First debt free wannabee post - SOA

barefootlinzi

Hi everyone,

I am 26, a SAHM to my 2 wonderful boys, aged 3 and 1. My Husband is a police officer and we are debt free wannabees

We have a bank loan with Nationwide (£17,000 apr 14.9%) and a credit card with tesco (£2,800 0% till may 2011). We are paying off the loan as fast as we can because we want to clear it asap so we can try to get on the housing ladder. The credit card helped us pay for our wedding in august. We recently upped the loan by £3,000 because my husband's parents needed £3,000 urgently and could not get a loan themselves, they are susposed to be paying us at least £250 a month until their portion is paid off. We were going to use this payment to pay off our credit card. Unfortuntly, they have been unable to pay so far (we took the loan out 2 months ago) and are not going to be able to begin to pay until after xmas. This leaves us in a very tight spot, as we have to find the credit card payments ourselves and we just dont have enough incomings!

I just want to add, i currently dont work as we have 2 small kids and it is not worth me working full time as the child care would eat up most of my earnings. part time is also difficult as my hubby works irregular unsociable hours so is it difficult to plan around it. i am about to set up a small craft business so i can work from home, but this may take time to get established.

so, here are the gruesome details....

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.................... 1
Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1562.27
Benefits................................ 314.8
Other income............................ 0
Total monthly income.................... 1877.07
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 650
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 62.5
Gas..................................... 62.5
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 0
Satellite/Cable TV...................... 75
Internet Services....................... 0
Groceries etc. ......................... 250
Clothing................................ 0
Petrol/diesel........................... 200
Road tax................................ 10.42
Car Insurance........................... 31.09
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 10
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1431.51

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 2500

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Bank loan......................17000.....385.2.....14.9
credit card....................2800......86........0
Total unsecured debts..........19800.....471.2.....-

Monthly Budget Summary
Total monthly income.................... 1,877.07
Expenses (including HP & secured debts). 1,431.51
Available for debt repayments........... 445.56
Monthly UNsecured debt repayments....... 471.2
Amount short for making debt repayments. -25.64
Personal Balance Sheet Summary
Total assets (things you own)........... 2,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,800
Net Assets.............................. -17,300

We want to get debt free asap, ts a hole we have got into and badly want to get out of.

Linzi

barefootlinzi

oh, forgot my overdraft, currently sitting at -£436.43 I have been in it for so long that i forgot to put it on my soa. i am haveing an ebay-a-thon and all the proceeds are going towards paying it off. unfortunatly, i dont have £400 odd worth of stuff to sell, but every little helps

tealady

Hi The first thing that jumps out at me is £75 for cable TV. I would be ringing round for a better deal or to cut the packages. I would bet you have channels that you are paying for that you never (or hardly ever) watch.
Also I would keep a spending diary so you can see where the money is really going.
Check to see if you are getting the best deals on gas and electricity and if not switch via a cash back website.
HTH

Pooky

Are you entitled to any housing and council tax benefit at all? Always worth checking.

JoS1972

Hi I have also noticed thatyou don't have anything in for council tax.

Dabooka

I also think you need to review it, nothing for haircuts? Absolutley nothing on entertainment? Water rates (is that in with the rent I assume?) and £200 on petrol or diesel seems high. Agree with the need for a spending diary.

Pollycat

Dabooka wrote: »

I also think you need to review it, nothing for haircuts? Absolutley nothing on entertainment? Water rates (is that in with the rent I assume?) and £200 on petrol or diesel seems high. Agree with the need for a spending diary.

barefootlinzi, I agree with Dabooka.
There does seem to be things that you would expect most people to have spends against that you haven't.

In addition to the ones mentioned above:
TV licence
Do you not have a land line?
Is your internet included in the £75 for Sky?

I'd have a think about these things and re-do your SOA.

Regards

Barricade

barefootlinzi 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.................... 1
Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1562.27
Benefits................................ 314.8
Other income............................ 0
Total monthly income.................... 1877.07
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 650
Management charge (leasehold property).. 0
Council tax............................. 0 - is this correct?
Electricity............................. 62.5 - see if these can be combined
Gas..................................... 62.5 - see if these can be combined
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 50 - this is rather high. Change to Pay & Go?
TV Licence.............................. 0 - You dont pay TV license?
Satellite/Cable TV...................... 75 - Exceptionally high! reduce it down.
Internet Services....................... 0
Groceries etc. ......................... 250 - try to reduce bit by bit. Plan meals, rather than just browsing and buying.
Clothing................................ 0
Petrol/diesel........................... 200
Road tax................................ 10.42
Car Insurance........................... 31.09
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 10
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1431.51

