Help Needed - SOA is negative

MrsWaz

Hi,

I've been loitering on MSE forum for a while now and have finally had the courage to prepare a SOA.

Its showing with not enough income to cover my expenses. Has anyone got any tips or advice to help with this?

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1799.89
Partners monthly income after tax....... 892.23
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 2773.32
Monthly Expense Details
Mortgage................................ 490.4
Secured/HP loan repayments.............. 159.19999999999993
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 87.94
Electricity............................. 35
Gas..................................... 35
Oil..................................... 0
Water rates............................. 16.51
Telephone (land line)................... 0
Mobile phone............................ 22
TV Licence.............................. 12.13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 100
Petrol/diesel........................... 200
Road tax................................ 27.08
Car Insurance........................... 61.08
Car maintenance (including MOT)......... 41
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 216.66
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 46.93
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 25
Entertainment........................... 0
Holiday................................. 60
Emergency fund.......................... 0
Waxing.................................. 30
Total monthly expenses.................. 1965.93

Assets
Cash.................................... 0
House value (Gross)..................... 120000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 125000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 120000...(490.4)....4.9
Hire Purchase (HP) debt ...... 2230.06..(159.2)....0
Total secured & HP debts...... 122230.0.-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................4960......212.9.....9.96
Mint...........................3075.05...69.16.....21.66
Barclaycard....................10077.8...201.5.....25.9
Halifax........................5822.09...132.3.....25.95
Nationwide.....................8591.17...257.7.....19.9
Total unsecured debts..........32526.11..873.56....-

Monthly Budget Summary
Total monthly income.................... 2,773.32
Expenses (including HP & secured debts). 1,965.93
Available for debt repayments........... 807.39
Monthly UNsecured debt repayments....... 873.56
Amount short for making debt repayments. -66.17
Personal Balance Sheet Summary
Total assets (things you own)........... 125,000
Total HP & Secured debt................. -122,230.06
Total Unsecured debt.................... -32,526.11
Net Assets.............................. -29,756.17
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using IE browser.[/font]

Mikazaru

MrsWaz wrote: »

Hi,

I've been loitering on MSE forum for a while now and have finally had the courage to prepare a SOA.

Its showing with not enough income to cover my expenses. Has anyone got any tips or advice to help with this?

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1799.89
Partners monthly income after tax....... 892.23
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 2773.32
Monthly Expense Details
Mortgage................................ 490.4
Secured/HP loan repayments.............. 159.19999999999993
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 87.94
Electricity............................. 35
Gas..................................... 35
Oil..................................... 0
Water rates............................. 16.51
Telephone (land line)................... 0
Mobile phone............................ 22
TV Licence.............................. 12.13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 100 Cut back for now, can be halved.
Petrol/diesel........................... 200
Road tax................................ 27.08
Car Insurance........................... 61.08
Car maintenance (including MOT)......... 41
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 216.66
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 46.93
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100 £1200 a year on presents? This can be cut a lot.
Haircuts................................ 25
Entertainment........................... 0
Holiday................................. 60
Emergency fund.......................... 0
Waxing.................................. 30 Can you go every 6 weeks instead of every month?
Total monthly expenses.................. 1965.93

Assets
Cash.................................... 0
House value (Gross)..................... 120000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 125000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 120000...(490.4)....4.9
Hire Purchase (HP) debt ...... 2230.06..(159.2)....0
Total secured & HP debts...... 122230.0.-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................4960......212.9.....9.96
Mint...........................3075.05...69.16.....21.66
Barclaycard....................10077.8...201.5.....25.9
Halifax........................5822.09...132.3.....25.95
Nationwide.....................8591.17...257.7.....19.9
Total unsecured debts..........32526.11..873.56....-

Monthly Budget Summary
Total monthly income.................... 2,773.32
Expenses (including HP & secured debts). 1,965.93
Available for debt repayments........... 807.39
Monthly UNsecured debt repayments....... 873.56
Amount short for making debt repayments. -66.17
Personal Balance Sheet Summary
Total assets (things you own)........... 125,000
Total HP & Secured debt................. -122,230.06
Total Unsecured debt.................... -32,526.11
Net Assets.............................. -29,756.17
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using IE browser.[/font]

Your surplus can be easily be made up by cutting down on presents and clothing.

What are the limits on your cards? Is there any chance of a 0% balance transfer?

