Lightbulb Moment

coxj2901

Hi All,

This is my first post as I have finally reached my lightbulb moment and after reading some of the various posts on this forum I would like to try and regain control of my finances. I am 29 years of age and I'm married with 2 young children. My wife does not work as she stays at home to look after the children so my income is the only income we receive. Here is my monthly SOA. Any help would be greatly appreciated as I feel that if I don't do something soon there will be no turning back.

Income £2,640
Tax Credits £40
Family Allowance £60
Total Income £2,740

Outgoings
Northern Rock Mortgage (6.4% Variable) £875
Northern Rock Unsecured Loan (6.4% Variable) £75
MBNA Unsecured Loan (12.9% APR) £337
Firstplus Secured Loan (10.9%APR) £219.68
TSB Loan (12.9% APR) £150.00
Gas (Southern Electric) £50.00
Electric (Southern Electric) £50.00
Car 1 Insurance (Direct Line) £27.00
Car 2 Insurance (Direct Line) £30.00
BT Group (Broadband Internet) £27.00
Savings Account Transfer £50.00
Nursery Fees £80.00
Shopping £350.00
Petrol (2 Cars) £100.00
BT Telephone £25.00
Severn Trent Water £22.91
Gym Membership £22.00
O/Draft Interest (19.9% APR) £20.00
Family Equity Plan (Savings for Children) £20.00
Norwich Union Life Insurance £12.08
TV Licence £10.99
Sky Digital £19.99
Bank Account Fees £10.00
Total Outgoings £2,693

Disposable Income £51.07

Debt as @ 1 Aug 2006

Mortgage (18 years remaining) £112,000
Unsecured Loan Linked to Mortgage (18 yrs) £12,000
FirstPlus Secured Loan (15yrs) £26,000
MBNA Unsecured Loan (6yrs) £16,500
TSB Unsecured Loan (4 1/2 Yrs) £5,400
Barclays Overdraft £3,720
Lloyds Overdraft £200
Total Debt £175,820

Total Savings £123.00

To give you some more background information.

1. I am tied into my current mortgage deal until Sep 2009.

2. I have just changed my telephone provider to TalkTalk which should give me broadband and telephone @ £20 per month.

3. I am tied into Sky digital for a further 11 months

4. We run a website selling vinyl records in our spare time which makes around £100 per month split by 3 shareholders. We are currently investing 100% of the profits back into the business and therefore taking no salary or dividends.

5. I have just changed my gas and electric from British Gas to Southern Electric

6. I am a qualified chartered management account so may be able to use these skills to earn extra revenue ?

7. My house is valued at around £135,000 so there is no equity in the house

I am approaching crisis point so any help you can give me would be most welcome. Thank you for your time and apologies for the long message :rolleyes:

Rgds, John

Floss

How come you only get £60 Family Allowance for 2 kiddies? I have been getting £69.80 every 4 weeks for 1 child!

And nursery fees - sorry if this is rude, but your wife doesn't work. Doesn't the Government give free nursery education to children over a certain age?

second_chance

hi im no expert but i think you could make quite a lot of savings here.... what about cancelling savings transfer(or reducing), cancelling gym and taking up walking (!) could you reduce nursery fees by taking advantage of family??x

mrs_mug_2

coxj2901 wrote:

Hi All,

This is my first post as I have finally reached my lightbulb moment and after reading some of the various posts on this forum I would like to try and regain control of my finances. I am 29 years of age and I'm married with 2 young children. My wife does not work as she stays at home to look after the children so my income is the only income we receive. Here is my monthly SOA. Any help would be greatly appreciated as I feel that if I don't do something soon there will be no turning back.

Income £2,640
Tax Credits £40
Family Allowance £60
Total Income £2,740

Outgoings
Northern Rock Mortgage (6.4% Variable) £875
Northern Rock Unsecured Loan (6.4% Variable) £75
MBNA Unsecured Loan (12.9% APR) £337
Firstplus Secured Loan (10.9%APR) £219.68
TSB Loan (12.9% APR) £150.00
Gas (Southern Electric) £50.00
Electric (Southern Electric) £50.00
Car 1 Insurance (Direct Line) £27.00
Car 2 Insurance (Direct Line) £30.00 Do you need 2 cars?
BT Group (Broadband Internet) £27.00
Savings Account Transfer £50.00 quit saving for now and put a further £50/month to your debts
Nursery Fees £80.00 is this needed if your oh is a sahm?
Shopping £350.00 you could reduce this, our food budget is £160 /month for 2 adults and 2 toddlers
Petrol (2 Cars) £100.00 do you need 2 cars if your oh isn't working?
BT Telephone £25.00
Severn Trent Water £22.91
Gym Membership £22.00 You could put this money towards your debts and run for free
O/Draft Interest (19.9% APR) £20.00
Family Equity Plan (Savings for Children) £20.00
Norwich Union Life Insurance £12.08
TV Licence £10.99
Sky Digital £19.99 Can you cut this and get a freeview box?
Bank Account Fees £10.00
Total Outgoings £2,693

