Turn my life around...

SniperMonkey

Hey peeps.

i thought I would post here because I have seen so much good advice given that I hoped I could get some myself.

I'll start at the beginning. About 8 years ago my wife and I got into debt through many mediums like loans, credit cards etc. We ended up owing about £19,000 and we were fortunate enough to work for someone that helped us out massively. This dropped quite significantly down to £7900 which we are currently at.

I earn £250 a week and my wife earns the same also. Now £2000 a month sounds like a decent amount but for some reason I am struggling to get all the bills paid and on time.

Main debts are currently:
Very Catalogue (2 accounts-my wife and I) repaying back at around £290 a month back.
Empire catalogue paying back around £70 per month.
O2 - Mobile phone at £35 a month (expires in April 2011 and will be terminated)
Vodafone - my current mobile account at £45 which will be reduced in April down to £35.
Personal debt to a friend which is about £1200, repaying £50 a week.
Clode Retail Finance - Currently paying £30 a month

Among many other things, like credit cards it seems it's just a struggle.

Current plan of action is to get my O2 phone paid off as possible. At the start of the new year I am going to seriously reduce my Sky package from all the HD jazz down to bare minimum so cancel Movies, Sports and HD. (The only reason we have these currently is due to the 1 year contract of getting HD). Those 2 should save around £70 a month hopefully.

As far as I can see, those 2 are the only 2 I can make savings in unless anyone else has any terrific advice.

Many thanks and I appreciate any feedback, no matter how harse. It could be the kick up the pants I need.

I wanna start a family one day and it would be nice to be in the black for that and not in the red.

Yours,
Stuart

Shoe_Gal

Your plans sound sensible but a full SOA (link at the top of the page) will give the amazing people on here a chance to look where you might be able to make more savings

And the Snowball Calculator will help you work out the best order to pay off your debts in - those catalogue payments sound crippling so sound probably be cleared first

Good luck

Tixy

Hi Stuart and welcome

Sounds like a good starting point for you would be to write out a detailed statement of affairs (we use this calculator - http://www.makesenseofcards.com/soacalc.html ) This will allow you to see your income and priority expenditure and then see how much you have left for debt repayments - and see if it shows that you can afford all your repayments or not.

Sounds like a good starting point to reduce your sky package - have you looked at things such as checking your gas & elec is with the cheapest supplier and best tariff. Have you looked at your landline & internet to see if you can get cheaper? Checked that all your insurances are competative? Worked out how much you are spending on food/groceries each month and then worked at reducing that?
These are the usual areas people can manage to make some savings - but when you have a statement of affairs drawn up you'll see how much you need to make in savings to be able to afford your debts and how long it will take you to repay them all.

If you are feeling brave you can also post the statement of affairs on here for people to make suggestions as to where else you may be able to save.

tbourner

As above, fill in the SOA as accurately as you can:

http://www.makesenseofcards.com/soacalc.html

Everyone will reply saying things like "£10 into Emergency Fund? Where is that money do you really save it?" etc. and you'll have to fiddle the figures a bit, but you'll also get some really useful help on making some savings.

missexcel

Hey - just one quick idea - I have an O2 contract currently at £40, but I've been told after 9 months from starting the contract I can downgrade to the £25 if I want to - Just a thought, maybe you could downgrade early?

x

SniperMonkey

As per your request:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 969
Partners monthly income after tax....... 950
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1919

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 30
Rent.................................... 475
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 80
Gas..................................... 120
Oil..................................... 0
Water rates............................. 24
Telephone (land line)................... 10
Mobile phone............................ 110
TV Licence.............................. 25
Satellite/Cable TV...................... 68
Internet Services....................... 10
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 75
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 10
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 200
Emergency fund.......................... 0
Total monthly expenses.................. 1537


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


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 600......(30).......0
Total secured & HP debts...... 600.......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Very...........................3800......290.......0
Empire.........................600.......70........0
Lloyds TSB.....................250.......10........0
Personal Friend Loan...........1100......200.......0
Capital One....................500.......30........0
Natwest........................450.......45........0
Total unsecured debts..........6700......645.......-


Monthly Budget Summary
Total monthly income.................... 1,919
Expenses (including HP & secured debts). 1,537
Available for debt repayments........... 382
Monthly UNsecured debt repayments....... 645
Amount short for making debt repayments. -263

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -600
Total Unsecured debt.................... -6,700
Net Assets.............................. -7,300

SniperMonkey

As you can see, I have to try and prioritise which debt to pay first.

The one marked as holiday on there is something I have been paying for over a year now. It's my 10 year wedding anniversary in 2011 and we have a holiday booked and I am paying between £100 and £200 a month on that.

Tixy

Hi

Well at the moment you seem to be showing a shortfall each month of £263, which is obviously why you are struggling each month. So i'll go through and see what areas you may be able to make some savings in to help your figures balance.

