Can't decide which is best - some advice please?

d3mon4ngel

Good afternoon everyone,

I've been hanging around here for a while, and I've managed to get most things under control after reading the advice given by the wonderful people on these forums. :cool: The last month has been a bit hairy, but it should settle down again now.

I should have about £150 spare each month from now on, though this might possibly be more but not counting on that. I currently don't have any emergency fund at all, which has been the reason why this month just gone I've had to use my credit card to survive, as well as pushing my overdraft too close to the limit. I do not want to be in that position again.

I was considering paying £100 towards the debts and £50 into a savings account. This savings would then be my emergency buffer (£20), plus it would mean my road tax and house insurance are budgeted for (£30) so that I don't have a big hit again next year like I just did. I also hope to be able to pay my car insurance in full at some point too.

Does this sound like a logical plan? Or would I be better ignoring the road tax/insurance budget for now until I've paid off my credit card and overdraft, which is currently a total of around £1500, then putting extra into savings to "catch up" with the budget? Though by the time I've done that, it will probably be another year gone by and I'll be back in this same position!

Please help a chronically indecisive individual!

anh1904

How about posting a full SOA so that you can get some even more finely tuned advice into what you might want to target? It's not so scarey, and who knows, you might have £250 to spare next month?!

d3mon4ngel

Wow, this is quite scary... it's taken me over an hour to fill in and get "just right" and even now I'm not sure!

The way that me and OH work out the bills, is that he gives me £400 a month towards the household, and we both pay for everything else individually. All the figures in blue are what I would like to budget each month, but it never seems to happen and I just end up paying as it comes.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1176
Partners monthly income after tax....... 400
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1576

Monthly Expense Details
Mortgage................................ 426
Secured/HP loan repayments.............. 101
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 95
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 21
Telephone (land line)................... 0
Mobile phone............................ 20 <- contract up at end of Jan
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 35 (inc landline)
Groceries etc. ......................... 150 <- our newly decided target, may go up to £200
Clothing................................ 10
Petrol/diesel........................... 50
Road tax................................ 15
Car Insurance........................... 44
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..................... 16 (inc contents) <- only just done and was one of the cheapest I could get
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 2
Entertainment........................... 100 <- Pocket money account
Holiday................................. 0
Emergency fund.......................... 20
Bank Account Fee........................ 12.5
World of Warcraft....................... 8
Total monthly expenses.................. 1258.5

Assets
Cash.................................... 0
House value (Gross)..................... 85000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 87000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 88950....(426)......0
Hire Purchase (HP) debt ...... 1668.....(101)......0
Total secured & HP debts...... 90618.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Wescot.........................104.01....20........0
Credit Card....................544.07....13........18.95
Overdraft......................850.......30........0
Ex.............................1000......0.........0
Family.........................700.......0.........0
Total unsecured debts..........3198.08...63........-
Monthly Budget Summary
Total monthly income.................... 1,576
Expenses (including HP & secured debts). 1,258.5
Available for debt repayments........... 317.5
Monthly UNsecured debt repayments....... 63
Amount left after debt repayments....... 254.5

Personal Balance Sheet Summary
Total assets (things you own)........... 87,000
Total HP & Secured debt................. -90,618
Total Unsecured debt.................... -3,198.08
Net Assets.............................. -6,816.08


Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

I appreciate that looking at it, it doesn't seem too bad on the whole, but this is mostly "in theory" at the minute.
Quick summary of recent past: Mortgage on house with ex, tried to sell, sale going through, moved out and started renting, sale fell through due to ex, ended up paying both mortgage and rent for 5 months while this was going on (approx £900 total each month). I've now been able to move back to the mortgaged house and only have this one cost to deal with!

I only started my "pocket money" account a few months ago, and found that I don't seem to spend much from it. The only reason that I don't have anything in it at the minute is because I lent £100 to a friend who really needed money to help with a house deposit, and I should be getting that back at the end of October. Apart from that minor hiccup, I was going to be putting anything left from that £100 towards my debts when payday came round again. I've also been rounding my bank account down to the nearest £10 and putting that against the credit card when I end a Friday in credit, though that hasn't happened much recently

I will be paying Wescot off in full next payday (end of Oct), so that will be an extra £20 a month that can go elsewhere. I'm also going to be dropping the Ultimate bit of my Reward account once I get a safe distance from my overdraft, which will save me another £12.50 a month.

Please try not to be too harsh with me! :A

Tixy

Hi demon

If you could stick to the budget above that would be great.

Even though you have the credit card charging high apr I would still start setting aside savings for the tax, insurance etc. Whilst that seems like its breaking the rule of having savings whilst you have debts think of it as budgeting not saving! Having a savings account even with a fairly small balance for emergencies makes me sleep easier! If the balance builds up (and you don't have any emergencies that need to spend the emergency part of the balance) then you could always stop the savings for a few months and divert extra to the credit card.

If you can put aside the emergency fund figure and an amount for tax & insurance etc at the start of each month you should then know what you can pay extra off the card. As you rightly say you don't want to be in the same position next year and it always seems the case that the big spend items come at the same time.

I expect you've considered this before, but is the bank account fee of £12.50 worth the benefits it gives you?

d3mon4ngel

Tixy wrote: »

Hi demon

If you could stick to the budget above that would be great.

Even though you have the credit card charging high apr I would still start setting aside savings for the tax, insurance etc. Whilst that seems like its breaking the rule of having savings whilst you have debts think of it as budgeting not saving! Having a savings account even with a fairly small balance for emergencies makes me sleep easier! If the balance builds up (and you don't have any emergencies that need to spend the emergency part of the balance) then you could always stop the savings for a few months and divert extra to the credit card.

If you can put aside the emergency fund figure and an amount for tax & insurance etc at the start of each month you should then know what you can pay extra off the card. As you rightly say you don't want to be in the same position next year and it always seems the case that the big spend items come at the same time.

I expect you've considered this before, but is the bank account fee of £12.50 worth the benefits it gives you?

Thanks for the input Tixy.

I think I might actually drop the account fee pretty soon, as I've worked out that this month I've paid £12.50 fee + £19 overdraft fees, which works out as £31.50, but I would have only paid £26 in overdraft fees with just the normal Reward account. I don't think I use the other stuff enough to justify the expense either. It is something that I shall look into.

d3mon4ngel

Hi again! More advice needed!

How does this sound for a plan?

1. Open a Co-op account as per the MSE email. This will give me all the benefits I currently have, but will be fee-free for a year.
2. Switch only the DD's and SO's from my current account. Keep my salary paid into my Halifax account.
3. Set up an SO from Halifax to Co-op for the total amount (plus a bit of a buffer) that will be taken by the DD's and SO's.
4. Change Halifax to a normal Reward account and watch as it uses the spare each month to move out of the overdraft.
5. Once it is out of the overdraft, use the extra it gathers to pay off my credit card.

Is the above feasible, or will they automatically switch my salary over at the same time? Is it wise to get another account with Co-op when I have my basic account with them? I don't particularly want an overdraft on the Co-op account as I will be sending over enough to cover what will be going out. Are Halifax likely to get nasty with me and demand the overdraft be paid back in full if I take my DD's away from them, but still keep the salary paid in?