Disposable Income £51.07

Debt as @ 1 Aug 2006

Mortgage (18 years remaining) £112,000
Unsecured Loan Linked to Mortgage (18 yrs) £12,000
FirstPlus Secured Loan (15yrs) £26,000
MBNA Unsecured Loan (6yrs) £16,500
TSB Unsecured Loan (4 1/2 Yrs) £5,400
Barclays Overdraft £3,720
Lloyds Overdraft £200
Total Debt £175,820

Total Savings £123.00

To give you some more background information.

1. I am tied into my current mortgage deal until Sep 2009.

2. I have just changed my telephone provider to TalkTalk which should give me broadband and telephone @ £20 per month.

3. I am tied into Sky digital for a further 11 months

4. We run a website selling vinyl records in our spare time which makes around £100 per month split by 3 shareholders. We are currently investing 100% of the profits back into the business and therefore taking no salary or dividends.

5. I have just changed my gas and electric from British Gas to Southern Electric

6. I am a qualified chartered management account so may be able to use these skills to earn extra revenue ?

7. My house is valued at around £135,000 so there is no in the house

I am approaching crisis point so any help you can give me would be most welcome. Thank you for your time and apologies for the long message :rolleyes:

Rgds, John

Just a few things I'd question there.

We're in a very similar position - 2 toddlers, I'm a stay at home mum (and our SOA looked very much like yours a week or so ago!) I'm new here so haven't got lots of advice, except that knuckling down to money saving actually makes you feel very good about yourself.
We've saved over £100 a month by cancelling sky, switching home and contents insurer, switching current accounts so we get a 0% overdraft for a year, reducing mobile phone bill tariffs, cutting out savings and looking at our life assurance policies again.
I hope someone can come along and help you a bit more .

Emmzi

erm.. well, let's start on things you can't afford, and see how bright the lightbulb is shining!!


Well done for changing leccy

When did you last compare car insurance quotes?

Why do you need 2 cars if only one of you works? (and where are car maintainence, road tax etc costs?)

You don't have enough money to be saving money, and it doesn't seem to be working from the tiny 'pot' you have - stop this DD.

Is there a free mother and toddler group instead of nursery?

See you have already swithed telephones (no mobile? excellent!)

Gym membership as opposed to running and walking?

Get sky down to cheapest package @ £15 if you are tied in

Bank account fee @ £10 - do you get £10 of benefit for it? If not, switch accounts to a free one

Is any of that doable?

mintymoneysaver

coxj2901 wrote:

Income £2,640
Tax Credits £40
Family Allowance £60
Total Income £2,740

Outgoings
Northern Rock Mortgage (6.4% Variable) £875
Northern Rock Unsecured Loan (6.4% Variable) £75
MBNA Unsecured Loan (12.9% APR) £337
Firstplus Secured Loan (10.9%APR) £219.68
TSB Loan (12.9% APR) £150.00
Gas (Southern Electric) £50.00seems high
Electric (Southern Electric) £50.00seems high also!
Car 1 Insurance (Direct Line) £27.00
Car 2 Insurance (Direct Line) £30.00do you really have to run 2 cars?could your wife do without or could you get public transport?
BT Group (Broadband Internet) £27.00
Savings Account Transfer £50.00don't bother saving anything until you've got those overdrafts under control, you're losing more interest than you're earning
Nursery Fees £80.00I'm sure there is a good reason for this, but could you do without this?
Shopping £350.00that's quite a big shopping budget,it could probably be reduced
Petrol (2 Cars) £100.00again, if you could run on 1 car this would be reduced
BT Telephone £25.00
Severn Trent Water £22.91
Gym Membership £22.00this is an obvious way to save some money, you can always rejoin later
O/Draft Interest (19.9% APR) £20.00Alliance and Leicester are offering a 0% overdraft,for a year I think, if you fancied transferring your current account.They also give you £50 if you are referred
Family Equity Plan (Savings for Children) £20.00much as I hate to suggest this, could you put a hold on this for now?
Norwich Union Life Insurance £12.08
TV Licence £10.99
Sky Digital £19.99another thing that you could do without if you had to
Bank Account Fees £10.00why not get an account that doesn't charge?
Total Outgoings £2,693

Disposable Income £51.07

Debt as @ 1 Aug 2006

Mortgage (18 years remaining) £112,000
Unsecured Loan Linked to Mortgage (18 yrs) £12,000
FirstPlus Secured Loan (15yrs) £26,000that's a big loan!
MBNA Unsecured Loan (6yrs) £16,500
TSB Unsecured Loan (4 1/2 Yrs) £5,400
Barclays Overdraft £3,720
Lloyds Overdraft £200this could be gone n a couple of months with careful planning
Total Debt £175,820

Total Savings £123.00use this to pay off your overdraft!

