First Timer - Put me on the right path

Phil_Gr

First time post go easy on me,

I found this site after it was refered to me from another forum regarding getting a better mobile deal, been lurking for a couple of days and im astonished at what appears to be possible if you keep a tight hold on your finances

I have a Reasonable income, we have just built a large extension and trying to get our finances back in order after the last 12months of spending more than we had coming in :rolleyes:

Our current financial situation

Monthly Incomings:
My salary - £3550
Child Benefit - £69

Total - £3619

Monthly Outgoings:
Mortgage - £700 (inc £100 over payment)
Loan - £306
Council Tax - £104
Water - £32
House insurance - £37
Life insurance - £40
Endowment - £64
Mobile - £30
Gas - £45
Electric - £55
TV License - £11
Sky £36.00
Internet - £25
Phone - £50
Housekeeping - £400 (food & misc money for wife)
Running Costs for 2 Cars - £200 (insurance, Tax, Servicing, etc)
Petrol - £100

Total: £2235

Debits
Mortgage Balance £76000 @5.39%
Lloyds TSB Loan Balance - £7500 @ 6% 28 payments left
Egg Money CC Balance - £1000

Total Debit - £ 84500

Savings Account - £18500

Now i realise that my situation is not that bad, but i would like to get a grip on my finances especially with the last 12 months being a bit of a spend fest,

My aim would be to maximise my monthly outgoings, and set up a debit reduction plan to ultimatly clear my morgage ASAP

Thanks

Phil G

Emmzi

Welcome! Ahh come on.. you don't really want us to go easy do you?You want ALL the ideas we got!

oK... here's some suggestions and questions... feel free to ignore the ones you don't like!

Phil_Gr wrote:

Monthly Outgoings:
Mortgage - £700 (inc £100 over payment)
Loan - £306
Council Tax - £104
Water - £32 (CHECKED IF YOU'RE CHEAPER ON A METER?)
House insurance - £37 (WHEN WAS LAST REVIEW?)
Life insurance - £40 (DO YOU NEED THIS AS WELL AS LIFE ELEMENT OF THE ENDOWMENT?)
Endowment - £64
Mobile - £30
Gas - £45 (WHEN DID YOU LAST SWITCH/ CHECK?)
Electric - £55 (AS GAS)
TV License - £11
Sky £36.00 (HEH HEH..YOU KNOW THIS IS PURE INDULGENT LUXURY, RIGHT? CHECKED YOUR PACKAGE? TRIED TO GET EM TO GIVE YOU HALF PRICE?)
Internet - £25 (YOU CAN DEF. GET THIS DOWN TO £15 WITH NO EFFORT)
Phone - £50 (VERY VERY HIGH! DO YOU HAVE MATES ABROAD?)
Housekeeping - £400 (food & misc money for wife) (FOOD COULD COME DOWN TO £200 WITH SOME OLD STYLE HELP)
Running Costs for 2 Cars - £200 (insurance, Tax, Servicing, etc)(WHY DO YOU NEED TWO?)
Petrol - £100

Emmzi

ps how much interest would you save using savings to pay loan and cc off now? More than the interest you're earning...

lynzpower

If you have 18.5k in savings, what are they for? Couldnt you pay off the loan with those, or at least stop your overpayment and pay off the 18.5k off the mortgage?

make_life_easier

I agree with Iynzpower. Pay at least the lloyds tsb loan as your probably paying more interest than you are gaining on your savings. How much is the interest on your credit card?

Phil_Gr

Thanks for the quick responses, pretty much what i expected :eek:

Ill try to answer the questions posted

1, Water - No have not checked if it would be cheaper with a meter, but i friend who lives in a similar house nearby has and his bills are more expensive.
2, House Insurance - Not reviewed this at all since i took out a morgage 12 years ago - top of my list to sort out :rolleyes:
3, Life Insurance - the endowment only covers me, and only for half the value of the morgage, The life policy covers myself and my wife for the full value of the morgage and for critical illness, im pretty happy with the cover, i could prob get it cheaper, ill look into it but its not at the top of the list.
4, Gas / Electric - my payments are currently on the high side, i have activly been monitoring my gas & electrical consumption and over the last 4 months have dropped a lot , i expect to be in credit on both these accounts, and when the dust settles on the latest round of price hikes ill look to change suppliers
5, Sky - Yes it is a luxury and one i would like to keep i dont have the full package im only paying for the channels i want.
6, Internet - Yes i can get the a lot cheaper without too much trouble, and i have gone down this path recently but i found that the quality of service suffered, the internet have an important place in my work, free time, and my daughters education so i choose to pay that little bit extra and get the quality of service.
7, Phone - just looked back over my bills and its more like £20 per month my mistake :rolleyes:
8, Housekeeping - this covers the wifes living expenses as well as the household food bill, could try to chop it down a bit
9, Cars - Yes 2 cars are essential, on the +ve side they are both paid for.
10, Savings - My line of work is contract so i like to have a nest egg if i fall on hard times, i appreciate this could be better used to clear some debits, and i might just clear the loan with some of the savings.

