SOA - please advise how to cut debt

Miss_Penny_Pincher_2

A friend of mine is trying to budget and keeps getting into debt. She's come up with a new budget that she's going to try to stick to but she's nearing retirement and is scared to retire cos her outgoings are so high!! I've told her she needs to cut costs as they seem high to me e.g. water bill and lottery!!! She's sent me an SOA so I wondered if you kind MSEs could advise on where / how she can cut back. This budget covers 2 adults who live in a 4 bed house but ideally don't want to sell as they have a lot of people they like to host for. Food bill seems high to me but she likes to buy organic / fairtrade as well as hosting.

Monthly Incomings
£1636

Monthly Bills
£ 12.13 TV License
£ 42.82 Water
£ 35 Electricity
£ 25 Mobile Phone
£ 33.50 BT landline and internet
£ 69 Gas
£ 7.33 Life Insurance
£ 92.23 Council Tax
£ 35 House Insurance
£ 6.25 Boiler Cover
£ 12 Charity
£ 17.08 Car Tax
£ 18.33 Car Insurance
£ 12.50 RAC

£ 13 Household Maintenance
£ 83.33 Car Maintenance
£ 8.33 Opticians
£ 16.67 Dentists
£ 50 Courses
£ 50 Furniture/Electrical
£ 33.33 Birthdays
£ 50 Pocket Money
£ 66.66 2 holidays
£ 50 Christmas

£346.67 Food and Household Shopping
£108.33 Petrol
£ 50 Grandkids
£ 20 Days Out
£ 43.33 Car boot shopping
£ 50 Eating Out
£ 8.33 Complimentary Therapies
£ 5 Haircut
£ 25 Clothes
£ 32.5 Lottery

Total Outgoings
£1528.65

McKneff

Monthly Bills
£ 12.13 TV License
£ 42.82 Water - get a water meter
£ 35 Electricity
£ 25 Mobile Phone - get a payg
£ 33.50 BT landline and internet
£ 69 Gas - seems a bit high together with electricit
£ 7.33 Life Insurance
£ 92.23 Council Tax
£ 35 House Insurance - Seem quite high when you x by 12, shop around
£ 6.25 Boiler Cover
£ 12 Charity - Stop these payments, you cant afford them
£ 17.08 Car Tax
£ 18.33 Car Insurance
£ 12.50 RAC - Too expensive, change to a cheaper tariff

£ 13 Household Maintenance
£ 83.33 Car Maintenance
£ 8.33 Opticians - For what
£ 16.67 Dentists
£ 50 Courses - A month, can you elaborate, do you need them.
£ 50 Furniture/Electrical - Is this a hire purchase payment.
£ 33.33 Birthdays
£ 50 Pocket Money - Pay this off your debts all but a tenner
£ 66.66 2 holidays - Have holidays when you can afford them.
£ 50 Christmas - You really need to cut this down

£346.67 Food and Household Shopping - Could be cut down drastically with meal planning
£108.33 Petrol
£ 50 Grandkids - Tell them you cant afford it, why do you give them this each month
£ 20 Days Out - Lots of days out are free
£ 43.33 Car boot shopping - Stop going, or do a stall yourself. Too much spending
£ 50 Eating Out - Meal planning, stop eating out.
£ 8.33 Complimentary Therapies -Get a free book from the library and learn todo it yourself or with a friend.
£ 5 Haircut
£ 25 Clothes - Youve probably enough clothes in your wardrobe to last for years
£ 32.5 Lottery - just do 1 go on a Sat and one on a Wednesday

She would save a fortune with the above.

katsu

What a nice friend you are.

Miss_Penny_Pincher wrote: »

...This budget covers 2 adults who live in a 4 bed house but ideally don't want to sell as they have a lot of people they like to host for. Food bill seems high to me but she likes to buy organic / fairtrade as well as hosting.

Monthly Incomings
£1636

Monthly Bills
£ 12.13 TV License
£ 42.82 Water - high for two adults - they could consider a meter as they should save money unless all their guests shower and bath at their house!
£ 35 Electricity
£ 25 Mobile Phone - check they can't drop a tarriff
£ 33.50 BT landline and internet - check for cheaper on the main site tabs. This is too dear.
£ 69 Gas - again too high. Check a comparison site to see if they can get a better gas and electric deal.
£ 7.33 Life Insurance
£ 92.23 Council Tax
£ 35 House Insurance they should check a comparison site and ensure they don;t have insurance they don't need i.e. excessive accidental damage on things like a TV they would not claim for.
£ 6.25 Boiler Cover martin has advice on best deals for this on a tab at the top of the site somewhere.
£ 12 Charity may begin at home for a while?
£ 17.08 Car Tax
£ 18.33 Car Insurance check best deal on comparison sites
£ 12.50 RAC this can be hugely reduced. Autoaid for £37 if they could pay a roadside claim and reclaim (i.e. credit card) or about £67 to Boncaster. Check out the info on the motoring/car tab.

£ 13 Household Maintenance what exactly?
£ 83.33 Car Maintenance at nearly £1k pa they could buy a cheap car - suggest reviewing.
£ 8.33 Opticians contact lenses or glasses?
£ 16.67 Dentists
£ 50 Courses how long for? eligible for reductions?
£ 50 Furniture/Electrical ???
£ 33.33 Birthdays this can be reduced.
£ 50 Pocket Money might need to budget this out instead of "wasting" £600pa on random stuff.
£ 66.66 2 holidays
£ 50 Christmas this can definitely be reduced. They can reduce this by half easily.

