SOA; would anyone be kind enough to take a look?

sharronej

I have been involved in a conversation on another thread and I was advised to put an SOA on to see if people could offer some advise?

Here is a link


I posted a very long reply explaining how we ended up in this situation and also saying that this week I have found the snowball calculator which has given me a huge confidence boost and a belief that we can get out of this mess and was asked whether or not I have contacted the cc companies with a view to reducing or freezing the interest on the accounts. I have no idea what to say and most of the debts are my dh who won't be able to face telephoning the companies so I'd have to do this in letter form but don't know what to put.

Any advise is most welcome.
TIA


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 4
Number of children in household......... 1
Number of cars owned.................... 2 (family car + work van)

Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 1200
Benefits................................ 240
Other income............................ 200
Total monthly income.................... 3240

Monthly Expense Details
Mortgage................................ 260
Secured/HP loan repayments.............. 200
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 137
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 14
Telephone (land line)................... 25
Mobile phone............................ 85 (four phones)
TV Licence.............................. 13
Satellite/Cable TV...................... 77
Internet Services....................... 0
Groceries etc. ......................... 325 (I know this are can and will be cut)
Clothing................................ 20
Petrol/diesel........................... 60
Road tax................................ 40
Car Insurance........................... 100
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 430 (dd at Uni plus son with Tutor)
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 18
Contents insurance...................... 18
Life assurance ......................... 39
Other insurance......................... 0
Presents (birthday, christmas etc)...... 75
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 25
Emergency fund.......................... 0
Total monthly expenses.................. 2081


Assets
Cash.................................... 0
House value (Gross)..................... 300000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 303000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 20000....(260)......6.99
Hire Purchase (HP) debt ...... 6000.....(200)......0
Total secured & HP debts...... 26000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
mbna...........................2789......83........23
lloyds.........................2657......54........20
cap one........................3623......109.......10.8
bank loan......................6000......231.......8
lloyds.........................2595......71........29.99
paypal santander...............4988......150.......14.01
hsbc...........................3289......83........21.9
Total unsecured debts..........25941.....781.......-


Monthly Budget Summary
Total monthly income.................... 3,240
Expenses (including HP & secured debts). 2,081
Available for debt repayments........... 1,159
Monthly UNsecured debt repayments....... 781
Amount left after debt repayments....... 378

Personal Balance Sheet Summary
Total assets (things you own)........... 303,000
Total HP & Secured debt................. -26,000
Total Unsecured debt.................... -25,941
Net Assets.............................. 251,059

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

sueeve

just to clarify. Are the 4 adults yourselves and 2 adult children? If so, how do they contribute? Are you still paying for their mobiles? PAYG that they finance themselves is reasonable. If one is a work phone a contract may be sensible, otherwise PAYG encourages you to ration.Satellite cable TV is expensive, even if internet is included. We pay about £42 for internet and Sky basic package.

bottleofred

Hi Sharon,

Totally agree with op regarding the cost of mobiles and satellite tv. Although your husband can't face calling the card companies, getting him to write a letter asking them to reduce or freeze the interest is the best thing to do, although you'll obviously need to explain your in financial difficulties. Obviously you won't be able to use the cards, but this will be a blessing in the long run. The companies will then more than likely request a personal statement of your financial incomings and outgoings before granting the request about freezing the interest, although some companies have been known to refuse such requests. In order to get out of this, your husband needs to face the problems as well otherwise only one of you will be trying to get the debt sorted.

Good luck

sharronej

Sueeve and bottleofred thank you for replying. Just to clarify we are a family of five - myself dh, a twenty yr old who contributes £200 pcm, an 18 yr old who's just moved to University in Wales (Thus the cost of supporting her is a minimum of £200 for her food, phone and travel home twice a month), a 14 yr old who has a tutor (Tutor £100pcm, mobile £10, scouting and dancing £20, school bus fare £20, school dinners £50 and £20 spending money). We would be rich if we didn't have the kids! My husband and I are both self employed his phone is the dearest at £45 and mine is £10 and both are essential, apart from DH we are all on the O2 simplicity deals which mean that all our calls to each other are free and we have unlimited texts - the thought process was that getting the right deal for the teenagers would control the bill to a reasonable level.

