Right here goes!

kelzcash

Hi everyone,

About a month ago I recieved a massive shock when I overspent on my current accout by just over £6, incurring a £30 penalty charge. I was due to be paid in about a week to 10 tens so I knew that money would be coming in soon. The bad news was that, being so bad with my money, I wasn't -£6 but -£706 as I have £700 overdraft. What made the situation worse was my second child was due in a week!!!

I have always been very disorganised when it comes to money, but I'm going to look at this incident in a positive way as it has made me a lot more mature about spending.

Unfortunatley I have two children and a wife to look after on a small budget. Here is my SOA.

Monthly incoming, after tax.
£1,197.21

Monthly outgoing.

Mortgage + Car loan - £200 (long story, but my Dad and I have bought and invested in a few flats making sure we made money each time until now where I bought a house, so am paying him back interest free for several years, at least 10).

Bank of Scotland Loan - £199

Council Tax - £318 (I due them some money from a mix up a few years back. It will be £318 until January when there's a two month payment gap and it will be back to normal, around £250 in March.

House Estate garden Facturing - £16

Scottish Hydro Gas - £40

Scottish Hydro Elec -£30

Mine and my Wife's mobile phones - around £63

Tiscali Broadband - £13

AA Car insurance - £27

Egg Card Payment £55 (soon to be M&S so it'll probably be more like £90 becaude of their 3% minimum payment).

Tv Licence - £34 quartely

BT landline - usually about £60 quartely

I had taken out a loan of £8000 back in April 2005 with the Bank of Scotland with the rate of 5.9%. due to the fact I had no money in my account I phoned them and have taken the same loan out again, paying off the old amount and paying the rest into my current account, about £2100. This loan will not be paid off until November 2010.

I have £2902.71 on my Egg Card at a rate of 15.9%, until now I had no idea that was going to take forever to pay off. I applied for a M&S &MORE card which I recieved with a £5000 limit so I have moved the money across onto that for a LOB 3.9%.

I am also waiting for my Egg Money Card to arrive in the post so I can transfer spending money from my current account, without ever going in the red again.

I guess what I'm saying is I now know what's going on with my money and debt but am worried about having such little spending money each month for the family. I am getting a 10% payrise in december and am about to recieve a £850 bonus from work, although after tax that's about £560.

So after bills my monthly spending will be about £172. This will improve with my payrise in december and my council tax bill being reduced.

Does anyone have ANY advise? Should I use some of this money (bonus+what's left over from the loan) to pay off some of the CC debt or put it towards my spending money.

P.S. My wife recieves child benefit and family tax credit which amounts to about £110 a month.

P.P.S. sorry for this being such a long e-mail.

Thanks in advance.

all_hours

kelzcash wrote:

P.S. My wife recieves child benefit and family tax credit which amounts to about £110 a month.

This should be more with a 2nd child. Child benefit alone would be around £116 for two children. Have you told the tax credits and child benefit about your change in circumstances.

all_hours

Your council tax bill is very high - have you checked your property has been banded correctly?

Gas and electric are high also - switch to energy saving bulbs, don't leave anything on standby, switch off lights if you're not in the room. Don't have the TV unless you're sitting down and watching.

The mobile bills are high - contact your suppliers and ask to be put on the lowest tarrif - when your contracts expire change to PAYG and only use in emergencies.

You should really include an amount for shopping in the budget and stick to it rather than seeing what you have left. Look on the oldstyle forum for ideas on how to keep cleaning and grocery bills down. Cook from scratch, bulk cook and freeze, make use of the reduced counter and bogog offers, use money off coupons.

You also need to include an allowance for petrol, car tax, servicing + repairs, clothes, haircuts, social etc.

