you actually really wanted with something you'd never use, so you end up going to the shops anyway.

Agree re the days out vouchers too. I use those a lot. The children really like going to Pizza Express, which they pay for from time to time. We tend to buy our petrol from Tesco too and our electricity/gas also earns us points.

I am pretty good at seeking out offers, but it's just that I don't pay much attention to what I'm spending in areas I could easily cut down. And interest rates etc baffle me. I had no idea, for instance, that the HSBC card was 21.9% until last night, which horrified me for two reasons, first that it was so high and second that I had no idea!

Thank you again for your replies. It's nice to know there are other people who have beaten the "Oh, it's only a tenner, it's pretty/looks useful, buy it!" demon!

bargainbetty

May I ask where you get your mortgage insurance from? If it is with your mortgage provider, shop around immediately, as they tend to jack up the prices - this is very high!

To help reduce your shopping bills, do a full inventory first - go through every cupboard, and make lists of what you have, then you know what not to buy as well as what to buy. I did this, and found enough cleaning products to last six months - half bottles of everything in the market place, I think. I had seven bottles of bleach for no apparent reason.

Once your food cupboards are done, your meal-planning will get easier too, as you might find ways to use up old stuff.

Good luck

fraja

It's through Paymentcare, same place as our buildings and contents. I think. Oh, dear, I really do need to spring clean everything, don't I?!

Good idea re cupboard inventory. Will get DH onto that as he likes spreadsheets and similar!