In some trouble!!

Beatle_Ray

Hi All,

Need some guidance please, i have been trying to find the SOA thread but cant find it, so here goes. My wife and i have been on a series of fertility treatments to have children, sadly none of them worked to full pergnancy term however this has left us with a massive debt, we owed a little before this but nothing like it is at the moment, all of it is on credit cards and i have been trying like desparate to get the overall debt down, i sat at home last night and did my monthly filling, i keep all my statements and invoices neatly filled away, I need to do that so in my mind I'm in control of things, here from my memory of last night are my debts, i might be a little out but not by much,

Barclays £5555
Halifax £12,600
Nat West £4800
CITI £1700
MBNA £8777
EGG £9300
MINT £8000

So a little over £50K, my income is £2137 net per month and my wife who has her own dog walking business/sitting income is around £250 per week, i'm meeting my monthly mimimum payments but looking at it longer term i think over the course of the year i'm paying out roughtly £14,500 in card payments and reducing the debt by about £800 at best and at the rate its going to take about 60 years to pay off which sadly i dont have that long to live, there is no opportunity of increasing my income and my wife the same really, our house is valued at around £235,000 and we owe about £130,000 on it for the mortgage, so what to do, i'm a little bit wary about moving the cards around to interest free just in case it affects my credit rating, i have everything else done cheaply utilites etc so need to have a way out of this. I have a company card which i down sized last year from an Audi TT to a Hyundai diesel which is three years old and which i save about £200 a month on comapred to the TT, should i consolidate it with a loan, sell the house, carry on paying the debt and do nothing else with my life apart from pay the credit card companies back,seems a waste really, would really appreciate some help please

Cheers

Beatle Ray

Jesthar

Hey Beatle Ray,

So sorry to hear about your problems. You can find the link to the SoA calculator in this thread:

https://forums.moneysavingexpert.com/discussion/107280

Fill it out for us and we'll take a good look for you

~Jes

toile

hi beatle ray

although i am the last person to offer financial advice, i would like to say hi, and well done on posting. Help is not far away.

Regards

toile

Beatle_Ray

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 2157
Partners monthly income after tax....... 1000
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3157
Monthly Expense Details
Mortgage................................ 465
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 115
Electricity............................. 34
Gas..................................... 113
Oil..................................... 0
Water rates............................. 74
Telephone (land line)................... 30
Mobile phone............................ 50
TV Licence.............................. 23
Satellite/Cable TV...................... 46.5
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 25
Petrol/diesel........................... 150
Road tax................................ 16
Car Insurance........................... 45
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 18.5
Contents insurance...................... 0
Life assurance ......................... 23.22
Other insurance......................... 18.5
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1471.72

Assets
Cash.................................... 0
House value (Gross)..................... 235000
Shares and bonds........................ 0
Car(s).................................. 6000
Other assets............................ 0
Total Assets............................ 241000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 130000...(465)......0
Total secured & HP debts...... 130000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax........................12600.....265.......0
MBNA...........................8777......166.......0
MINT...........................8000......102.......0
CITI...........................1700......55........0
Nat West.......................4800......102.......0
EGG............................9300......245.......0
Barclaycard....................5555......100.......0
Total unsecured debts..........50732.....1035......-

Monthly Budget Summary
Total monthly income.................... 3,157
Expenses (including HP & secured debts). 1,471.72
Available for debt repayments........... 1,685.28
Monthly UNsecured debt repayments....... 1,035
Amount left after debt repayments....... 650.28
Personal Balance Sheet Summary
Total assets (things you own)........... 241,000
Total HP & Secured debt................. -130,000
Total Unsecured debt.................... -50,732
Net Assets.............................. 60,268
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.
Hope i did this correctly, this is to the best of my knowledge, must point out that mine is a company car so the monthly running costs are down to the company and the petrol of course, i added the RAC cover onto the cost of the wifes maintenance costs although with us both having Hyundai cards with a five year warranty on each it might make sense to change to green flag recovery on both cars,

Thanks

Beatle Ray

JimmyTheWig

Firstly, you need to find out what APR you are paying on each of the credit cards. You need to be paying the minimum on all cards other than the highest interest one which should be paid off first.

Then you need to look at your SOA and decide how honest it is. What happens to that £650 a month at the moment? That would make quite an impact on your debt.

The good news is that your 60 year calculation is wrong. As long as you keep paying the £1035 total each month then you'll pay the debt off in 9 years 4 months. [I suspect the discrepancy is that the £800 a year you are currently reducing the balance by in a year will reduce future years' interest payments meaning you willr educe the balance by more than £800 a year in future years.]
If, however, you can add the £650 to what you are paying off each month that will clear the debts in 3 years and 8 months. By concentrating on the highest interest cards first, it should be even less time than this.