Hope the above answers some of the questions posted.

Again thanx for the replies

beanielou

Hiya Phil Gr
If you pay off lloyds and Egg you will still have £10,000 in the pot.
you can then overpay mortgage by the amount saved on loan/cc repayments.
HTH

Phil_Gr

*Update*

Been busy this last Week

The £7500 Loan Debit has been cleared with money from the savings

The £1000 credit card debit has been cleared using some overtime payments

The £306 from the loan has been added to my Morgage payments which are now £600 + £400 overpayment

Have new contract from 02, old bill was £30 (200mins), new bill £15 (500mins)

Have switched my Gas & Elect

Thanx for the advice

Phil G

Dr.Shoe_2

Phil_Gr wrote:

First time post go easy on me,

I found this site after it was refered to me from another forum regarding getting a better mobile deal, been lurking for a couple of days and im astonished at what appears to be possible if you keep a tight hold on your finances

I have a Reasonable income, we have just built a large extension and trying to get our finances back in order after the last 12months of spending more than we had coming in :rolleyes:

Our current financial situation

Monthly Incomings:
My salary - £3550
Child Benefit - £69

Total - £3619

Monthly Outgoings:
Mortgage - £700 (inc £100 over payment)
Loan - £306
Council Tax - £104
Water - £32
House insurance - £37 Shop around for a better deal
Life insurance - £40 [B]Probably unneccesary as you have an endowment which will have a full life element, and you will almost certainly have PP on your debts?[/B]
Endowment - £64
Mobile - £30 [B]When you qualify for an upgrade, take the loyalty option intsead and half your bill. It is actually cheaper to buy a handset than pay £15 per month (£180 per annum) for a £100 discount![/B]
Gas - £45
Electric - £55 Uswitch?
TV License - £11
Sky £36.00 Tell them you want to cancel your subscription and they'll give you 3 months at half price.
Internet - £25 Internet and phone can now be amalgamated into one package, I've found talktalk to be OK :rolleyes: but not the best. This will save money on your landline too.
Phone - £50 My landline has dropped from £85 to £29.99 per month with talktalk (my main reason for having it). I have a brother in Cyprus and a Father in the USA, I can speak to both for free now and I save £29.99 for broadband to boot.
Housekeeping - £400 (food & misc money for wife) Reasonable as you can evidently afford itRunning Costs for 2 Cars - £200 (insurance, Tax, Servicing, etc)
Petrol - £100 I would look for car share opportunities personally

Total: £2235

Debits
Mortgage Balance £76000 @5.39%
Lloyds TSB Loan Balance - £7500 @ 6% 28 payments left Why are you paying 6% interest when you can afford to pay this off in one lump? You should get a rebate for early settlement, paying this off now could save you a grand!
Egg Money CC Balance - £1000 I'm assuming that you still have an interest free period to run or else you're barking!

Total Debit - £ 84500

Savings Account - £18500 This is a third of your mortgage, why is it just sitting there doing nothing when you say you want to get rid of your mortgage? However, You could put this into ISAs in your name and your wife's name. Continue adding to it and in a few years you will have enough to pay off your mortgage early

Now i realise that my situation is not that bad, but i would like to get a grip on my finances especially with the last 12 months being a bit of a spend fest,

My aim would be to maximise my monthly outgoings, and set up a debit reduction plan to ultimatly clear my morgage ASAP

Thanks

Phil G

If I was in your position, I would seriously consider some kind of offset account like Vigin One or the Nitwit's one they do.

Paying off your loan will leave you with £11,000, add £1000 per month to that (as and when you can afford it) and you will find that in 6 years you should have £71,000 which will be more than enough to pay off your mortgage. Remember of course that you will have the £306 from your loan repayments to put towards this!

I would swap places with you any day!:D

msmicawber

Hi Phil,

I reckon you could still get your phone bills down (for the landline) by using access codes - see https://www.discountdial.com. I put the most used of these on speed dial so my children have no excuse not to use them, and our phone bill is now between £2 and £6 per month painlessly.