Sparkerly's SOA

Sparkerly

NeverAgain wrote: »

The OP's problem - as with so many households - is housing costs are way too high.

About a quarter of monthly salary - or a week's money if you are paid weekly - for mortgage payments is manageable.

To service the £1,730 mortgage, the OP needs an income of £7,000 a month, not the measly £4,600 she has coming in.

I would point out that before I left my job to renovate our new home last year our mortgage repayments were not a problem. Also our income tax rate has increase by 5% this year which has had an impact on us.

I wish I could pay less for housing costs but over here the cost of housing is horrendous and if you want your own property you are looking at a minimum spend of £200,000 and that is for a one bed flat! As for renting we were paying £1500 a month for a small 3 bed property before buying our home!

the_cat

You are obviously going to have to cut back on the least important of your luxuries if you want to continue to pay school fees and keep the home you currently have rather than downsize.

I think the trick is to get the family on board. The kids are teenagers and therefore old enough to be involved. Get together a FULL warts and all SOA with everything that you currently spend. Get everyone together and ask for suggestions on what they think should go. Anything you all agree on can go immediately. The rest will have to be negotiated until you reach a point where you can start to make inroads into your debt. If OH really wants to keep Sky, what is he prepared to give up instead? If the kids hate packed lunches, will they go without pocket money or birthday presents instead? (ha ha, no chance!)

Googlewhacker

oh and start a spending diary to see what you really are spending the money on!

beecher2

Sparkerly wrote: »

Seeing the things you've added in that I didn't even think about is really scary. Things are a lot worse than I thought.
.

Focus on one thing at a time if it is feeling overwhelming - cancel the gym membership, and negotiate with your husband regarding Sky. Then look at the utilities and food budget - you'll get great help on the other forums. Then, get the insurance sorted out and look at the snowball calculator http://www.whatsthecost.com/snowball.aspx to work out which debts to tackle first.

You can turn things rouns, so don't panic.

Sparkerly

Thanks for all the help. I am sure you have all been where I am when you start to face reality and it hits you square in the face. But my lightbulb is growing brighter by the minute! Just got to get the family on board big time.

Sky will be a bone of contention with my OH, but as nice as multiroom is, its not necessary to have a full package on both.

We have to live within our means and stop increasing our debt each month and relying on whatever balance is on our cc to see us through to the end of the month.

GeorgieFTB

Sparkerly wrote: »

Wish the life assurance was a typo, but no it really is that much. For my sins I used to be a financial adviser dealing with mortgage life assurance so I took my own advice and made sure that we have a lot of cover. Putting it down in writing how much we spend has made me realise that I need to look at exactly what cover we have and do we really need it. I gave up my job as I didn't like the pressure I was under to ensure customers took out every possible cover when I knew they couldn't necessairly afford or need it.

I'll have a look at that other SOA although if not everything is included now I'm in even more trouble than I thought

Spark

You have a new part time job... You are the financial director of your family...

Go have a stiff drink/cuppa tea/ciggy/whatever... then come back and fill in the SOA... once it is down in black and white you can deal with it! With your DH and sky you might need to show him the budget and look at what channels are actually watched then downsize...

With the kids and lunches... I'm quite evil so (and I do know it depends on ages) give them a budget, quite stingy and make them pick/shop for their own lunches!

Examine every cost for you family and work out how to reduce or remove it. And once you have re-worked all the SOA website also has a snowball calculator, this will tell you how quickly you could become debt free!

Gx

NeverAgain_2

Sparkerly,

The quarter of income rule really is a good one - you are living proof of that.

Cutting out the footie on Sky or having beans on toast for tea twice a week is not going to help you much.

Moving to a smaller house would.

I'm not saying you should do that, and I'm certainly not criticising you for getting into this situation.

But the reason you are struggling is not because you spend too much on food, or are wasteful of money generally.

It's that damn mortgage.

LillythePink

Hiya

I cna't add much to your thread but to say I totally sympathise with you - you're obviously in Jersey - I am in Guernsey and have some of the same similar issues as in respect of utilities, food prices and the cost of owning a home on our little rocks!