Now, I am sure that there are some places you can cut down. The more you can do that the better. Every tenner you can pay off your debt now will probably reduce what you have to pay back overall by around £25. That's worth doing.
But my argument is to look at the big picture. If you can use that £650 spare cash each month then that is by far more important than saving, say, £10 a month on your mobile phone bills.
My guess is that you don't know where this £650 goes each month. If that is the case then you need to keep a spending diary.

The only other thing I would say to look at now is selling your wife's car. If you can make do with just your car, or if you can buy a cheaper car for your wife then this might be a good way to make a dent in those debts right away.

Scarlet77

Beatle_Ray wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 2157
Partners monthly income after tax....... 1000
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3157
Monthly Expense Details
Mortgage................................ 465
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 115
Electricity............................. 34
Gas..................................... 113
Oil..................................... 0
Water rates............................. 74
Telephone (land line)................... 30
Mobile phone............................ 50
TV Licence.............................. 23
Satellite/Cable TV...................... 46.5
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 25
Petrol/diesel........................... 150
Road tax................................ 16
Car Insurance........................... 45
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 18.5
Contents insurance...................... 0
Life assurance ......................... 23.22
Other insurance......................... 18.5
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1471.72

Assets
Cash.................................... 0
House value (Gross)..................... 235000
Shares and bonds........................ 0
Car(s).................................. 6000
Other assets............................ 0
Total Assets............................ 241000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 130000...(465)......0
Total secured & HP debts...... 130000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax........................12600.....265.......0
MBNA...........................8777......166.......0
MINT...........................8000......102.......0
CITI...........................1700......55........0
Nat West.......................4800......102.......0
EGG............................9300......245.......0
Barclaycard....................5555......100.......0
Total unsecured debts..........50732.....1035......-

Monthly Budget Summary
Total monthly income.................... 3,157
Expenses (including HP & secured debts). 1,471.72
Available for debt repayments........... 1,685.28
Monthly UNsecured debt repayments....... 1,035
Amount left after debt repayments....... 650.28
Personal Balance Sheet Summary
Total assets (things you own)........... 241,000
Total HP & Secured debt................. -130,000
Total Unsecured debt.................... -50,732
Net Assets.............................. 60,268



Hope i did this correctly, this is to the best of my knowledge, must point out that mine is a company car so the monthly running costs are down to the company and the petrol of course, i added the RAC cover onto the cost of the wifes maintenance costs although with us both having Hyundai cards with a five year warranty on each it might make sense to change to green flag recovery on both cars,

Thanks

Beatle Ray

I am no expert - but your gas and water bill look really high to me.

Something I did once was to print out 3 months of statements and go through highlighting all my debit payments - things bought in shops etc..., it was a real eye opener on how much money I was wasting.

Goodluck you will get lots of help here

Beatle_Ray

Hi Jimmythewig,

Thanks for the reply, you made some good points, i know this sounds daft but where will i find the APR quoted for the credit cards, also the other thought I had was that would the credit card companies reduce the interest on the cards if i phoned them up and asked for a better deal and if i did this would it go on my credit score.

As for the two cars, my wife needs hers for her business, she collects the dogs in this and if i dumped mine i would then have to pay out for public transport, as for the where does the extra £650 a month go a lot of that is taken up by my wifes day to day expenses but i realise a proportion of this should and can go to debt repayment, i think a mimimum of £300 a month.

It was encouraging to hear the debt can be paid off in three years, eight months which makes me feel a lot better, please advise on the APR though.

Beatle Ray

Jesthar

Hi Beatle Ray,

The APR should be on your statements, and certainly on the paperwork from when you signed up to the cards, so just hunt it out tonight.

Now, if the 'surplus' £650 isn't actually surplus at all, you need to sit down with your statements for the last few months and work out where it *does* go (and keep this up as a spending diary), as it is amazing where pennies slip away. Once you've done all that, redo your SoA with the other spends added in and you will get a much more accurate view of your position.

The good news, though, is you appear to be in a much better position than you feared. You also have areas where you can make savings (food, for example, and your gas bill is HUGE! Mobile contracts and paid TV could be reviewed too), and if you managed to switch some of the debt from high interest rates to 0% cards you'd save a heap on interest,too. Just don't make more than three applications for 0% cards in six months and you should be OK.

You *could* consider consilidation - but only if it would not be a secured loan. There is no point at all in turning unsecured credit card debt into something you could potentially lose your house over! You may also find it more difficult to overpay on a loan, as they tend to be fixed term and have penalties for overpayments.