£346.67 Food and Household Shopping
£108.33 Petrol
£ 50 Grandkids a month? am sure they could cut back when no longer working
£ 20 Days Out
£ 43.33 Car boot shopping get this from pocket money or other shopping budgets - or not keep buying stuff?
£ 50 Eating Out may need to do this less often
£ 8.33 Complimentary Therapies
£ 5 Haircut
£ 25 Clothes
£ 32.5 Lottery stop.

Total Outgoings
£1528.65

Hope some of this helps. I suggest that your friend checks how it compares to their recent spending and uses a spending diary to track their progress against their budget.

Miss_Penny_Pincher_2

thanks so much mckneff and katsu. i don't have a car so don't have a clue about those costs at all! I know she likes to be loyal to RAC as trusts them but seems loads higher than the options u suggested katsu.

the opticians spend is towards buying glasses. the course is to get a qualification that she's dreamed of doing for a while and will enable her to go self-employed hence even more need to cut her expenditure!

the £50 for grandkids was to buy them toys / clothes etc which she doesn't need to do but likes to spoil them so I will tell her to cut this back! i suspect that the £50 furniture / electrical is towards buying new laptops etc so I will suggest she cuts that budget and the pocket money one!! i will pass on all your suggestions to her! there's loads of ideas here - could there be any other painfree or painful savings she can make?

Tixy

Has she been through all the potential reclaim items (from the tab at the top), such as checking they are in the right council tax band, checking if they paid a mortgage exit fee that they could reclaim etc. Even any old PPI or credit card charges etc.

If they look at switching providers for many of the items suggested already these should be painfree and should save quite a lot. Giving companies your loyalty gives nothing in return (except perhaps debt from what you have said)

Your friend does need to realise that as she nears retirement she will have to make some of these cutbacks and by starting now she is getting in early (call it practising!).

Maybe worth mentioning that some people on here feed a family of 5 on £200 per month (including cleaning products etc - and still ensuring the eat healthly wellbalanced meals) - this might put the £346 for 2 in to context.
If she likes organic local products could she consider growing some of her own? Or try buying at a local farmers markets which will be much cheaper than supermarkets prepacked organic items.

Angiebabe

Just a note on their grocery bill; it's about the same as my 'target' for 2 adults + 2 children. If all groceries are with Mr T (Tesco!) then with the clubcard vouchers we receive quarterly, we fund our annual RAC membership, a 5 day caravan holiday at Whitsun and day trips to Hampton Court, Legoland and either Tower of London or Whipsnade/Woburn in the holidays. Your friend should maximise these little extras and could then treat her grandchildren without parting with precious cash. (I think Nectar points does something similar).

misscousinitt

Hi

Not much to add really except to say that I buy organic and free range (most of the time and our budget is £200 (but I allow £260). I also like to entertain, but usually manage to do this from what I've got in and about £3-£5 per head MAX. Even with organic, free range and enertaining - the grocery spend should be easily cut by £100. There is a thread on OS called 'Do I really spend too much of food?' its full of tips on how to eat the same stuff, but pay less for it.

Good luck with passing on the info, lets hope its all taken on board.

Miss_Penny_Pincher_2

Tixy wrote: »

Has she been through all the potential reclaim items

I will check with her!

Tixy wrote: »

Your friend does need to realise that as she nears retirement she will have to make some of these cutbacks and by starting now she is getting in early (call it practising!).

I think it's slowly sinking in after I told her she will have to retire and make these cutbacks some time...

Tixy wrote: »

Maybe worth mentioning that some people on here feed a family of 5 on £200 per month (including cleaning products etc - and still ensuring the eat healthly wellbalanced meals) - this might put the £346 for 2 in to context.

I will do that. She used to feed 2 adults + 5 children + 2 cats on a much smaller budget but as her disposable income increased so has her reliance on it I fear.

misscousinitt wrote: »

Hi

Not much to add really except to say that I buy organic and free range (most of the time and our budget is £200 (but I allow £260). I also like to entertain, but usually manage to do this from what I've got in and about £3-£5 per head MAX. Even with organic, free range and enertaining - the grocery spend should be easily cut by £100. There is a thread on OS called 'Do I really spend too much of food?' its full of tips on how to eat the same stuff, but pay less for it.

Good luck with passing on the info, lets hope its all taken on board.

That's really useful to help put it in context for her. Also she doesn't buy any alcohol except at christmas, I think!

Angiebabe wrote: »

Just a note on their grocery bill; it's about the same as my 'target' for 2 adults + 2 children. If all groceries are with Mr T (Tesco!) then with the clubcard vouchers we receive quarterly, we fund our annual RAC membership, a 5 day caravan holiday at Whitsun and day trips to Hampton Court, Legoland and either Tower of London or Whipsnade/Woburn in the holidays. Your friend should maximise these little extras and could then treat her grandchildren without parting with precious cash. (I think Nectar points does something similar).

Good idea - I think she does some of her shopping in Tesco so will mention the RAC to her and suggest she treats her grandkids through free outings although they are still all under 1 year old which is why she has been so extravagent with toys and clothes maybe?