Chin up and pm me if you want to compare notes anytime!

LillythePink

NeverAgain wrote: »

Sparkerly,

The quarter of income rule really is a good one - you are living proof of that.

Cutting out the footie on Sky or having beans on toast for tea twice a week is not going to help you much.

Moving to a smaller house would.

I'm not saying you should do that, and I'm certainly not criticising you for getting into this situation.

But the reason you are struggling is not because you spend too much on food, or are wasteful of money generally.


It's that damn mortgage.

it's not as easy as it sounds being in the CI - downgrading a house would still cost a lot of money, buying it would as would all of the fees that we have to pay (roughly 4.5% of the house price in Guernsey don't know about jersey)

[Deleted User]

My income - £115 - can you look for something else to suppliment this? Even temping one or two days a week might ease the financial pressure a bit (not sure what the options would be where you are though, but might be worth seeing what your options are)
Partners salary - £4501

Total - £4616

Monthly Outgoings:

Mortgage/Rent - £1730.73 - How much is owed and over how long a period? Would it be possible to extend the mortgage term (short term until you are back in work/other debts paid), and then overpay/reduce the term when your finances are stable
Rates (equivalent to council tax) - £42
Gas - £117 - even with one company there are usually different tariffs? Ensure that you are on the cheapest one (often duel fuel and online tariffs are cheaper). Also, turn the thermostat down a degree or two, ensure water heater only on when needed etc
Electric - £78 as above, and make sure appliances are switched off and not standby when not in use, etc
TV License - £12.37
Sky £63.83 - Agree with earlier poster, call and "cancel" and you should get offered a new (cheaper) deal to stay - even if only for 6 months, it'll be worth it
Phone - £55 what does this cover? House phone? Mobiles? If so how many?
Food - £450 this can definately be cut back on esp as you're at home at the moment, shop around, meal plan, batch cook, cook from scratch etc
Car Insurance - £16.25
Petrol - £20 It seems the car doesn't get used that often - is it really worth having to pay maintenance, tax, insurance, petrol, etc for something so rarely used?
Life Insurance - £323.27 Wow - yes, please check that you really need this/it's good value for what you are getting. When your husbands work take over this (how long more to wait?) will they cover all, or only some of this expense? Address/reasses this as a matter of urgency
House insurance - £29.82
Water rates - £29.36
School fees - £725.50
Gym/swim membership - £129.50 does this actually get used?
Zoo membership - £10 (reluctant to give this up as its a nice day out and we only have to go a few times a year for it to save money)
School lunches - £100 including this that's £550 per month on food? Make packed lunches - drop brands and as advice earlier - also go to old style board for hints and tips
Going out/takeaways - £150 Cut back even if you can't cut out completly - (so really £650 spent on food including groceries, and pached lunches? There are definatley savings to be had here - just find the right balance for you and your family)

Blackhorse loan - £322.50 – term 60 months, 38 to go (£12,255) What's the APR?
Gas HP - £59 – term 60 months, 48 to go – APR 0% (£2832) Will this always be 0%?
Elec HP - £58.66 – term 12 months, 7 to go – APR 0% (£410.62) Will this always be 0%?

Total: £4522.79

Well, one Debt (7 months), and insurances will be gone in (6 ?? months) if husbands job covers payment - so you will saving £380 per month then. Then if you can make a saving of £200 from groceries/take aways/packed lunches budget, half the cost of sky, and cancel the Gym, you will have a total monthly saving of £700. So there are things that you can do, and you are lucky that your SOA has movement in it.

As others have recommended follow the link for the full SOA ensuring that all spends are accounted for for a true picture and then you'll be able to make decisions based on that.

HSBC OD - £5,000 APR 11.9% - what's the minimum payment?
First Direct OD - £1,000 APR 14.85%- what's the minimum payment?
HSBC CC - £4868 – APR 11.9%- what's the minimum payment?
HSBC CC (OH) - £7374 – APR 11.9%- what's the minimum payment?

Do you have any savings?

Have you stopped spending on the cards?

Some comments above,

HTH

D9