Newbie needs advice

jdh3

Hi everyone, spent hours reading posts on here and finally thought its my turn.

I have had a tough 5 years seeing my finances go from plus £20,000 to minus £30,000 in the form of various debts: £13,000 left on a £20,000 loan, over £10,000 remaining on various credit cards £2,000 overdrawn and a £97,000 mortgage.

I had to sell my own business after a costly divorce and things have slowly got worse since then.

Although my new OH and I are both fortunate enough to now have well paid secure jobs we cant seem to get anywhere with regards to sorting out our finances, its become so bad now that we have to borrow from the kids piggy banks for the last few days of the month and our credit rating is so bad we cant even open a new bank account or get a 0% interest credit card and we have tried to consolidate everything by remortgaging but that was also rejected. If we could get these sorted we could start solving the financial problems ourselves.

Both our cars are on their last legs and financially so are we! I want to resolve our finances myself and get myself back into business as I am full of money making ideas, but am so bogged down with debt I cant get any of them off the ground. I have also run out of decent stuff to sell on ebay or at car boots and cant afford to buy stuff to sell on for a profit.

Anybody any ideas or advice?

Sorry if I've bored everyone with my story, I know there are many of us in the same situation and I feel for you too.

I know one day I will be debt free as I am determined to sort this mess out myself, just cant see that far ahead! We want to be able to enjoy life with the kids before they are too old!

Thanks for reading,
Jamie.

*zippy*

Evening Jamie, welcome to mse and well done for posting, people will be along shortly with advice, I think the first step that would help people is if you are able to fill in a SOA, you can do one here and post it up for the regulars to have a look at

http://www.makesenseofcards.com/soacalc.html

Having the support on here makes a huge difference so i'm sure writing it out will help getting a plan together, good luck x

jdh3

Thanks for that, I'm on to it now!

jdh3

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 1000
Benefits................................ 0
Other income............................ 200
Total monthly income.................... 2600
Monthly Expense Details
Mortgage................................ 565
Secured/HP loan repayments.............. 343
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 105
Electricity............................. 85
Gas..................................... 65
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 15
Mobile phone............................ 50
TV Licence.............................. 11
Satellite/Cable TV...................... 15
Internet Services....................... 15
Groceries etc. ......................... 500
Clothing................................ 10
Petrol/diesel........................... 100
Road tax................................ 10
Car Insurance........................... 60
Car maintenance (including MOT)......... 50
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..................... 25
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 20
Entertainment........................... 10
Holiday................................. 0
Emergency fund.......................... 0
Overdraft fee........................... 30
Child maintenance....................... 166
Total monthly expenses.................. 2290

Assets
Cash.................................... 0
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 101000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 97000....(565)......4.05
Secured Debt.................. 12000....(307)......7.9
Hire Purchase (HP) debt ...... 550......(36).......29.9
Total secured & HP debts...... 109550....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................4000......90........24.9
Credit Card....................3000......75........25.9
Credit card....................3000......75........25.9
Next account...................400.......40........25.9
Credit Card....................1000......25........25.9
Total unsecured debts..........11400.....305.......-

Monthly Budget Summary
Total monthly income.................... 2,600
Expenses (including HP & secured debts). 2,290
Available for debt repayments........... 310
Monthly UNsecured debt repayments....... 305
Amount left after debt repayments....... 5
Personal Balance Sheet Summary
Total assets (things you own)........... 101,000
Total HP & Secured debt................. -109,550
Total Unsecured debt.................... -11,400
Net Assets.............................. -19,950
Created using the SOA calculator
Reproduced on Moneysavingexpert with permission, using IE browser.

*zippy*

Jamie hope that has helped, are you feeding the two children full-time? I think you can make some big savings on food, i've just started using this website to bring my food bills down, even cooking a few cheap meals a week will help.

http://www.cheap-family-recipes.org.uk/index.html

The other things that stand out are the mobile & electricity, are you paying arrears on the electric?

jdh3

Hi,

£500 a month is to feed 2 adults and 2 kids including packed lunches for school and work, trying to eat healthy too so lots of fresh fruit and veg seems to add up quickly, no real luxuries though! £500 also includes toiletries, cleaning products etc. Will look at trying to reduce this.

£50 per month on mobile phone is for 2 phones, £25 each for me and partner.

No arrears on electric, may have got gas and electric mixed up on the form, I'll go check my bills.

Thanks for cheap food link, made me hungry already!

*zippy*

I've only just started this week following the cheaper family meals website, but it aims to feed a family healthily for £100, for me that would free up alot of money, which is a huge incentive

Have you had a look at the old style board too there are lots of tips there for reducing your food bills and cleaning products.

http://forums.moneysavingexpert.com/forumdisplay.php?f=33

Have you checked the comparison sites recently that you are getting the best deals for gas and electric. Martin has articles at the top of the page you can click on.