SniperMonkey wrote: »

As per your request:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 969 (you said £250pw to start. Was that the gross figure or net figure?) if its net then that should equal £1082 per month (250 x 4.33)
Partners monthly income after tax....... 950
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1919

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 30
Rent.................................... 475
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 80 this looks quite high - are you paying off arrears in this? are you billed for this or do your have a prepay meter? Have you looked to see if you can reduce usage and/or switch to a cheaper supplier & tariff?
Gas..................................... 120 As elec this looks very high - do you have arrears?
Oil..................................... 0
Water rates............................. 24
Telephone (land line)................... 10
Mobile phone............................ 110 you said £35 & £45 contracts - what else is in this?
TV Licence.............................. 25 do you know how soon this drops? (it should halve after 6months of paying by DD)
Satellite/Cable TV...................... 68 definitely reduce this as you planned - or cancel altogether
Internet Services....................... 10
Groceries etc. ......................... 200 should be able to make some savings here by careful shopping and meal planning.
Clothing................................ 0 is this realistic long term? might need to budget a small amount here but obviously spend the minimum.
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 75
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 10
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 you need to budget for this
Haircuts................................ 0 and probably this
Entertainment........................... 0 and something here
Holiday................................. 200 with your shortfall you really cannot afford this this year - do you have a holiday booked? are you saving up this £200 each month? how much do you have saved?
Emergency fund.......................... 0
Total monthly expenses.................. 1537


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


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 600......(30).......0
Total secured & HP debts...... 600.......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR are these all just the minimum payments? do you know the APR for all the debts?
Very...........................3800......290.......0
Empire.........................600.......70........0
Lloyds TSB.....................250.......10........0
Personal Friend Loan...........1100......200.......0
Capital One....................500.......30........0
Natwest........................450.......45........0
Total unsecured debts..........6700......645.......- do you have overdrafts? are these included in this list?


Monthly Budget Summary
Total monthly income.................... 1,919
Expenses (including HP & secured debts). 1,537
Available for debt repayments........... 382
Monthly UNsecured debt repayments....... 645
Amount short for making debt repayments. -263

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -600
Total Unsecured debt.................... -6,700
Net Assets.............................. -7,300

Just a few comments above - hope some may be of some use to you. If you can stop the holiday money and make a few other small cutbacks you should be able to make your income & outgoings balance at least. While that will mean you may only be paying minimum amounts at least you won't be missing payments etc.

dreamdreamer

Things that stand out to me:

1) Your utilities (gas and leccy) are extortionate!! I assume you're in a small house or a flat as you have no kids and the rent is £475 - your utilites should NOT be more than £75 a month combined - not the £200 you're paying. Are you metered? Our utilities are £66 a month for a 3 bed house and we're NOT that energy efficient.

2) You need to lower your phone tariffs until the contract is up, then go on a sim-only or PAYG deal. It's a luxury you can't afford right now.

3) Ditch the Sky when you can and get freeview, or at the very least a basic Sky package.

4) If the holiday is booked presumably you're a bit tied in with that. What are you going to do for spending money since you can't save while you have a money shortfall every month?

5) You need to budget for entertainment, presents, haircuts and clothing. Although you might not do all these things every month, add up what it costs you over the year and divide by 12.

6) Find out the APR for your debts. Presumably your friends loan is interest free, is there any way you could lower repayments to him for a while to allow you to pay off higher APR debts?

Well done for trying to get things in order! :T

SniperMonkey

Ok, first of all thanks.

£250 was just rounded up. My actual wage is £243 after tax, per week.

Gas and Electric - No arrears, these are just payments made per week in order to keep ahead of the bill. I am entitled to anything back at the end of the quarter. Averages around £100 back per quarter depending on the time of year i.e winter this time around, expecting nothing back.

Mobile phone. My own O2 one is £35 per month and set to expire in April 2011. The £45 one is one for my own personal use and there is one at £35 per month which is my wifes.

TV License - I think this drops in february, not 100% sure.

Sky - Hoping I can drop this down to around £30. Maybe a little bit more if possible.

Shopping - The £200 is a rough estimate, we never spend more than that per month. We order shopping online, usually around £130 per month and then the odd little bits on milk, bread etc.

Clothing - £0 is accurate. I haven't bought any clothes for me in about 2 years and my wife probably the same. I wear workwear at work so no need.

Presents - We don't buy presents for anyone and we don't buy anything for each other at christmas. Sounds sad I know but we don't buy anything. Just cards.

Haircuts - My mum cuts it for me, yes again, sad I know but she does. As for the wife, I should probably put £40. 4 times a year at £10 a time.

Entertainment - What is in this category?

Holiday - Gotta do this, have put too much in to it, arranging with people etc. I can cancel up until August and get everything back except deposit, that's when I will revisit this one. I have been paying some per week on it dependant on overtime. I can get overtime and when I do I pay the holiday off with that. I suppose I didn't give an accurate representation of that. Hard to describe. Make sense?

I don't know the APR's. I must admit, shamefully.

I am hoping I can get a !!!! load of overtime and get stuff paid off.

SniperMonkey

@DreamDreamer:

hings that stand out to me:

1) Your utilities (gas and leccy) are extortionate!! I assume you're in a small house or a flat as you have no kids and the rent is £475 - your utilites should NOT be more than £75 a month combined - not the £200 you're paying. Are you metered? Our utilities are £66 a month for a 3 bed house and we're NOT that energy efficient. )- These are just a basic DD's and I get any money back over the quarterly charge.)

2) You need to lower your phone tariffs until the contract is up, then go on a sim-only or PAYG deal. It's a luxury you can't afford right now. (- I will phone up O2 and see what they can do)

3) Ditch the Sky when you can and get freeview, or at the very least a basic Sky package.(- That's my intention)

4) If the holiday is booked presumably you're a bit tied in with that. What are you going to do for spending money since you can't save while you have a money shortfall every month? (As for spending money, my wife's father is stumping some up as a present, her mother and my parents too)

5) You need to budget for entertainment, presents, haircuts and clothing. Although you might not do all these things every month, add up what it costs you over the year and divide by 12.

6) Find out the APR for your debts. Presumably your friends loan is interest free, is there any way you could lower repayments to him for a while to allow you to pay off higher APR debts? (- I don't know the APR's, do I phone them to find out?. My friends loan is interest free but he needs money too so it's kind of catch 22 for him)

Well done for trying to get things in order!