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 2500

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Bank loan......................17000.....385.2.....14.9
credit card....................2800......86........0
Total unsecured debts..........19800.....471.2.....-

Monthly Budget Summary
Total monthly income.................... 1,877.07
Expenses (including HP & secured debts). 1,431.51
Available for debt repayments........... 445.56
Monthly UNsecured debt repayments....... 471.2
Amount short for making debt repayments. -25.64
Personal Balance Sheet Summary
Total assets (things you own)........... 2,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,800
Net Assets.............................. -17,300

My 2p's worth. I can see how you've cut down already and well done on getting the credit card at 0%.

Since your husband is a police officer, see if there is anything that can be done using Police Mutual - insurance etc.
I'm a former police officer, and I used to get my insurance cheap and chips from them!

Every little helps!

Tixy

Hi linzi and welcome

I've made a few comments on your SoA below.

barefootlinzi wrote: »

so, here are the gruesome details....

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.................... 1
Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1562.27
Benefits................................ 314.8 are you getting all you can? do you get tax credits? council tax benefit? check out entitledto.co.uk to see if you can.
Other income............................ 0
Total monthly income.................... 1877.07
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 650 is this a competative price for your area?
Management charge (leasehold property).. 0
Council tax............................. 0 do you not pay this? or is it part of the rent?
Electricity............................. 62.5 Gas & elec look pretty high, do you have any arrears? if not then worth shopping around to see if you can find a cheaper supplier or tariff to save a bit here. Also try reducing your usage anywhere you can, eg don't heat empty rooms, reduce usage of elec hungry appliances like tumble driers, elec heaters etc. If you have an immersion heater on your water make sure this is only on for a couple of hours a day. Switch off everything not in use.
Gas..................................... 62.5
Oil..................................... 0
Water rates............................. 0 do you not pay this?
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 0 ?
Satellite/Cable TV...................... 75 look for a cheaper package here, there are deals for phone internet & tv for around £50, or if you choose to switch to freeview you can get landline & internet for less than £25.
Internet Services....................... 0
Groceries etc. ......................... 250
Clothing................................ 0 is this realistic
Petrol/diesel........................... 200 this seems very high - are all journeys essential? does OH have a long commute?
Road tax................................ 10.42
Car Insurance........................... 31.09
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 10
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 I would consider this - you can get basic contents cover for just a few pounds a month (especially if you use cashback sites).
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 probably need to budget something here
Haircuts................................ 0 and here
Entertainment........................... 0 and a small amount here
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1431.51

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 2500

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Bank loan......................17000.....385.2.....14.9 is this repayment the full amount (incl OHs parents share)?
credit card....................2800......86........0
Total unsecured debts..........19800.....471.2.....-

Monthly Budget Summary
Total monthly income.................... 1,877.07
Expenses (including HP & secured debts). 1,431.51
Available for debt repayments........... 445.56
Monthly UNsecured debt repayments....... 471.2
Amount short for making debt repayments. -25.64
Personal Balance Sheet Summary
Total assets (things you own)........... 2,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,800
Net Assets.............................. -17,300

We want to get debt free asap, ts a hole we have got into and badly want to get out of.

Linzi

Whilst the shortfall of £25 doesn't look too bad like others have said it looks like some costs are missing.
Although it also looks like once you are being paid that £250 a month you should be able to manage reasonably alright. Can you ask them again if they could manage to pay anything towards their debt to you - even if it was only £100 until after xmas that would still help a huge amount. Even if his parents have to sell off things they not longer need / use or cut back on their spending at xmas etc I would really try to force the point that they are leaving you unable to cope.
I know they are family but do you have any form of written agreement with them? Are you certain that they can and will start to repay in the new year? As you are paying interest on the loan I assume you will also be charging them interest on the £3k?

Is OH able to do any overtime to increase his income for the next couple of months?

Good luck with setting up your business. There are quite a number of 'crafty' type people on this forum who I'm sure would be pleased to offer advice and support. And their are people who can help advise with setting up and running a business etc.

Triggles

I agree that there are some things to look at:

- tv licence (a MUST if you are using a TV)

- contents insurance (you can get this quite cheaply if you look around, plus consider using a cash-back site like Quidco as well!)