I'm sure lots of peeps more experienced that I am will offer some more advice tomorrow...I have to hit the sack so good night, i'll pop in tomorrow to see how you are getting on x

mum2one

jdh3 wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 1000
Benefits................................ 0
Other income............................ 200
Total monthly income.................... 2600
Monthly Expense Details
Mortgage................................ 565 - could you remortgage and get a lower rate, or look at an interest only for ashort period
Secured/HP loan repayments.............. 343 - sorry to ask but how much longer have you got this payment going out for?
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 105 -could you ask if you can pay over 12 months not 10, same sum, but knocks a bit off each month
Electricity............................. 85 - very high, are you on prepay / meter / arrears - need to look at cutting back, baby steps such as lights off, don't leave on standy, do you really need the clock on display on the microwave. If charging phones, laptops etc I find by putting them on charge in the room that I'm in, more inclined not to leave them on all night, - if you have quarterly bills check your meter readings and ring them in and ask for a new bill. Our last bill was estimated and came in at £199, checked the meter, lot less rang them, and the new bill was £120........
Gas..................................... 65 - again high, ditto as above meter etc, baby steps, check not cooking on too high gas, alter the thermostat 1degree, cut 5 mins of the central heating, little differences you won't notice, but will reduce the bill,
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 15
Mobile phone............................ 50 -Is that contract and one or 2 phones ? if contract look at asking to be reduced, when out of contract look at sim only, esp if you make a fair wack of calls, or pay and go, shop around for offers
TV Licence.............................. 11
Satellite/Cable TV...................... 15 - I know its only £15, but is a luxury at mo, can you look into cancelling the contract, even without asubscription your still get quite a few channels
Internet Services....................... 15 - may be worth seeing if you can get this cheaper, i pay £7 per month, inc local and national calls
Groceries etc. ......................... 500 - thats high, considering your both working, look at downgrading brand, meal planning, old style boards for advice on meal planning
Clothing................................ 10
Petrol/diesel........................... 100 - I appriciate thats for 2 cars, but could you reduce some of the journeys
Road tax................................ 10
Car Insurance........................... 60 -again I know its 2 cars, but try shopping around - I would recommend using cashback sites such as Quidco, check your mileage, as that can affect your policy, its usually in 2,000 incrediments, if you could check your last 2 MOTs, give u an idea of mileage, mines low milegae, I drive less that 6000 miles a year, helps my insurance.
Car maintenance (including MOT)......... 50
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..................... 25 - def shop around at renewal, is it joint with your contents cover?
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 20
Entertainment........................... 10
Holiday................................. 0
Emergency fund.......................... 0
Overdraft fee........................... 30- if there any way you can reduce this charge
Child maintenance....................... 166 -thats fixed
Total monthly expenses.................. 2290

Assets
Cash.................................... 0
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 101000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 97000....(565)......4.05
Secured Debt.................. 12000....(307)......7.9
Hire Purchase (HP) debt ...... 550......(36).......29.9 - at a rough extimate theres 15months left on that, just based on 36per month, from the £550
Total secured & HP debts...... 109550....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................4000......90........24.9
Credit Card....................3000......75........25.9
Credit card....................3000......75........25.9
Next account...................400.......40........25.9
Credit Card....................1000......25........25.9
Total unsecured debts..........11400.....305.......-

Your credit cards your on the higher apr rates, is there any of the cards with space that you can do a balance transfer on. even if it takes out the £400 debt, it all helps.

If the cards are at bursting point, look at doing a snowball on them (find the link in a min), what you do is put each card in as name or debt 1, the apr, the min % the card wants, eg 2.5%, and then the amount you can pay in total, going by your SOA, at mo is 305, put this sum in, u then have 2 choices, either smallest balance first or the highest apr, if you choose the smallest balance, it takes longer, but its a good device as it sets the payments, calculates your est interest and also setsout your payment plan.

Monthly Budget Summary
Total monthly income.................... 2,600
Expenses (including HP & secured debts). 2,290
Available for debt repayments........... 310
Monthly UNsecured debt repayments....... 305
Amount left after debt repayments....... 5
Personal Balance Sheet Summary
Total assets (things you own)........... 101,000
Total HP & Secured debt................. -109,550
Total Unsecured debt.................... -11,400
Net Assets.............................. -19,950
Created using the SOA calculator
Reproduced on Moneysavingexpert with permission, using IE browser.

Hi

I've tried to be as gentle as I can with theSOA, have just put my thoughts and suggestions by some of them.

x

jdh3

Already looking forward to getting more advice and info.

Thanks for your help, goodnight.

mum2one

The link for snowball for the cards

http://www.whatsthecost.com/snowball.aspx

xx

jdh3

Hi mum2one thanks for your reply,

- Mortgage £565 - Tried to remortgage, keep getting turned down. Went interest only for 12 months while partner was on maternity, both changed jobs recently so went back to paying full amount, not sure if we could go back to paying interest only.

- Secured loan - 4 years to go now

- Council tax - Wasn't aware you could pay over 12 months instead of 10, I'll definatly look into that, thanks.

- Gas/electric - Something else I need to sort, thanks for advice

- Satellite/broadband/line rental - all with sky £40-£45 per month. Had this conversation with my partner so many times. Wouldn't even have a TV if it was up to me. Especially in the bedroom!!

- Mobile phones - £50 - 2 phones on contract £25 each p.m

- Cars/petrol - 2 knackered old cars, high mantenance, expensive run. Petrol might even be an underestimate. I have to travel 340mile round trip once every other week.

- Overdraft fee - Only way to get rid of this is to get rid of my £2000 overdraft which I'm always upto at least once a month.

- Credit cards - Partners best friend, my worst enemy! Most are in her name and she has screwed up her credit rating, apr's have gone up, credit limit has gone down, all cards are at their max now, no chance of transferring balance, cant get more cards with 0.0% on transfers. I will look at snowballing though.

Thanks again, I will get there one day! (Hopefully)