Anyway, as long as you accept that you are going to be dealing with this for a while and adjust your spending accordingly, you should be able to handle this (just think, if you really could find an extra £650 a month, you could clear your CITI card in three months!). It's the getting started which can be so hard!

~Jes

Beatle_Ray

Hi Jes,

Thanks for the reply, the potential is promising i admit, what makes this annoying is that my wifes income is variable, she does do better in the summer when people go on holiday so we could reduce completly the CITI card which would be good.

So if i applied for no more than three balance transfers in a six month period then i'd be OK is that correct?

Beatle Ray

WorkingHardDFW

Hi and welcome

Well done on taking the first step and posting on here.

From looking at your SOA you've got a tranche of stuff missing:

Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0

These things get spent on I presume so you need to budget for them.


My advice for what its worth is two fold:

1. Keep a spending diary. You will be amazed and what you can learn from writing down what you spend. I use an excel spreadsheet and literally everything we spend gets put on there. We ran up our debt not through being extravagant but the slow and continuous overspending.
2. Work out a budget. Leading on from above its helps you budget. Budget for everything, I mean everything. If it gets spend then budget for it. When I started this journey I thought I'd got a budget but in fact there were huge swathes of stuff I was missing. This was overspending as the gap between our income and outgoings was non existent.

I hope that the above helps. It seems like a mountain to climb but head down, small steps and you'll be amazed at the progress you can make.

Good luck

katsu

Beatle_Ray wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 2157
Partners monthly income after tax....... 1000 can she increase this?
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3157
Monthly Expense Details
Mortgage................................ 465
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 115
Electricity............................. 34 I spend less than this on 2 adults both out at work. Start turning things off, not leaving them on standby all night, energy saving bulbs etc.
Gas..................................... 113 are you paying arrears? If not this is horrendous. Check you now have the heating off, only heat water as much as you need, not all day etc.
Oil..................................... 0
Water rates............................. 74 if this is unmetered, get a meter. I spend less than 1/3 of what you do for two adults with a washing machine and use of shower not bath.
Telephone (land line)................... 30 this should be reduceable.
Mobile phone............................ 50
TV Licence.............................. 23 This is wrong. TV license is ~£12pcm.
Satellite/Cable TV...................... 46.5 get a freeview box?
Internet Services....................... 0 are you including this in your phone cost?
Groceries etc. ......................... 200
Clothing................................ 25
Petrol/diesel........................... 150 what non-essential journeys can you cut out?
Road tax................................ 16
Car Insurance........................... 45
Car maintenance (including MOT)......... 25 are you saving this ready for the bills?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 18.5
Contents insurance...................... 0 incl in buildings?
Life assurance ......................... 23.22
Other insurance......................... 18.5 what is this?
Presents (birthday, christmas etc)...... 0 you need to start budgeting for these as I expect you do buy gifts and have some entertainment etc.
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1471.72

Assets
Cash.................................... 0
House value (Gross)..................... 235000
Shares and bonds........................ 0
Car(s).................................. 6000
Other assets............................ 0
Total Assets............................ 241000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 130000...(465)......0
Total secured & HP debts...... 130000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax........................12600.....265.......0
MBNA...........................8777......166.......0
MINT...........................8000......102.......0
CITI...........................1700......55........0
Nat West.......................4800......102.......0
EGG............................9300......245.......0
Barclaycard....................5555......100.......0
Total unsecured debts..........50732.....1035......-

Monthly Budget Summary
Total monthly income.................... 3,157
Expenses (including HP & secured debts). 1,471.72
Available for debt repayments........... 1,685.28
Monthly UNsecured debt repayments....... 1,035
Amount left after debt repayments....... 650.28
Personal Balance Sheet Summary
Total assets (things you own)........... 241,000
Total HP & Secured debt................. -130,000
Total Unsecured debt.................... -50,732
Net Assets.............................. 60,268
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.
Hope i did this correctly, this is to the best of my knowledge, must point out that mine is a company car so the monthly running costs are down to the company and the petrol of course, i added the RAC cover onto the cost of the wifes maintenance costs although with us both having Hyundai cards with a five year warranty on each it might make sense to change to green flag recovery on both cars,

Thanks

Beatle Ray

Ray, some advice on where you can reduce above, but you need to get the spending diaries going/get your bank statements for the last few months and work out if you are spending the whole £650 apparent surplus.

Take some time and look at Martin's articles for ways to save more. I use Autoaid instead of RAC etc. It costs £37pa so is far cheaper. It is an insurance policy so you pay the repair costs and reclaim them like expenses. Have a look at that or the other Boncaster cover, or the other options Martin suggests.

All insurances need you to compare the market and see what deals you can get before you buy - then use a cashback site like Quidco to actually buy the insurance.

All the best.