Taking Control Before it controls us (SOA Included)

heavensbug

Ok.

Hello all.

Been a poster on here for a while but not DFW.

A bit of history. Today I logged onto my CC and realised I was close to my limit. No problem. I'll get a payment off tonight I thought.

I logged onto my cc account 8 hours later to find it locked. Fuming I called services and was told it was because I was over my limit.

Interest payment has gone on and pushed me over my limit. Made payment on phone so fingers crossed I won't be charged for that. So I sat the wife down and spoke to her and in the last 6 months debts have started to increase.

Light bulb moment. Lets get this sorted.

So we have done an SOA which I will attache below.

We have already tonight managed to cover £1000 to clear my wife's Overdraft. Mine has been reduced from £1200 to £300.

So we are chuffed with that. But......

Doing the SOA has made us realised that between us we are frittering away nearly £1000 a month on Junk.

So SOA and DFW here we come.

Our Targets -

1) Pay off Credit Cards
2) Pay off Loans
3) Pay off Bulk if not all of Mortgage
4) Buy our holiday home in the sun.

Its a long way to go but 13th July 2010 signifies the rest of our lives

SOA
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................ 1760
Partners monthly income after tax....... 1500
Benefits................................ 75
Other income............................ 0
Total monthly income.................... 3335
Monthly Expense Details
Mortgage................................ 810
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 130
Electricity............................. 76
Gas..................................... 76
Oil..................................... 0
Water rates............................. 43.83
Telephone (land line)................... 32
Mobile phone............................ 75
TV Licence.............................. 13
Satellite/Cable TV...................... 50
Internet Services....................... 0
Groceries etc. ......................... 500
Clothing................................ 50
Petrol/diesel........................... 210
Road tax................................ 25
Car Insurance........................... 85
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 16.5
Contents insurance...................... 16.5
Life assurance ......................... 53
Other insurance......................... 131
Presents (birthday, christmas etc)...... 75
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 50
Emergency fund.......................... 25
Private Health Care..................... 32
Take Aways.............................. 50
Lunch................................... 300
Payments To Savings..................... 100
Childrens Swimming...................... 77
Total monthly expenses.................. 3206.83

Assets
Cash.................................... 12500
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 9000
Other assets............................ 0
Total Assets............................ 221500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 132000...(810)......5.44
Total secured & HP debts...... 132000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco Credit Card S............3723.32...70........16.9
Virgin Credit Card.............2277......35.08.....16.9
Car Loan.......................7560......210.......6.2
Overdraft......................300.......0.........0
Student Loan...................5000......100.......0
Tesco Credit Card H............3100......70........16.9
Total unsecured debts..........21960.32..485.08....-

Monthly Budget Summary
Total monthly income.................... 3,335
Expenses (including HP & secured debts). 3,206.83
Available for debt repayments........... 128.17
Monthly UNsecured debt repayments....... 485.08
Amount short for making debt repayments. -356.91
Personal Balance Sheet Summary
Total assets (things you own)........... 221,500
Total HP & Secured debt................. -132,000
Total Unsecured debt.................... -21,960.32
Net Assets.............................. 67,539.68

So now to work out where the junk can be left in the shop/takeaways and use that money to keep it in our pocket and not someone elses

WASHER

heavensbug wrote: »

SOA
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................ 1760
Partners monthly income after tax....... 1500
Benefits................................ 75 - Child benefit for two children is more than this - how old are the children?
Other income............................ 0
Total monthly income.................... 3335
Monthly Expense Details
Mortgage................................ 810
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 130
Electricity............................. 76 - very high
Gas..................................... 76 - very high
Oil..................................... 0
Water rates............................. 43.83
Telephone (land line)................... 32 - high
Mobile phone............................ 75 - very high
TV Licence.............................. 13
Satellite/Cable TV...................... 50 -:eek: got to get rid of
Internet Services....................... 0
Groceries etc. ......................... 500 - you could lower this by £100 easily
Clothing................................ 50 - every month?
Petrol/diesel........................... 210
Road tax................................ 25
Car Insurance........................... 85 - very high
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 16.5
Contents insurance...................... 16.5
Life assurance ......................... 53 - Do you not get life insurance from work?
Other insurance......................... 131 - whats this?
Presents (birthday, christmas etc)...... 75 - too much
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 50 - you cannot afford one
Emergency fund.......................... 25 - this is your emergency
Private Health Care..................... 32 - what is this for? Dental?
Take Aways.............................. 50 - stop this immediately
Lunch................................... 300:eek:got to stop today
Payments To Savings..................... 100
Childrens Swimming...................... 77 - A month? that is alot
Total monthly expenses.................. 3206.83

