New year, new start....Advice needed :-)

anxious_mum

Hi all,

I was on the DFW site for while, sorting out the huge mess that was my life after my ex husband stopped paying an (amicably arranged) amount towards our two boys. My LBM came when I realised I needed to be able to cope with just my salary and not rely on him financially.

Soooooo....I bit the bullet, consolidated my stupid CC debts that I had allowed to build up, and extended my mortgage over a further 10 years....sigh, I wanted to clear it earlier, but needs must etc.

Anyway, I am now in the position of being unsecured debt free :j

I have posted my SOA below to get some advice of what to do with the small surplus I will get. For background, my elderly mum lives with me and insists on giving me £100 pm towards costs. I bought her a car a while ago, and although I tax and insure it, she pays the petrol and maintenance, so those costs are missing (I have a fully funded company car, so no expenses there for me although I pay tax for it obviously).

My ex has said he will pay some maintenance as and when he can, but I'm thinking that now the boys are teenagers that they should have this and be responsible for their own expenses. I have asked for £25.00 per week per boy board, but I can't really add this in yet as it isn't regular. He did pay last month, £200 per boy, but who knows about next month etc....

So....questions, Should I build up my ISA so that I have 3 times my salary saved? Then, if I do this....at the end of every month, any surplus in my account...should I move this into my ISA, or into a savings account? Or, should I pay this off into my mortgage account?

Any help welcome :T

PS, I've got £80 towards holidays as I just booked week away with a friend for next year, my first break in yonks!



Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details[/b]
Monthly income after tax................ 1781
Partners monthly income after tax....... 0
Benefits................................ 168
Other income............................ 100
Total monthly income.................... 2049

Monthly Expense Details[/b]
Mortgage................................ 600
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 60
Gas..................................... 50
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 0
Mobile phone............................ 15
TV Licence.............................. 0
Satellite/Cable TV...................... 50 (includes land line, broadband and TV)
Internet Services....................... 0
Groceries etc. ......................... 60
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 10 (mum's car)
Car Insurance........................... 26 (mum's car)
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 9 (contact lenses)
Pet insurance/vet bills................. 17 (2 x cats)
Buildings insurance..................... 10
Contents insurance...................... 10
Life assurance ......................... 26
Other insurance......................... 50 (redundancy cover, boiler, electrics and water pipes)
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 80
Holiday................................. 80
Emergency fund.......................... 50
Total monthly expenses.................. 1388


Assets
Cash.................................... 650 (ISA)
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 800 (mum's car)
Other assets............................ 3000 (some gold jewellry)
Total Assets............................ 144450


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 90000....(600)......3.9
Total secured & HP debts...... 90000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-


Monthly Budget Summary
Total monthly income.................... 2,049
Expenses (including HP & secured debts). 1,388
Available for debt repayments........... 661
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 661

Personal Balance Sheet Summary
Total assets (things you own)........... 144,450
Total HP & Secured debt................. -90,000
Total Unsecured debt.................... -0
Net Assets.............................. 54,450

SmlSave

Hi hun, what interest rate have you got for your ISA? Does it beat your mortgage rate?

anxious_mum

Hi Smlsave, thank you for replying. My ISA rate is 2%, so the £650 I have in there earns me about 29p a month! I was thinking of building this up to around £3000 so I have some emergency money, and anything that the ex pays (should be £200 pm and not included above) I could pay into the mortgage. Then, I have a separate account where any surplus from my current account could go, this will go towards my holiday and saving for a new bathroom.

I am just so relieved to have 'extra' money at the end of the month I want to do the best with it, but I also want to bring down the term on my mortgage, which is a repayment.

Wobblydeb

I think you may need to re-look at your groceries figure.

I would recommend a regular saving account to build up your emergency savings. It will pay you more interest over the next 12 months than you would get from an ISA - e.g. 8% in First Direct. Most (if not all) run for 12 months, so open one, run it for a year and then transfer the proceeds into your ISA.

While putting away any "spare" that comes to you is a great idea, I would suggest getting into the habit of putting away a fixed amount on payday too - even if it is only a small amount.

Speaking from experience, it is too easy to spend anything extra coming in!

anxious_mum

Hi Wobblydeb, thanks for that, and you are quite right, my grocery figure is per week not per month (doh!). Its still pretty low as my mum chips in on the weekly shop. Good idea about the savings account, I think the ISA interest rates suck. I may transfer it into a higher interest account and set up a DD for a set amount, say £250pm on payday. My friend and I are paying £80 pm into a separate account for our holiday.
I think this time I will be really disciplined and if anything is left in the major account before payday, half will go towards the mortgage and half into my other 'mad' account, which should pay for my new bathroom eventually. Any board the boys pay via their dad will go towards the mortgage too.

I'm excited about being able to live within my means, and save. I've been in the !!!!!! before, I'm not going back there!