My SOA

UKPeach

Hi all. I'm new to the forum although I have been lurking for some time. My husband and I have alot of debt. I can't honestly say why because we don't live extravagantly in our daily lives. I'm embarrassed, to be honest, and I want to end this now. I have done out statement of affairs and here it is:

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 2382
Partners monthly income after tax....... 700
Benefits................................ 134
Other income............................ 0
Total monthly income.................... 3216
Monthly Expense Details
Mortgage................................ 538
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 72
Electricity............................. 49
Gas..................................... 47
Oil..................................... 0
Water rates............................. 37
Telephone (land line)................... 28
Mobile phone............................ 40
TV Licence.............................. 12.37
Satellite/Cable TV...................... 23
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 50
Petrol/diesel........................... 260
Road tax................................ 21
Car Insurance........................... 56
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 59
Contents insurance...................... 0
Life assurance ......................... 47
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 40
Entertainment........................... 80
Holiday................................. 100
Emergency fund.......................... 25
Total monthly expenses.................. 1924.37

Assets
Cash.................................... 0
House value (Gross)..................... 95000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 98000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 68000....(538)......2
Total secured & HP debts...... 68000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
M&S............................3000......70........18.9
Barclays.......................10700.....245.......0
Halifax........................4500......46........0
Wesleyan.......................9000......357.......7.6
Total unsecured debts..........27200.....718.......-

Monthly Budget Summary
Total monthly income.................... 3,216
Expenses (including HP & secured debts). 1,924.37
Available for debt repayments........... 1,291.63
Monthly UNsecured debt repayments....... 718
Amount left after debt repayments....... 573.63
Personal Balance Sheet Summary
Total assets (things you own)........... 98,000
Total HP & Secured debt................. -68,000
Total Unsecured debt.................... -27,200
Net Assets.............................. 2,800
Created using the SOA calculator at wwwdotmakesenseofcardsdotcom.
Reproduced on Moneysavingexpert with permission, using IE browser.

It looks like we have alot of spare cash knocking around, but we haven't. We cut into our overdraft this month and last month, and when that happens, it's bad. The SOA has scared the pants off me, because I realise that if anything should happen to either or both of us, we are leaving our children with nothing.

I have been reading Dave Ramsey's Total Money Makeover, which appeals to me (I don't know if any of you are familiar with it). However, the first step is to bank £1000 for emergencies. We are so strapped for cash I don't know where to begin. I have tried to address this with my husband but he thinks I'm nagging him and he doesn't seem to understand how very terrified I am at this point. I don't think it's that he doesn't care; I think he's having an ostrich moment and is hoping that if he ignores it, it will go away. I have asked him about working a couple of extra shifts at work this month while I'm not working (school holidays) and about doing a car boot sale. Neither of these things have happened yet and I honestly don't know if they will.

Where do I begin? How do I get my husband on board without him hiding or me sounding like a nag? Please help. Any and all advice welcome.

~Beanie~

If you are saving into an emergency fund then you should have some cash which I can't see listed in the assets section?

Secondly, if you really don't have £500 surplus per month as stated above then you must have things missing from your SOA. I would suggest that you try keeping a spending diary for a month or two and write down everything that you spend, magazines, the odd pint of milk, snacks etc. That should soon highlight where your £500 is going.

Tebheag

Hi I would recommend going through bank statments to see where your money has actually gone as sounds like you do not know.
Keep a diary from now on so that you can list all the amounts spent.
Do you really spend £1200 a year on holiday ?
£200 a month only on food great if you do but I very much doubt it as all these little trips to shop to buy bread milk all add up.
Car Maintance £20 for 2 cars ?
Entertainment of £80 does not sound like much for a family ?
Good luck first step is to find oput where all the missing money is going then start getting cards paid off.
Good Luck

UKPeach

Thanks for the advice. I've had a look at our bank statements recently and there alot of ATM transactions with no explanation as to where the cash goes. I will start keeping a diary from today to track closely where our money is going.

Looking back at the SOA, it's clear there are things missing: my kids' taekwondo lessons (£60) and swimming lessons (£26), daughter's pocket money (£30 - she earns this via chores). My husband does most of the maintenance on our cars himself so with the exception of big things (like the clutch - which he can't replace) our car maintenance is minimal. I really do spend £200 (sometimes less) on food. We have an allotment and grow most of our own vegetables, our chickens give us eggs, and we get our fruit from another allotment holder as long as we are willing to go and pick it ourselves.

I don't know why I put £50 in the emergencies category, because we have no cash in the bank at the moment.

Yes, we really do spend £1200 for our holidays. We alternate cheap holidays (camping) with more expensive we-have-to-fly-somewhere-to-get-good-weather holidays. I don't know how to respond to this. We work hard during the year and look forward to our summer holiday every year, although perhaps I am underestimating and we spend more on this than I have budgeted for.

DS4215

Why not set up a couple of accounts - one for emergency fund, and one for holiday fund and transfer the money across monthly by standing order. If you put it in an account and keep the ATM card hidden at home (some people suggest freezing it in an ice cube) then the money will build up until you need it.

As the others have said a spending diary will show where the money is going, but your OH may not want to do that if his head is still in the sand. Could it be things like lunches at work, or the odd pint on the way home?

myhonestanswer

Hi, I agree with all the others. If your SOA says you have that much spare cash, and in reality you have none, you are spending a lot more than you think. 573 left over at the end of the month that you can't account for is nearly 20 quid a day! Surely you can't be spending that in cash (well you can, but you can't be spending that in cash and thinking you're not), so you need to look at your direct debits etc and see if there is anything you're missing.