- life insurance (some people think this is unnecessary, but when you have children, especially if you are a SAHM like me, I think this is quite important - term insurance is not very expensive at all! again, look around, consider using a cash-back site)

- dental/medical (even including over-the-counter stuff for the children - seems like we're ALWAYS stocking up on Calpol with our 1yo who is teething constantly!!)

- water rates (are these included in your rent?)

- council tax (again, included in rent??)

- landline/internet (I saw you had £75 for satellite, so figured you might have this all in a package??)

- petrol (is this all for necessary travel? just commuting for work? are there other work options, such as biking?)

- clothing (I know for adults that you can get by with very little for clothing, but with growing children sometimes you have no choice, although there are options to get clothing cheaply - still, look back over the last year, and project over the next year - if you have a 3yo, depending on their birthday, they may be starting school next year, which means paying for uniforms - budget an average for the year over each month - if you don't use it, pop it in savings earmarked for clothing, and it'll be there when you need it!)

- other child related expenses (what are these? is it something that can be done for free? )

- presents (birthdays and christmas with children almost always involve gifts and expenses - you can be realistic but frugal - you have small children, so you can easily keep the gift expenses down without worrying too much! again - budget for it in advance so you're not caught scrambling at the last minute!)

- haircuts (unless you're doing it yourself at home, this should be at least an occasional expense to budget in)

- entertainment (you're still allowed to have a little bit of a life, even if it's £10 per month for a small treat for the children and a bottle of wine to share for you and your DH)

- emergency fund (again, even if you're only putting £20 per month - it can add up quickly! and those white goods always have a habit of breaking down when you least can afford it - it's happened to lots of us!)

Think about preparing for winter now as well - check the OS board for good ideas to keep heating bills down.

As far as the groceries are concerned, you may be able to whittle it down a bit more. Just some suggestions (if they apply):

- buy basics/value items (depending on where you shop obviously) whenever possible!! we use probably 60% basics in our house, and really haven't noticed any decrease in the quality of food.

- watch sales - we try to stock up on nappies (store brand at Sains are quite good!!) when they are on sale as Sains regularly has baby stuff at 1/3 off. Also get meat when it's on sale and pop it in freezer

- check local stores to you and see where certain items are cheaper - for example, our local Farm Foods has milk, bread, loo roll, and sugar much much cheaper than the other supermarkets in the area. So we always buy them there. We spend about £7 per week on bread, milk, and loo roll there, whereas if we bought them at the supermarket it would cost us about £14 per week. That's a savings of £7 per week or £28 per month - it all adds up!!

- think about incorporating a "cheap night" or "veggie night" into your mealplanning. We tend to have one per week - beans on toast with cheese shredded on it, eggs and toast, anything cheap and easy that we can all eat.

-We also try to make 2 meals out of some meats - for example right now I'm cooking a chicken in the slow cooker. We'll be having curry tonight with it (using 9p per jar basics curry sauce - very good!!!), there'll be chicken soup with dumplings tomorrow (using carcass for stock), chicken and mushroom pie (with some of the leftover meat), plus sandwiches over the next couple days. We can put some of the meat in containers in the freezer and use it later. Buying a whole chicken will give you more options to use it (referred to as rubber chicken on MSE), as opposed to chicken fillets which are more expensive.

- Use less and bulk up with veg or oats when you can. We only use half a small package of mince when making spag bol, chili, and similar meals. We can add veg such as onions, mushrooms, peppers, carrots, as well as oats to bulk it up a bit and make the meat go that small bit further. It tastes better, too! (well, IMO)

- check out the OS board for tons of ideas and recipes!!!

Best of luck! (whew! Sorry so long!!!)

ETA - oh, and I do think that you should be speaking to his parents and simply tell them they are placing you in a very uncomfortable position by not paying and you need to come to an agreement so that they are maybe paying you half now or even £50-£100 per month NOW, and then moving to paying the full £250 on an agreed upon date. I hesitate to say get it in writing, as we all know that gets difficult in family situations - the time to do that was probably before you took out the additional money, so water under the bridge now. Family and money can be a tricky mix! Been there!!

bargainbetty

I have to agree with Tixy - you need to get in touch with your in-laws and ask them to start making some level of payment, even if it is not the full amount per month. You must have a written statement of the total owed, including interest, and mark each payment off showing a running balance - there are fewer arguments that way.

You agreed to help them out of a hole, not put yourselves into one. Agree with them to a minimum spend Xmas (get other family involved too) to help reduce their expendiure, and get them to start on at least a nominal payment per month.

Good luck x