CLAPTON

i think it would help you if you did a little more on your budget

a. firstly work everything out monhtly so you can add it up and compare with your monthly income....so e.g. you pay BT about 60 per quarter so write that as 20 per month, similarly TV license of 34 quarterly as 11.34 per month etc.

b. add all the other things you haven't include, so how much do you spend on food and groceries? , petrol, haircuts etc....try to break in all down....start a spending diary (and OH) to see where you are spending
:
also add all the yearly and one off...you have a car so what about car tax, MOT, AA/RAC, servicing, you have kids so there must be something for clothes, kids activities, presents xmas

it will probably be painful but unless you know the full financial picture you won't be able to take effective action.


your income is quite low , can you or OH get a part time job to help increase income?

on the spending

60 for mobiles is very high .....use PAYG and only use in emergencies

Dr.Shoe_2

When your mobiles come up for renewal you can opt to take a "loyalty discount" instead of an upgrade. This'll take £10-15 per month of each phone bill saving you up to £30 per month, as someone above said, go onto the cheapest tarrif as a "flex" style account so you buy credit to top up when your free minutes run out.

fatbelly

all_hours wrote:

This should be more with a 2nd child. Child benefit alone would be around £116 for two children. Have you told the tax credits and child benefit about your change in circumstances.

Yep, I reckon about £60 per week CTC would be about right.

And if that council tax figure is not already 'net of benefit' - it surely can't be, it's really high - then you shoud get about half of it paid by Council Tax Benefit.

You can check the sums yourself on https://www.entitledto.com

Cheers

Biffa

kelzcash wrote:

Hi everyone,

About a month ago I recieved a massive shock when I overspent on my current accout by just over £6, incurring a £30 penalty charge. I was due to be paid in about a week to 10 tens so I knew that money would be coming in soon. The bad news was that, being so bad with my money, I wasn't -£6 but -£706 as I have £700 overdraft. What made the situation worse was my second child was due in a week!!!

I have always been very disorganised when it comes to money, but I'm going to look at this incident in a positive way as it has made me a lot more mature about spending.

Unfortunatley I have two children and a wife to look after on a small budget. Here is my SOA.

Monthly incoming, after tax.
£1,197.21

Monthly outgoing.

Mortgage + Car loan - £200 (long story, but my Dad and I have bought and invested in a few flats making sure we made money each time until now where I bought a house, so am paying him back interest free for several years, at least 10).

Bank of Scotland Loan - £199

Council Tax - £318 (I due them some money from a mix up a few years back. It will be £318 until January when there's a two month payment gap and it will be back to normal, around £250 in March.

House Estate garden Facturing - £16

Scottish Hydro Gas - £40

Scottish Hydro Elec -£30

Mine and my Wife's mobile phones - around £63

Tiscali Broadband - £13

AA Car insurance - £27

Egg Card Payment £55 (soon to be M&S so it'll probably be more like £90 becaude of their 3% minimum payment).

Tv Licence - £34 quartely

BT landline - usually about £60 quartely

I had taken out a loan of £8000 back in April 2005 with the Bank of Scotland with the rate of 5.9%. due to the fact I had no money in my account I phoned them and have taken the same loan out again, paying off the old amount and paying the rest into my current account, about £2100. This loan will not be paid off until November 2010.

I have £2902.71 on my Egg Card at a rate of 15.9%, until now I had no idea that was going to take forever to pay off. I applied for a M&S &MORE card which I recieved with a £5000 limit so I have moved the money across onto that for a LOB 3.9%.

I am also waiting for my Egg Money Card to arrive in the post so I can transfer spending money from my current account, without ever going in the red again.

I guess what I'm saying is I now know what's going on with my money and debt but am worried about having such little spending money each month for the family. I am getting a 10% payrise in december and am about to recieve a £850 bonus from work, although after tax that's about £560.

So after bills my monthly spending will be about £172. This will improve with my payrise in december and my council tax bill being reduced.

Does anyone have ANY advise? Should I use some of this money (bonus+what's left over from the loan) to pay off some of the CC debt or put it towards my spending money.

P.S. My wife recieves child benefit and family tax credit which amounts to about £110 a month.

P.P.S. sorry for this being such a long e-mail.

Thanks in advance.

Having only had four hours sleep, it's possibly me being dim, but I can't see anything in your SOA that allows for food???? Also, you have a car loan and breakdown cover, but again nothing for fuel or insurance, mot or tax?

Like the others have suggested, keeping a spending diary can be a real eye-opener. Keep a note of every PENNY that you spend, whether it's cash or on cards - even if it's only 35p for a newspaper.