Off the top of my head: sky, lovefilm, charity donations, are you spending more on your mobiles than you think, what about kids lunches? Does the 200 for groceries include all meals out of the home - ie packed lunches for work, snacks, on car journeys?

You've done really well to get it all down, you just need to find where that other money is going.

Also, with your husband, I'd lead by example. You say you've been asking him to do a car boot but it hasn't happened. Why not just do it yourself? Prove to him that you think this is a problem worth solving. I'd also tell him plain that you are really worried about this, and you need his support. Tell him seriously that you think you are in a mess, and you need to get out of it together.

Finally, the Dave Ramsay suggestion of 1000 for emergencies sounds good in principle... But I found if I had money left over it made me spend more (just because I knew it was there), and that also, I felt better overall if I could see the money coming off debt. So do whatever works better for you. For me, the motivation of seeing the debt go down meant the most to me, and I think I was able to clear things off quicker because of it. Now I have my emergency money saved and then some. Good luck!

getmore4less

As with most peoples SOA it does not match reality

It takes time to remember all the spends and find out where the mising money is going.

I recommend a look back over 12 months to try to find where previous spending was and the spending diary to make sure the cuurent reality is reflected with the SOA.

Look at total debt 12 months ago and now and add in all income over the 12 months and start looking at statements to find where it has all gone.

Current SOA is nearly £600 short and in reality if debts have been going up more.

eg holidays does the £1200 cover verything, insurance, spending money, holidays costs, parking etc.

If you have cash withdawels and can't remember what it was spent on stick a line on the SOA for that.

Bought any white goods, furniture, TV, electronics etc.

Even doing it yourself car maintanence needs parts ask hubby what the spends have been over the last few years, tyres come round every few years a few £100s, £20pm looks a bit low

Also you need to start a fund for car replacement.

This stood out.

Buildings insurance..................... 59
Contents insurance...................... 0


£720 is a lot, are you just renewing when asked?

Bog standard £500k rebuild, £50k contents is probably around £300py £25pm, less if you get cash back.

Get on a comparison site so you have some idea for renewal time.


Overdraft is missing from the SOA.

Have a think about the £27k debt any big items in there that should have been saved for, think about the next time you might need something similar, savings line on the SOA.

Make sure you have all the interest rates and look at Snowballing

I would think a good target would be £1kpm to aim at the debts.

that would split the cuurent missing £600 1/3 debts on top of the £700 already accounted for and £300 to flesh out the actual spending.

Tebheag

UKPeach wrote: »

Thanks for the advice. I've had a look at our bank statements recently and there alot of ATM transactions with no explanation as to where the cash goes. I will start keeping a diary from today to track closely where our money is going.

Looking back at the SOA, it's clear there are things missing: my kids' taekwondo lessons (£60) and swimming lessons (£26), daughter's pocket money (£30 - she earns this via chores). My husband does most of the maintenance on our cars himself so with the exception of big things (like the clutch - which he can't replace) our car maintenance is minimal. I really do spend £200 (sometimes less) on food. We have an allotment and grow most of our own vegetables, our chickens give us eggs, and we get our fruit from another allotment holder as long as we are willing to go and pick it ourselves.

I don't know why I put £50 in the emergencies category, because we have no cash in the bank at the moment.

Yes, we really do spend £1200 for our holidays. We alternate cheap holidays (camping) with more expensive we-have-to-fly-somewhere-to-get-good-weather holidays. I don't know how to respond to this. We work hard during the year and look forward to our summer holiday every year, although perhaps I am underestimating and we spend more on this than I have budgeted for.

Hi Sorry i did not mean anything apart from was that the figure you spent we used to go on holidays but would end up spending double the amount sometimes as i never accounted for day drips eating out buying stuff to take home.
We used to have plenty of cash and i could always get loads of overtime when ever we needed more was only when i had to reduce hours due to baby and pay childcare that we realised how bad we where for spending !

Little_Miss_Uni-Debt

Everything you think of needs to go in your SOA. Keep re-doing it until it's true to what you spend.

The amounts you have put in for annual stuff - TV license, MOT, car tax - are you actually saving these separately each month in a pot somewhere?

Your monthly income is a fantastic amount to have coming in. In theory you could be slicing £500 off a debt every month! That's even before you cut back on your monthly spend on presents, entertainment, satellite TV etc etc.

If you stripped back to the bare essentials even for a few months - bills, food and £150 for luxuries/extras you should still have £750+ to put towards your debts AFTER minimum payments!!!

3 years and it would all be gone and that's keeping £150 luxuries each month!!!

Go through a few pages of bank statements and write down what type of transactions are coming out. You then need to look at ways of fixing those areas. i.e if it's cash withdrawals all the time - give yourself a weekly cash amount and leave your cards at home. If it's annual large payments that are showing up on the statements then you need to put aside monthly.

You need to know where every £1 goes!

Also you have a lot of round numbers in your debt figures. You need to get accurate and upto date figures else any calculations you do will be out.

Little_Miss_Uni-Debt

I've actually put your current figures through the snowball calc at this website http://www.whatsthecost.com/snowball.aspx

Even before you cut anything out - based on if you stuck to your current SOA and paid things in the right order you could clear your debts in 22 months. :eek:

OR way quicker if you start cutting back.

You have an amazing chance here to get rid and start fresh really quickly.

Let me know if you want to see the snowball details and I can post the image up here if you're interested.