Advice on money dilemma

clearmydebts

We have approx £14.5K debt. I did our finances yesteday and we don't have a huge amount of money to chuck at the debt every month (maybe £300 at a push) so it will be a long time before it gets paid off. I am expecting baby number 2 in September and we will be okay until my maternity pay runs out in June 2012. I really worry about what we will do after that though, as due to the cut in tax credits, we won't get anything to help towards childcare and I won't ba able to afford to return to work as childcare will cost £1200 and I get paid £1000 for a 3 day week. Effectively then, our outgoings will equal our incomings and we will have no money to pay off debt.

To throw further complications in the mix we are living in the UK but want to return to Ireland (where we are from) as I have been homesick since DS was born 15 months ago. I also worry about how isolated I am going to feel when the second baby is born. I am sociable and do go to mother and baby groups but really want to be around family and friends.

OH is in a good job but he isn't paid as much as he should be. He has recently been offered contract work in Germany for €60 an hour and we are very tempted to go for this after Xmas (when baby number 2 is a few months old).

In one way it would enable us to pay off our debt quickly and I could move home to Ireland and live with my parents for a while (we are very close) and get support with the babies.

In another way though, we would only see OH at weekends and he would miss out on seeing the babies.

He has applied for a job in Ireland (no other jobs there in the last year) and is being given the run around at the moment. I don't see this job happening for at least another year to be honest.

My reasoning is that he could maybe start to do contract work from Jan 2012 with a view to getting a job in Ireland as soon as one comes up.

I really don't know what to do for the best. If we stay here and he stays in his safe job all I can see is us struggling for the next 5 years and me being in a place I don't want to be, with no money. Even if we had no debt we would be to the wire every month.

If we do move we would have money, but the family wouldn't be together. I did say to OH that we could move to some of the places he does contract work in (contracts last about 4-6 months) but he thinks I am being unrealistic.

It would be great to get some input from someone who is impartial.

Thanks

RAS

Hi a full SOA would be a good start, so we can see the picture.

clearmydebts

Have just done one now:

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 941
Partners monthly income after tax....... 1942
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 2964.2
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 850
Management charge (leasehold property).. 113
Council tax............................. 322
Electricity............................. 20
Gas..................................... 50
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 35
Mobile phone............................ 100
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 45
Childcare/nursery....................... 355
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 64
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2366

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
credit card 1..................2650......0.........17.9
credit card 2..................3200......0.........17.9
credit card 3..................600.......0.........34.9
overdraft......................1850......0.........0
credit card 5..................3156......0.........0
credit card 4..................3290......0.........15.9
Total unsecured debts..........14746.....0.........-

Monthly Budget Summary
Total monthly income.................... 2,964.2
Expenses (including HP & secured debts). 2,366
Available for debt repayments........... 598.2
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 598.2
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -14,746
Net Assets.............................. -14,746
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

RAS

Very quick becuase my time is up.

Do you actually have that much left at the end of the month? Wel no because you need to edit it to put in the minimum monthly payments.

clearmydebts wrote: »

Have just done one now:

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 941
Partners monthly income after tax....... 1942
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 2964.2
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 850
Management charge (leasehold property).. 113
Council tax............................. 322 - this is incredibly high - is it right?
Electricity............................. 20
Gas..................................... 50
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 35 - this is high
Mobile phone............................ 100 - this is msssive. If you do not already do it learn Skype and contact family that way.
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400 - you need to halve this
Clothing................................ 0 - you need this
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 45
Childcare/nursery....................... 355
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 64 - you need contents
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 - you need something here
Haircuts................................ 0?
Entertainment........................... 0?
Holiday................................. 0?
Emergency fund.......................... 0
Total monthly expenses.................. 2366

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
credit card 1..................2650......0.........17.9
credit card 2..................3200......0.........17.9
credit card 3..................600.......0.........34.9 - pay this one off first as it is the kiler
overdraft......................1850......0.........0
credit card 5..................3156......0.........0
credit card 4..................3290......0.........15.9 - what is the maximum on this card?
Total unsecured debts..........14746.....0.........-

Monthly Budget Summary
Total monthly income.................... 2,964.2
Expenses (including HP & secured debts). 2,366
Available for debt repayments........... 598.2
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 598.2
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -14,746
Net Assets.............................. -14,746
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

clearmydebts

I have no money left at the end of the month. We throw everything we can towards the debt.

clearmydebts

Anyone any advice?

elsiepac

Hiya

Just to expand on RAS's comments - the point that was being made was that you haven't included allowances for certain things that you should, such as for example, the contents insurance (take some out!) and also presents - I'm sure it's not true that you never buy presents!