MrsWaz

Thanks Mikazaru, not sure I'd get a 0% transfer as I assume I'd have a bad credit rating with all my current cards.

Credit Limits are
Halifax £6750
Mint £3300
Nationwide £9800
Barclaycard £10600

Hannah_10

I could absolutely butcher that SOA, and indeed I will in a moment because not only do you have an overspend you have a large debt burden, minimal assets and a child. All good reasons to look at the radical changes of lifestyle as well as just the painless ones. I see plenty of potential for improvement in your SOA, but it can be hard to hear. Take what you can from what I find, I'll do whatever I can with it.

KiKi

Hi, well done for posting.

Some comments below:

MrsWaz wrote: »

Electricity............................. 35
Gas..................................... 35

Are you on the lowest tariffs? Always worth comparing, and never leaving things on standby.

Telephone (land line)................... 0
Satellite/Cable TV...................... 0
Internet Services....................... 0

Just to check - you don't have any of these at all?

Clothing................................ 100

Buy school clothes for your child, but otherwise this needs to be cut down. If you must buy something new, buy from Ebay or cheaper places like Primark.

Presents (birthday, christmas etc)...... 100

Woah! That's £1200 a year on pressies! You need to cut this down - I manage 23 birthdays and 17 Christmas gifts on around £600, and that's with really, really nice pressies for family! Many people on here manage on a lot less. There are some excellent ideas on the Grabbit board if you need some inspiration or are looking for bargains!

Haircuts................................ 25

Look for cheap cuts at your local college or hairdressing school - some even do this for free.

Holiday................................. 60

Worth reconsidering this in light of the money you need to save.

Waxing.................................. 30

Shave.


If your car's worth £5000, can you sell and get a cheaper run around? I don't know much about cars, so that might not be practical, but that's a lot to sit in assets if you need the cash.

HTH a bit.
KiKi

Mikazaru

MrsWaz wrote: »

Hi,


Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................4960......212.9.....9.96
Mint...........................3075.05...69.16.....21.66 Limit 3300
Barclaycard....................10077.8...201.5.....25.9 Limit 10600
Halifax........................5822.09...132.3.....25.95 Limit 6750
Nationwide.....................8591.17...257.7.....19.9 Limit 9800
Total unsecured debts..........32526.11..873.56....-

You can do a bit of shuffling and eventually move £1000 of your Barclaycard balance to Nationwide and save a little interest. Then once you've got a surplus in your budget pay it all off your Barclaycard and then Halifax.

MrsWaz

Thanks KiKi,

I recently changed my gas and electric and the cheapest I got was £70 per month for both. I'm trying to cut down on my electric usage and heating is off now until Oct. I'm hoping by keeping usage to a minimum and submitting regular meter readings the D/D may go down a little.

You're right no TV,internet or landline

Thanks for the tips on clothing and pressies. I didn't realise how much I spent until it was written out!

Hannah_10

Household Information
Number of adults in household........... 2
Number of children in household......... 1 Age please?
Number of cars owned.................... 2 Can you manage with 1 car? Ok, now have another think, what about 1 car and a litte motorbike or scooter, or even better 1 car and a good bicycle? How about public transport? Lift share? Walking? Think hard about this, cars are money eaters. You could save around £165 each a month by dropping to 1 car.
Monthly Income Details
Monthly income after tax................ 1799.89
Partners monthly income after tax....... 892.23 One or both of you ought to think about asking for a pay rise, overtime, a second job, or increasing your income by something like Bettaware or even paid online surveys. Martin has a list of over 60 ideas here http://www.moneysavingexpert.com/health/?tab=37 Try to increase income, by whatever method, by £150
Benefits................................ 81.2 www.entitledto.org to check you are getting every last penny you should be. You probably are but do it anyway.
Other income............................ 0 I know it's on the list of ideas I just gave you but it's so good it warrants a mention of it's own. What about a lodger? £400 extra money a month and they hardly use any electricity. Have a think about it. Little one could even bunk up in your room again until thier 8th birthday. It's a bit drastic, but your situation is a bit drastic.
Total monthly income.................... 2773.32 (I think you can manage to increase this to £2923.32)