Assets
Cash.................................... 12500
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 9000
Other assets............................ 0
Total Assets............................ 221500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 132000...(810)......5.44
Total secured & HP debts...... 132000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco Credit Card S............3723.32...70........16.9
Virgin Credit Card.............2277......35.08.....16.9
Car Loan.......................7560......210.......6.2
Overdraft......................300.......0.........0
Student Loan...................5000......100.......0
Tesco Credit Card H............3100......70........16.9
Total unsecured debts..........21960.32..485.08....-

Monthly Budget Summary
Total monthly income.................... 3,335
Expenses (including HP & secured debts). 3,206.83
Available for debt repayments........... 128.17
Monthly UNsecured debt repayments....... 485.08
Amount short for making debt repayments. -356.91
Personal Balance Sheet Summary
Total assets (things you own)........... 221,500
Total HP & Secured debt................. -132,000
Total Unsecured debt.................... -21,960.32
Net Assets.............................. 67,539.68

So now to work out where the junk can be left in the shop/takeaways and use that money to keep it in our pocket and not someone elses

I have added comments in above, I can see at least £500 per month savings each month, without touching the clothing, petrol, entertainment etc. You are in a good position to repay the debt without it impacting on your life too much, but a word of warning, to pay off the debt as soon as possible, you never know if you or your OH will lose your jobs, then it will impact heavily.

WASHER.x.

LillythePink

I know that we need to cut back on groceries, but how can you be spending 500 pm on groceries, 50 on take aways AND 300 on lunches????

What are these lunches - why can't you make them at home and take them in - we always have home made lunches for OH, DD and myself if not, we would be spending out about your 300 as well!

Foundational

Welcome to DFW! Just want to say welcome and endorse Washer's advice. That's a lot to spend on lunches, and groceries can easily be cut back by being more discerning, dropping to supermarket's own brand etc.

Another thought - your credit cards all have similar amounts owing and the same interest rates - perfectly positioned for pahying the minimum on 2 of them whilst paying down the other 1, and seeing this go down, interest reducing and getting the boost of paying this one off and getting rid. This building of momentum, and hanging on to the resolve and drive you have got today, is so important.

Best wishes to you, folks.

Foundational

WASHER

Another thought, How is your credit rating? Could you get a 0% card and transfer the balance from the highest over?

heavensbug

Thanks Washer

I can justify a bit of it but I know there are savings there which you are being truthful about

First thing to say is we have twin 3 yr old girls.

Clothing and holiday allowance is clothing for them and fuel/food/hotels to take them to see grand parents who can't/won't travel or put us up.

We will cut back on those so a saving can be made.

The £75 child benefit is DLA as eldest twin has Cerebral Palsey. Other than that we don't get anything to my knowledge. Maybe we are missing out on assistance we could be getting.

The electricity and gas is high. Time to address it.

Telephone inc Broadband which I am using to get formal qualifications to be able to increase my yearly salary by 10-15k. Once that is done we can cut it back.

Mobile phones is one for me and the wife and we are tied for 12 months so not much we can do about that for the moment.

Satellite/Cable is a luxury but we will cut back on that

Car insurance unfortunatly due to speeding fines/accidents there is not a huge deal we can do with this but come renewal it will be dealt with as best as possible. (6 months away)

Life assurance is to cover the mortgage. May be able to review this as we may be over insured if you can be.

Other insurance is redundancy cover. Unfortunatly both mine and the wife's jobs are in the balance at the moment and this will pay 100% of the mortgage. So if the worst does happen atleast we keep a roof over out head. Maybe we can find someone cheaper. It also includes sky cover at £10 a month. Time to get rid of I think.