You should add in allowances for these so you don't suddenly have unexpected costs one month (e.g. your mums birthday and you have nothing in the present pot to buy a present or even a card with!) and also quite majorly you haven't indicated what the minimum payments are on all your debts - you've just said you spend all the surplus on them which is fine, however you need to snowball them to get the most for your money.

RAS also asked about what the limit was on your lowest percentage credit card - I assume this was to see if you can shift some of the higher percentage debt over to this one, again saving you money in unwanted interest costs.

If you can try and redo your SOA with those bits (and the other areas RAS commented on) updated, then again, you'll get some better advice. Good luck with everything, I'm sure you'll find a solution

LC x

clearmydebts

elsiepac wrote: »

Hiya

Just to expand on RAS's comments - the point that was being made was that you haven't included allowances for certain things that you should, such as for example, the contents insurance (take some out!) and also presents - I'm sure it's not true that you never buy presents!

You should add in allowances for these so you don't suddenly have unexpected costs one month (e.g. your mums birthday and you have nothing in the present pot to buy a present or even a card with!) and also quite majorly you haven't indicated what the minimum payments are on all your debts - you've just said you spend all the surplus on them which is fine, however you need to snowball them to get the most for your money.

RAS also asked about what the limit was on your lowest percentage credit card - I assume this was to see if you can shift some of the higher percentage debt over to this one, again saving you money in unwanted interest costs.

If you can try and redo your SOA with those bits (and the other areas RAS commented on) updated, then again, you'll get some better advice. Good luck with everything, I'm sure you'll find a solution

LC x

Thanks Elsiepac for replying.

I do understand what yourself and RAS are trying to say and can re-adjust it won't be representative of how I budget every month.

With the money left over every month I allocate it at the start of the month towards things like contents insurance (paid upfront every year) and presents. I also pay more than the minimum amounts required for every credit card. So some months I have more money for debts than others. My Virgin card has the highest interest so am concentrating on getting rid of that first. Then it will be OH's credit card as that is the next highest.

I think my main issue or concern is whether or not to carry on struggling and juggling money, or whether to get OH to move into contract work so that we can pay off our debts quickly and reconsider work options then.

katsu

My advice would be: slash some of the costs you do have, like the £100 for mobiles. Read Martin's article on the phones tab - it is really good. RAS suggested skype, I used to use discount dial for calling from a BT landline to an Irish mobile, and also used Rebtel when I was calling mobile to mobile. They were both very good cost savings. You could get cashback for signing up to rebtel from quidco.

Try and work out what a more representative budget would be - for example when you have to buy your annual insurance can you still make all your minimum payments that month? Also, however do you manage for Christmas?

clearmydebts

katsu wrote: »

My advice would be: slash some of the costs you do have, like the £100 for mobiles. Read Martin's article on the phones tab - it is really good. RAS suggested skype, I used to use discount dial for calling from a BT landline to an Irish mobile, and also used Rebtel when I was calling mobile to mobile. They were both very good cost savings. You could get cashback for signing up to rebtel from quidco.

Try and work out what a more representative budget would be - for example when you have to buy your annual insurance can you still make all your minimum payments that month? Also, however do you manage for Christmas?

Thanks Katsu,

Good advice about the mobiles. I think my contract is up this month (need to check) and if is I am going to change to PAYG. OH's still has another few months on it but will get him to do the same.

OH also pays £35 a month for contacts but I think I will get him to cancel this for the time being as he has lovely glasses and it is quite an expense every month.

Re: phones. We get free international calls from BT and I never ring Irish mobiles, or if I have to to (as a last resort) I use the phone checker (one of Martins tools).

I think one area we could cut down on is food, as we spend far too much on it.

We managed Xmas in the past because we had no babies and I was working full-time. I think I will have to start putting some money away every month for it this year.

Another big expense we have is flying back to Ireland. We are going back in July for a family occasion and it is costing over £200. I have told my parents about the flight costs and that we will only manage to come home twice a year from now on (as opposed to 4/5 times)

katsu

Hi - check that the PAYG will save you money - you might need to be disciplined to avoid spending £100+ on top-ups! If you really make that many calls you might need to be on a contract.

If your intl calls are free and you don't call mobiles then how are you spending £100 pcm?

You mention things like OH's contacts and the flights home which are all not in your SOA. I hear what you say about budgeting month by month, but what we are telling you is that you need to be putting by for these expenses some months. I can't work out how you are making your minimums and paying some of these expenses - can you put the minimums in your SOA and go back through your bank statements to see where your money goes and perhaps list out the big expenses like flights and an estimate for Christmas to see what you really have left over for paying your debts?