Monthly Expense Details
Mortgage................................ 490.4
Secured/HP loan repayments.............. 159.20 (Corrected this for you)
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 87.94 This sounds like it's probably Band A already? If not there are articles here about rebanding, claiming back thousands in overpayments and council tax discounts. See the reclaim £1000's section at the very top left, just under Martin's mugshot.
Electricity............................. 35 Try for £25
Gas..................................... 35 Try for £25 Electric and gas aren't terrible, but there is potential to reduce. Simple things like using a timer on the thermostat and keeping everything unplugged at the wall except when it's in use can really help. Also there are forever free energy saving thingies on the freebies boards and lots of advice online. As well as cutting back spend some time on uswitch.co.uk or another comparisson site checking you are on the best plan for you. If you save £3 a week that's £156 a year. Not bad, £156 for an hour spent online.
Oil..................................... 0
Water rates............................. 16.51 Are you on a meter?
Telephone (land line)................... 0
Mobile phone............................ 22 This isn't too bad, but you need to make hundreds of pounds adjustment to your SOA to stay afloat. So you are going to have to bring it down again. Try for £15.
TV Licence.............................. 12.13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200 There was an MSE project, by forum members, to find the least money that would feed a family of 4 adults/teens while meeting all dietry guidelines and not being horrible either. The answer is £100 a month, honestly! See here http://www.cheap-family-recipes.org.uk/ I would like to see this at £150 for now, you can do it.
Clothing................................ 100 Needs to come way down. I know the child grows and clothes wear out but we are hundreds short of a good outcome here. You are used to a lot of clothing spends, so for now go for £50 here.
Petrol/diesel........................... 200 At the current prices this has got to be reconsidered too. The IAM have some good advice on how to drive more efficiently here. http://www.iam.org.uk/driving_tips/ecodrivingtipshowtoimproveyourmpg.html You also need to consider that if you honestly must have 2 cars, you will have to try to use them less. For now I'll say £180 here as I don't know how far you can get this cut back.
Road tax................................ 27.08 Not too bad for 2 cars. If you drop a car, lose the most expensive one to run. I'll leave this as it is for now, as I don't know if you can drop a car.
Car Insurance........................... 61.08 Martin has an article for that too, here http://www.moneysavingexpert.com/insurance/compare-cheap-car-insurance Following the advice in the article to the letter took me half a day and saved me £300. I will also add that legal cover, breakdown cover, european cover and so on can be a lot cheaper if you arange it separately and don't just have it on your insurance automaticaly. I'll put a nice conservative reduction to £58 here for now, because I don't know how far you can get this down. bviously cheaper is better.
Car maintenance (including MOT)......... 41 Sounds about right being honest. Cars just eat cash. You can get council MOT tests which are cheaper than garage MOT tests and tend to find less faults too. You can also ask someone in the know what the absolute cheapest oil and tyres you can sensibly use are and drive by the IAM tips I linked to avoid wearing stuff out. I'll say aim for £36, there wont be a lot of scope here.
Car parking............................. 0 Yay!
Other travel............................ 0
Childcare/nursery....................... 216.66 This can be really difficult to reduce but can you... work different hours to allow more parent care and less formal care? Get Granny/Uncle to do this one afternoon a week to save a bit? Drop 1/2 hour off the nursery day by making your droping child off and arival at work times tighter? Tell the childcare that you are in dire straits and ask for a price freeze or a discount? I wont suggest a figure to aim for, it's too individual.
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 Put £15 here please. Calpol, opticians, dental check ups etc.
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 Worrying.
Contents insurance...................... 0 Worrying. You need to look at that again when you've got your situation a bit more under control. I'll put this up to £20 for a numbers sakes.
Life assurance ......................... 46.93 People take this out to protect them from a crisis, like a big financial mess. You already have a big financial mess and you need the £46.93 for yourself each month, in order not to lose the house. It isn't ideal I know, but this is going to have to go. £0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100 You just haven't got it. You are going to have to cut right back. £30 here is quite generous. It can be done, you can make presents, there are a lot of freebies about (especially make up and girly gifty things) and where you must buy things make sure you get a stonking deal, with cashback (look up quidco, or topcashback for examples).
Haircuts................................ 25 This has got to come down. Go less often? Dye at home? See a junior? Even better see a trainee? Learn to use clippers for mens cuts or short styles (£6 I paid for the ones I did half my husbands regiment with when I was an army wife- with no training required). Even with the 3 of you, this should be £15.
Entertainment........................... 0
Holiday................................. 60 I am so sorry but there is no nice way to say this, you are in serious trouble. If you can get a grip on it now you can avoid it all slipping away from you and losing the house, but I do mean now, in 6 months time might be too late. I am so, so sorry about having to say this, but you can't afford a holiday. Or at least, you can't afford one that isn't a £10 newspaper deal. £10 a month here gives you £120, £40 for the newspaper deal, £80 for the petrol to get there and the entertainments passes. Food is normal because they are self catering holidays. That you can just about do. Or borrow a tent and camp.
Emergency fund.......................... 0
Waxing.................................. 30 Got to stop. Needs to be £0
Total monthly expenses.................. 1965.93 (You can make this £1595.53 if you can stick to the red and orange budgets, or even just £1380 ish if you could also drop a car and get £50 a month off the childcare bill too)