You earn a good salary but I appreciate that it has to look after 4 of you.A huge amount of your salary is going on these loans, you'd be quite rich if it wasn't for them!Were they used for consolidation purposes, as I notice you have no credit card debt? You have not mentioned clothes, birthdays, car tax etc in your outgoings, where do these come from?
People on here who know much more than me will be along soon, but these were just my thoughts, hope they are of a little help.

CLAPTON

well done for posting your SoA.

some comments :

your SoA shows a surplus of £51 but presumably in practice you never actually see this? This is probably because you have left out many of your costs.
e.g. you have two cars but dont show any costs for Car tax, MOTs, servicing, RAC/AA etc; there's nothing in for clothes, presents, xmas costs, children related costs (activities, days out, etc); nothing for holidays, any lunches at work, going out expenses , occasional takeaways, haircuts, any optical/dental/medical costs..
You might consider keeping spending diary so you can better see where money is really going, also think about all the likely oneoffs or annual costs you're going to spend over the next year and add these to your budget (obviously dividing by 12 ) and see the real surplus or deficit.


on you SoA

Gas and Electric at 50 each could be cut back...in addition to changing suppliers, have you checked the meter readings against the bills, reduce the amount of time the CH is switched on in winter, reduced use of electric appliances

Cars: if your wife doesnot go to work can you do with only one car? or really the issue is can you afford it?

BT broadband and telephone costs are very high but you say you are changing these.

Savings and Childrens plan....stop these, it make no sense to borrow money at 19.9% or 12.9% in order to save at (say) 5%

Gym....you can't afford it

Why are you spending 80 on a nursery if your wife is at home looking after the children?

Are there other ways of increasing your income, could your OH get a parttime job in the evening or weekend?

coxj2901

Thank you for the responses so far. Apologies for having two threads running as I hit the post button twice by mistake. Can these be merged?

In answer to the questions posted above:

1. We have considered selling one of our cars and making do with one. We have a BMW 1 Series that we purchased around 4 months ago for circa £15k and realistically I would only get between £11 - £12k for it if sold privately. I guess it would make sense to sell it though and accept that it was another bad decision to purchase a car I couldn't afford.

2. The gas and electric are fixed at £50 until they can see some usage history at which point they will amend them.

3. I'm tied into Sky but could reduce to minimum package.

4. The gym membership is for my wife I have just cancelled mine.

5. My wife does the shopping but I will get closer to this to see where we can save.

6. The savings are low because this is what I use for paying off the car tax, MOT's etc...........

7. Holidays etc... have historically come from either bonuses or by lending more money.

Here is my plan over the next week to kick start things

1. I will apply for the alliance and leicester 0% bank account and transfer my overdraft to there (£30 per month saving)

2. Draw up a shopping budget to aim to spend £250 per month for 2 adults, 2 children and a dog. (£100 per month savings)

3. Cancel the childrens saving (£20 per month saved)

4. Reduce Sky down to minimum package (£5 per month savings)

5. Cancel the savings account transfer and use the money to pay off my overdraft. I will have to budget for car tax, MOT's etc......

6. Keep a spending diary for the next month to see exactly what we are spending money on.

goingtothedogs

Have a read of Martin's article on Nursey Vouchers. If your company run the scheme you could save a wad of cash. If not i think it can be quite easy to persuade it if it's a large company. You would just need to speak to HR.

tyllwyd

I agree with other posters who have said that £80 per month is a lot to be spending on nursery fees if you aren't working. Will this go down soonish if one of the children starts school?

And if you are saving £50 per month, has this built up into a decent pot of money? Would it be worth using that money to pay off some of your debt? (I know that it seems that you are losing your savings, but in effect you have already made the decision to spend that money by taking on so many loans.)

mrs_mug_2

We called to cancel sky and they offered us the basic package for £7.50 for 6 months instead of £20. Might be worth trying the old 'my mate has got it for £7.50 a month, why can't I ahve it at that price' line. Sometimes works.

Definately a good idea to trade the car in now while it is still worth close to what you paid for it. And remember you'll be saving on insurance, tax, mot, petrol....

Ask your wife to cancel her gym. Really, that money could be spent a lot better. Are your children still in pushchairs? Maybe she could power walk with them for an hour a day instead? And can I ask about the nursery? Are you aware that children over 3 get 12 and a bit free hours a week at a nursery school? Or are they too young for that?