Presents - Twins. But could be reduced.

Private health care - This was cover I took out with my company to cover my daughters. We would have had to wait 2 years for the eldest to be diagnosed on the NHS. So we took it to cover MRI's etc and get her treated. Once the min term is up this can be cancelled. Another 4 months time.

Take aways and lunch. Yes enough said. This is stopping now.

Childrens swimming is private lessons which is held at a Hydro pool at a school for disabled and helps with DD's Cerebral palsey so if one thing is kept this is the only thing I will not sacrifice.

[Notes for me tomorrow]

1) Reduce holiday & clothes expenditure
2) Electricity/Gas is high
3) Cut back on Satellite
4) Groceries need to be reviewed.
5) Check life assurance policies
6) Investigate redundancy cover
7) Cancel Sky cover
8) Time to make mine and the wife's own sandwhichs

Ok I may be being a bit obstructive at the moment and I will have to be more ruthless.

Please give me your thoughts on if I am being too lenient on the savings I can make or not.

I know there will need to be sacrifices just want to keep it balanced with a good home life

heavensbug

LillythePink wrote: »

I know that we need to cut back on groceries, but how can you be spending 500 pm on groceries, 50 on take aways AND 300 on lunches????

What are these lunches - why can't you make them at home and take them in - we always have home made lunches for OH, DD and myself if not, we would be spending out about your 300 as well!

Lazy.

That is the first thing we are dealing with.

0% balance transfers is the next thing once we have looked at any extra cash we have around to reduce those balances further. Thats the task for tomorrow night.

Foundational

Regarding paying the credit cards off, some good advice from Clapton on the Credit Card board:

"pay off the debt with the highest APR first although pay a little more than the minimum on the others as many companies are now recording minimum payments on credit records (which can make it look as if your are struggling) "

Do concentrate on one card at a time (usually highest APR but yours seem to be on a par) but maybe pay £10 above the minimum on the others to avoid the problem referred to above.

WASHER

Thank you for your long and informative post.

You should be receiving child allowance for the twins, in the region of £135 every 4 weeks. You can edit your SOA and add this in by clicking on the blue button at the bottom of post 1.

Swimming must stay, you have cleared that expense up.

Who is your mobile with? How long have you been in contract for, the reason I ask, is because if you are with certain providers like o2, after 9 months they will let you drop a tariff, every little does help.

On the present front for the twins, £75 per month is far far too much, considering they are young, children need our time not loads of gifts, time to cut back. I spend £100 each on my children at Christmas, and no more than £20 on a birthday gift, and they are approaching teenage years and they don't hate me for it (yet!).


Your Life assurance for the mortgage seems really high, you need to look at this, DO NOT CANCEL IT UNDER ANY CIRCUMSTANCES, insurance in my opinion is far far more important than Sky or a mobile phone contract, but I'm sure you can save money on that, is it with your mortgage provider currently?

ERICS_MUM

heavensbug wrote: »

Thanks Washer

I can justify a bit of it but I know there are savings there which you are being truthful about ............Ok I may be being a bit obstructive at the moment and I will have to be more ruthless.

Please give me your thoughts on if I am being too lenient on the savings I can make or not.

I know there will need to be sacrifices just want to keep it balanced with a good home life

Personally I would focus on the food bills, lunch costs and take aways for a couple of months and see what an impact that will have. I reckon you could save £300 / £400 a month pretty quickly. Once that becomes a routine (do not let it slide back) then start looking at the other things we've highlighted. Take care before cutting back any insurances that are covering you against major "life issues" such as redundancy, mortgage and your daughter's health.

Ideally you want to arrive at a compromise that you can sustain long term without making your lives uncomfortable.

Good luck and let us know how you are getting on.

Linda xx

Jacey53

Am I misreading this or do you have £12.5K saved?

If so, use this to pay the high interest credit cards as you cannot be getting this rate of return on your savings.

Once you have paid what you owe, you can start saving again with what you save on lunches CC payments etc without throwing money down the drain on interest.