Assets
Cash.................................... 0
House value (Gross)..................... 120000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 125000

Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 120000...(490.4)....4.9 Oh dear. This is part of why I am worrying about how you will fare if changes are not made, it's at 100% of your house value. So effectively, all your debts are as though you were just renting. They stand alone at around £35k including the car on HP. And with that level of debt if things hit the skids your creditors wont play nice if they think they can bite a chunk from the house. We can help with handling creditors and keeping it all going your way, but where you are is right at do or die point financially.
Hire Purchase (HP) debt ...... 2230.06..(159.2)....0
Total secured & HP debts...... 122230.0.-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
Loan...........................4960......212.9.... .9.96
Mint...........................3075.05...69.16.... .21.66 *
Barclaycard....................10077.8...201.5.... .25.9 *
Halifax........................5822.09...132.3.... .25.95 *
Nationwide.....................8591.17...257.7.... .19.9 *
Total unsecured debts..........32526.11..873.56....- *= Right so of that total, £27,566.11p is at 20% APR (to 0 dp) or above. That is another problem. It's not just the value of the debt you have, it's the speed at which it could explode.

Monthly Budget Summary
Total monthly income.................... 2,773.32 (could be £2923.32)
Expenses (including HP & secured debts). 1,965.93 (could be £1595.53 or better)
Available for debt repayments........... 807.39 (could be £1327.79 or more)
Monthly UNsecured debt repayments....... 873.56 (we could get that to go down, or to go up, I'll talk solutions at the end)
Amount short for making debt repayments. -66.17 Could be an amount left after making debt payments, rather than an amount short.
Personal Balance Sheet Summary
Total assets (things you own)........... 125,000
Total HP & Secured debt................. -122,230.06
Total Unsecured debt.................... -32,526.11 This figure here is the one I worry about.
Net Assets.............................. -29,756.17

Looking at your SOA you areclearly not Ok. It is crunch time as I said. It's going to all fall in on you if nothing changes. I don't want to scare you but you would find that if it slips (and it is perilously close) then bankruptcy is the best case scenario. You'd lose the house, the cars and be very upset but at least it'd be over.

There is another option, which is a debt management plan. I think you should go for a managed DMP rather than a self managed one if you do this. Your ONLY two options for that are CCCS and Payplan, every other DMP provider is a shark. To go onto a DMP you will have a lot of upheaval. You will need a new basic bank account somewhere that has nothing to do with any of your creditors. You will have to give the DMP provider a fixed sum every month and they will send it to your creditors. You will need to write letters offering reduced payments, explaing you are on a DMP and so on. It's work, BUT it's work that should result in your being debt free (except mortgage) between 2 and 4 years from now, depending on how strictly you budget. Your credit rating will take a hit, but that only matters if you wanted credit in the next 6 years. I would hope after this near miss you would resolve to manage without credit from now on and build some savings as your buffer instead.

MrsWaz

Wow

Thanks, Hannah_10

Loads to think about there.

Regarding my sons age he is 15 months. I think my maternity leave has taken its toll on us, and although I am now back at work full time, we are still suffering the effects of me not being at work part of 2010.

I don't think I can lower childcare as this is already 'granny rate' and I know there is no way she will lower

I will consider the car options.

Regarding the life assurance, this is Friends Provident and I thought I needed this with my morgage?

Pollycat

MrsWaz
I think Hannah_10's post is a bit 'tough love' approach - but she's absolutely right.

What excellent advice she's given you.

You need 'tough love' right now, no !!!!!-footing about.

Good luck with reducing your expenditure.

SteveScooby

What benefits are you claiming? By the look of it just Child Benefit, you may well be eligible for child tax credits too.