The sky is definitely something I could knock down

Not being able to use the cards isn't an issue because I've cut them all up and the old cards have run out - I have no intention of allowing any of them to be used for any reason, we don't know the pin numbers anyway. The snowball calculator worked out if I paid £1050 onto the cards and it showed me when, where and how that I could be debt free by March 2013 - the thing I'm wondering about is would I be better contacting the card companies or would I be better paying off the first one which is predicted at twelve months and then trying for a balance transfer at a lower apr?


Just had a look and think I could shave £21 off the sky package if dh chose just one of the sports channels and I got rid of the movies!

bottleofred

Hi Sharon,

I can sympathise with the sports package thing, because I currently pay £43 per month and while I deeply resent it, love the football. However, I do know that from time to time they reduce the cost of the package for 3-6 months if you call and say your thinking of cancelling something as it's too expensive (something I should be doing myself soon!!). You'll need to keep at you husband though, so your both pulling in the same debt free direction.

NorthernLas

The SOA shows that you have an excess at the end of the month of £378. Do you, or is it worth having a spending diary for a few weeks to check that your SOA is accurate?

If you have an excess, you could use the snowball calc to pay off the highest first ...

sharronej

Northern Las, I forgot to put my dh's advertising bill onto the SOA which is £121.00 pcm for the Yellow Pages. The rest of the money just seems to fall into the Black Hole - kids asking for the odd couple of pounds, new T-Shirts/Jeans etc and the old favourite of Mum can I have.....? Extra petrol money if we decide go and see dd or if we are taking the Cubs/Explorers on camp this also seems to cost us money we also like going to car boot sales. So no we never actually seem to have a couple of hundred pound left at the end of the month but I have a pretty good idea why and I know I need to get a grip on it. It cost us a fortune to set dd up for Uni plus I think that we are basically just sloppy with where our money goes. For years I've said that it actually doesn't matter how much money I earn because I never have anything for myself in any case! I've been reading about piggy banking and have set up a number of esaving accounts with names like Christmas, Car Tax etc etc so that I can remind myself that these things exist and hopefully can direct money into them because as I say I never seem to see the benefit of spare cash in any case. Dh is also dreadful at nipping to MrT for a bottle of wine and I'm sure he must spend at least £60 pcm on alcohol but it comes out of his money. I'll try that with sky bottleofred and see what happens.

closed

piggy banking means you will pay upto 29.9% extra, the money would be better directed at reducing a high apr debt with available credit, and borrowing again from it only when you need to - cutting up the cards has it's downside, it also stops you moving high apr debt to lower apr cards gradually

http://www.moneysavingexpert.com/savings/pay-off-debts

sharronej

Thank you Closed,

Can I ask you what may (and probably is) a stupid question? I had set up the following accounts Christmas (£50) Car Tax and MOT (£45) and Tax Man (£50), I can see the sense in what you are saying that's potentially £150 pcm extra off our debts - this money is just being frittered away at the moment BUT how do I pay for these things if I've put the money towards our debts? I will happily follow any advise given. I have an available balance on a couple of the cards but was going to write letters asking for the limit to be reduced.


I have been thinking some more about the extra £150 would it work if I paid the money onto the debt and then on the months when these bills fell I just paid the minimum payment?

closed

Lets assume you are both able to resist overspending on the cards, and are saving up for Christmas 2011, and car tax due around the same time, and have 2 cards with available credit, one a low apr, one high.

If you put money into a savings account now, it will earn a pitiful amount of interest, and you will be saving away for a year money that could pay off a bit of debt, reducing interest owed all the time.

Alternatively, you could pay off as much as you can from the highest apr cc, and min payment on lowest apr, and then when you need to buy Christmas present, buy them on the cheapest of the 2 cards with credit available - you've saved a whole years interest on whatever you spend.

similarly you can load the low apr card to the max with food/clothes spending etc, and use the saved money to pay off the high apr card. Whatever you pay off becomes available credit should you need it later on, but all the time you are saving interest and shifting high apr to low apr.

Obviously this only works for things you can pay by cc, the tax man prefers cash, but it doesn't stop you from using it in the meantime more effectively with careful planning.

reducing limits is a bad idea, the real answer is to control spending, you might need that credit one day.

HappyMJ

You have £250,000 worth of equity in the house. Secure the debt and bring the interest rate right down. Yes I know everyone says its a bad idea but you have so much equity no creditor would ever freeze interest in your case. And your rates are so high. If you tripled your mortgage from £20,000 to £50,000 your payments would go up to £650 per month but you wouldn't need to pay £781 per month so you could then increase your mortgage payment to £1,000 per month and bring the term right down to about 5 years.