debt have built up again - advice please

thewrongboy

Can you please take a look at our SOA. Our mortgage is on an interest only basis. We have 1 son at university and we try to help with food, clothing and mobile and 2nd son at college we help with transport, mobile and gym membership. I have gym membership recommended by GP for wellbeing reasons. I am afraid of taking on a DMP for the sake of my sons and my husband who is over 70yrs. Can anyone make any suggestions - it all goes round and round in my head and I can't find a solution. We both work part time with additional jobs as and when we can get them.

household information:
number of children: 1
number of adults : 3
Number of cars owned: 2

Monthly income details:
monthly income after tax: 1800
partners monthly income after tax 510
Benefits 0
other income 30
Total monthly income: 2340
monthly expense details

mortgage 536
secured/hp loan repayment 0
Rent 0
management charge (leasehold) 28
Council tax 125
Electricity 55
Gas 10
Oil 0
Water rates 35
telephone (land line) 30
mobile phones 60
tv licence 12
Satellite tv 30
internet services (included in land line payment)
Groceries etc. 650
Clothing 15
petrol 100
road tax 35
car insurance 40
car maintenance 25
prescriptions, dentist 10
pet ins/vet 20
buildings ins 8
contents ins 10
life assurance 17
presents (birthday, christm, etc ) 25
haircuts 15
Gym/sports clubs memb (for two) 46

Approx total monthly expenses 1932

Assets

gross house value 200000
cars 1000
total assets 201000

Secured debts

Mortgage 99,000 £536 per month APR: 6.44


Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................3400......75........15.75
credit card....................9500......30........16.62
credit card....................2950......25........15.75
credit card ...................2933......55........18.9
Total unsecured debts..........18783.....185.......-

Monthly budget summary:
Total monthly income: 2340
Expenses (incl secured debts) 1932
monthly unsecured debt repayments 185

craftingmad

Hi, well done for taking the first step and posting on here.

I'm not got as much experience as lots of others on here but wanted to post to let you know how helpful & friendly are on here.

From first glances i would comment the following:-

Do you need 2 cars? Could you make do with 1 for the time being. This would save on petrol costs, tax, insurance etc.

£60 a month for mobile phones seems very high. How many phones is this for and are they on a contract which you could cancel and maybe go on PAYG instead?

Could you go without sateilitte tv for a while - this would save you £30 a month?

I'm sure you cut back on your grocery bill each month. Take a look on the old style money saving board for some great menu ideas and ways to cut back on this spend. It has really helped me.

Does it really cost you £15 a month for haircuts. Is this an area you could cut back on by either cutting your own or not going quite so often?

Could your sons work a few more hours in order to pay for a few more of their own things - even if its only until you get sorted again?

Hope this helps. Sure someone else will come along soon with more advice.

DarkConvict

These are what i can see.

mobile phones 60 - You have a landlane already, chop these down to PAYG, if you NEED a mobile, then drop it to one mobile and drop the landline.

Satellite tv 30 - Luxury item, stop it when the min contract length finishes

Groceries etc. 650 - £60 per person, so should be £240 here, absolute maximum £300! Check out the old style boards and generally search this forum for tips on saving groceries.

Clothing 15 - Buy only what is NEEDed not what is wanted, wear clothes until they need to be replaced

Gym/sports clubs memb (for two) 46 - Again a luxary, when the contract ends (do check the fine print on gyms) cancel them and take up jogging or if you want the gym go once a week and pay the day membership charge not a contract.

presents (birthday, christm, etc ) 25 - Drop to £10 and have it for close family only.

petrol 100 - Can this be reduced?


Use all surplus against your debt with the highest apr, see snowballing - http://www.whatsthecost.com/snowball.aspx

natlie

I think the same really - first thought was car

Groceries- I spend £400 on groceries on a splurge month for 4 of us 2 adults 2 kids however I am aiming to cut this down to £300 this month through the Grocery Challenge on OS - they are a friendly bunch with lots of tips - I understand how expensive it is to feed kids

Mobiles - Can you change to PAYG

Your income per month is quite high - we are only on £1700 why have you got an interst only mortgage? Looking at the outstanding balance this should be on repayment so that you aren't paying when you retire - any chance of downsizing once your 2nd son has gone to uni?


Nat
x

CFC

You need to worry about yourself and not about your children. If your husband is over 70 and you have an interest only mortgage, you need to urgently start thinking about your own financial future rather than funding a gym membership for a fit young person at college!

I presume that £650 per month in groceries gives a fairly extravagant standard of living for yourselves and one young adult - this could very easily be cut down by £300 a month. Try Martin's suggestion of downsizing a brand for a start. Read
http://www.moneysavingexpert.com/shopping/cheap-supermarket-shopping

Do your children have part time jobs to assist in self funding? If not they need to get one. If you are well off you can afford to fund young adults, but you're not....so you can't. You need to wake up and smell the coffee on this one, and it does NOT mean you are a bad mother, you're just not a well-off one. Most parents assisting children through college and uni do not have mortgages or have very teeny ones.

I hope you've cut up the credit cards, if you haven't, then do it now.

thewrongboy

Thank you all for your sound advice. In reality the £650 per month goes on more than food - it seems to disappear. Yes I can do without the satellite and gym. The mortgage is interest only as we had to downsize when my husband retired and pay off any debts and we couldn't afford a repayment one. We obviously haven't managed our money well since to be in this situation. Both boys do have part-time jobs - the second car is shared between the 3 of us (me and 2 sons). I really value your advice. Thank you.

thewrongboy

Thank you all for your sound advice. In reply, we are on an interest only mortgage because we downsized when my husband retired and paid off our existing debts so we obviously haven't managed our money very well to be in this state now. Yes I can do without gym and satellite tv. The money for groceries seems to disappear on more than food each month. I will keep a closer eye on this and change our buying habits. The second car is shared between me and the two boys although I confess myself and 1st son hardly use it. I agree the 3 mobiles are dragging me down - mine is only £13 p.m and the boys £25 each. I take on board what you are saying about funding the boys and thinking about my future. I am very concerned for my future now we are in this amount of debt. Thank you for your time and valued advice.

sueeve

If the boys are at uni i.e. adult it is time that they took responsibilty for themselves and their expenditure. OK, perhaps a roof over their head, but mobiles ? cars? Even if you had more money they should still be learning to be financially responsible.

tallyhoh

You certainly should not be giving your children luxuries like gym membership & mobile phones. Food & shelter is more than enough.

Do they know you have debts, they would probably refuse your help if they knew, my son certainly would.

Perhaps you could have a family chat & decide together where cuts could be made. The suggestions people have given above are a start.

Good Luck.