Debt Problems.....owning up!

Hannah_10

It just so happens SOA's where people are above thier means are a favourite of mine, I do like a challenge. Right so first things first, what are we lookind for... Well that £66 you're over by for one, and then as much as we can find to make snowballing a viability (being realistic, you'd want a minimum of further £300 to consider snowballing 11k), so I'm looking for £366...

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1546
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1546
Monthly Expense Details
Mortgage................................ 623
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 50
Council tax............................. 100
Electricity............................. 20
Gas..................................... 20
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 20 << Impressive without a landline.
TV Licence.............................. 11
Satellite/Cable TV...................... 0
Internet Services....................... 20 << This can be done on a tenner, so that's a tenner found.
Groceries etc. ......................... 200 << £200 is high yes, but it's also within the amounts the CCCS say you can go up to. I think £120 for a single person is realistic, so there's £80 found
Clothing................................ 0
Petrol/diesel........................... 150 << Can this come down at all? Maybe by parking further from work or walking anywhere under 2 miles. I'm gonna say a cautious £25 saved here. (Now I have seen the tax band I am going to say make that £35 saved, your car wont be fuel efficient if it's in a tax band of J or K.)
Road tax................................ 20 << This is one of the higher tax bands, for a more sensible car you'd be paying £11, saved £9 here.
Car Insurance........................... 28 << This is pretty good, but with a more realistic car it will drop, lets say it dropped £5
Car maintenance (including MOT)......... 0 << Oh dear, I think there should be something here. I am going to put £6 in here for you.
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..................... 0
Contents insurance...................... 6 << Well done.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 << Be tighter, take this down to £15
Haircuts................................ 20 << We can "shave" this one down to £10 too (bad pun).
Entertainment........................... 50 << Zero this
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1358
Total monthly expenses after being axed by Hannah = £1506 (this is still only a difference of £148, less than half of of the £366 I would like to have found)

Assets
Cash.................................... 0
House value (Gross)..................... 105000
Shares and bonds........................ 0
Car(s).................................. 8000 << This is a posh car, I wonder how far you can be persuaded to downgrade it. I am going to assume you will go as far as a £2k car, thus freeing up £6k.
Other assets............................ 0
Total Assets............................ 113000
All of a sudden we're not looking at a credit debt of £11,350 it's gone down to £5350, because you've sold the car and used £6k for debts.

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 96000....(623)......0
Total secured & HP debts...... 96000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Santander Car Loan.............8200......229.......0
Virgin Credit Card.............2500......25........0
A&L Overdraft..................650.......0.........0
Total unsecured debts..........11350.....254.......-

Monthly Budget Summary
Total monthly income.................... 1,546
Expenses (including HP & secured debts). 1,358
Available for debt repayments........... 188
Monthly UNsecured debt repayments....... 254
Amount short for making debt repayments. -66
Personal Balance Sheet Summary
Total assets (things you own)........... 113,000
Total HP & Secured debt................. -96,000
Total Unsecured debt.................... -11,350
Net Assets.............................. 5,650

So in the end we only found £66 for your living expenses and another £82 to snowball with.

That means you could well be better off on a DMP because fo the length of time you will be on it, it is more valuable to you to get your interest and charges frozen now than to try to ride it out with no hit on your Credit file.

Debs0778

Thanks Hannah

I can cut back on my grocery shopping, I just need to be firm. I cant cut back internet, it's a laptop and dongle, I'm tied into a contract. Also yes, I do drive a nice car but I still have 8k of finance oweing, I dont actually own it. It's 200 a year to tax, not sure what bracket that is

katsu

If the Boyfriend eats at yours, explain you are a bit stretched financially and ask him to chip in.

Go to the library and borrow some simple cookery books so you can learn how to cook. You will be able to make simple meals like jacket spuds already, so look at what it is you are buying to eat - check the old style boards for cheap meal advice.

katsu

Can you take in a lodger for a while?

What about a temporary second job - Christmas is coming so shops will need extra staff?

Go for the hairdressing college haircut idea - check out your local FE college.

For Christmas - make gifts (a voucher for a night of babysitting, home made chocolate/biscuits when you learn to cook, jewellery or hand sewn gifts etc), use charity shops and sale bargains. Start now. I did 23 people for less than £180 last year. You can def drop your budget unless you have a big family like we do.

HappyMJ

I wouldn't have recommended a DMP. You've borrowed money to buy a nice car and can't pay back the loan so I would suggest you sell the car and pay back the loan. Use public transport and if you "need" a car then get a cheap runabout. The running costs will be higher but you'd be saving £229 a month in unaffordable loan repayments.

When I advise people on motoring costs I try and say to cost your mileage out to the HMRC mileage rate of 40p/mile for the first 10000 then 25p/mile as that is what an employer would give you if you used your own car for work. According to the costs in your SOA and adding a bit for maintenance you'd need to do 15,000 miles per year to get your motoring costs for that rate.

Debs0778

Thanks

I am actutally thinking about selling the car. I bought it when things were a different but to be honest now its just making my life that little bit difficult when it comes to my budget.

I'm actually using public transport some days because I dont have parking at work so when I drive I need to walk a mile anyway - not good on a rainy day!

I've just posted on the motoring thread for ideas on selling, ideally I'd like to use a reputable company along the lines of webuyanycar - although do realise there likely isnt such a beast.

The car will probably fetch around what I owe so selling does look like a sensible option

bargainbetty

Webuyanycar is NOT a reputable company. They will try to reduce the amount they pay you as far as possible, so avoid them.

Look at your finance deal - is it HP or a straight loan? If it is finance/HP there may be restrictions on selling the vehicle. If it is a loan, then you are fine, and can simply look at Autotrader for comparable vehicles and list it for sale privately.

Ensure that the purchaser either pays in cash (use a detector pen on every note) or provides you with a bankers draft/direct transfer into your account. Do not accept a cheque under any circumstances, and get the money before they drive off.

Use the money to buy a little runabout, pay off the debts with the highest interest first, and cut up your credit cards.

Good luck x