Finally trying to clear my debts but need some advice

Tixy

Well the good thing is it does look like you should be able to meet minimum payments and shouldn't need to be going over your overdraft limit (are you going over at the moment because or actually running out of money or is it more an issue of not keeping track/control of it?).
But hopefully if you can find some areas to cut back you can clear them even quicker.

trinity4mum wrote: »

Here's my SOA
Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 4
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1500
Benefits................................ 467 - are you getting everything you are entitled to in terms of tax credit etc?
Other income............................ 0
Total monthly income.................... 1967

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 75
Rent.................................... 0 do you live on a base?
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 75 this looks quite high - are you in arrears? have you tried shopping around to see if you can find a cheaper supplier or a more suitable tariff?
Gas..................................... 75 also looks a little high.
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 30
Mobile phone............................ 40
TV Licence.............................. 13
Satellite/Cable TV...................... 30 could you look to see if you can get a cheaper deal from them? or look to combine with landline & internet for a cheaper deal all in?
Internet Services....................... 0
Groceries etc. ......................... 500 this looks quite high even for a family of your size. Is this an estimate or what you actually spend? I would think you should be able to reduce this down to £400 and still manage well. Quite a lot of tips on the old style board about reducing grocery costs and ideas such as the drop a brand challenge.
Clothing................................ 0 probably need to budget for this, try to work out annual spend on everything, kids uniforms etc and then budget 1/12 a month.
Petrol/diesel........................... 200 is this all essential miles? do you try to drive efficently (ie slowly and boringly!)
Road tax................................ 15
Car Insurance........................... 49 do you shop around at renewal?
Car maintenance (including MOT)......... 10
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 85
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30 is this something specific? would a prepay certificate be cheaper?
Pet insurance/vet bills................. 7
Buildings insurance..................... 0
Contents insurance...................... 40 looks high for just contents insurance - try shopping around? or is it high because you live on a base?
Life assurance ......................... 15
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 0 probably need to budget for this
Entertainment........................... 0 and a little something here (kids activities etc)
Holiday................................. 0
Emergency fund.......................... 100 are you actually saving this at the moment?
Overdraft interest ..................... 70 is this interest or fees?
Hospital appointments................... 150 I take this is unavoidable? is it likely to continue long term?
Total monthly expenses.................. 1669


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 10000
Other assets............................ 0
Total Assets............................ 10000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 900......(75).......0
Total secured & HP debts...... 900.......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest Overdraft..............5000......50........19.9 is this £50 on top of the £70 above?
Natwest Credit Card............1800......40........16.9
Vanquis Credit Card............1000......30........45.9
Very...........................1300......65........29.9
Next...........................750.......38........29.9
Capital One....................500.......15........29.9
Total unsecured debts..........10350.....238.......-


Monthly Budget Summary
Total monthly income.................... 1,967
Expenses (including HP & secured debts). 1,669
Available for debt repayments........... 298
Monthly UNsecured debt repayments....... 238
Amount left after debt repayments....... 60

Personal Balance Sheet Summary
Total assets (things you own)........... 10,000
Total HP & Secured debt................. -900
Total Unsecured debt.................... -10,350
Net Assets.............................. -1,250

Created using the SOA calculator
Reproduced on Moneysavingexpert with permission, using Firefox browser.

trinity4mum

In reply:

Water/rent/Council tax comes out before pay as we live on camp.
Electric/Gas is high as a) we are in arrears b) Our camp house is old, poorly insulated, and it is extremely cold up here so we have the heating on a lot.
Groceries are high because I have to buy mine and then my husband has to buy his own and pay mess food whilst away.
Car insurance - I shop around every year and that's the cheapest I got this year.
Medical - I never thought of that.
Contents - High because it includes special forces Kit insurance etc.
Emergency fund - I have a standing order to transfer it to savings at the beginning of the month, but I do end up spending it.
Overdraft interest - what I am being charged by Natwest every month.
Medical - Long term unfortunately, as I have to take my daughter to a lot of hospital/doctor appointments.

trinity4mum

The natwest overdraft of £50 is what I pay off every month in addition to the interest.

trinity4mum

And as for the petrol, I drive to the speed limit etc, but we live on a camp in the middle of nowhere - it's a 25 minute drive each way to the local small town.

getmore4less

OK probably worth looking at the other bits and bobs to keep the spending down and in control

but the area that needs attention is the debt profile.

Unsecured Debts
Description....................Debt......Monthly.. .APR
Natwest Overdraft..............5000......50........19.9 is this £50 on top of the £70 above?
Natwest Credit Card............1800......40........16.9
Vanquis Credit Card............1000......30........45.9
Very...........................1300......65....... .29.9
Next...........................750.......38....... .29.9
Capital One....................500.......15........29.9
Total unsecured debts..........10350.....238.......-

What are the limits on the cards?

These are all high rates expt natwest and there is not a lot of spare money around so one approach is to look for reducing the rates.

One option is to use the low rate cards up to their limits(DO NO GO OVER) and using the money to hit the high rate debt.

When was the last time you got a CC?
whats the credit situation any missed payments or CCJ

I would look for a new spending card with a long 0% period
and/or a Ballance transfer card with long 0% or a low lifetime rate.

http://www.makesenseofcards.co.uk/
Tesco lubcard CC has 15 months on puchases and a 1% min payment.

MBNA has 15 months with 0% and 2.75% fee.

A card with only a couple of K would get the rates right down and make the money work that bit harder.

I like the 0% purchase because there are no fees and you use normal spending, this would tackle the vanquis very quickly and then the very,nex,capital one would follow quickly.

This one time a consolodation could be a great benifit.


Don't go trying for a CC just yet, give a bit more info on the likely credit situaton and think about how it works
part of a procss called snowballing
have a good read of articles on how to tackle debt
http://www.makesenseofcards.co.uk/g_debt.html
http://www.makesenseofcards.co.uk/g_debtfree.html

The trick is gaining control and understanding how you are going to achieve the goal of becoming debt free

just relaised this one is a real problem the interest alone is probably more than £30pm
Vanquis Credit Card............1000......30........45.9

getmore4less

Can you break down the costs on the hospital line.

It might be there is some help you can get for some of those.


What car do you have, there may be some options there but changing is usualy not cost effective but with high insurance it might be worth loking at somethng.


If you are normaly spending the £100 emergency then this is not really happening and somewhere esle on te SOA is under.

Spending diary to try to ientify where the money is really going.

Do you need nursery if not working? (sorry if I missed why)

I would review the communications/TV might be able to squeeze that a bit. OK need to call hubby when away but internet VOIP is cheap and can be video.

Can you breakdown the groceries into home costs and mess costs(with the time away that covers) It will be easier to see what can be trimmed off home costs.


Is the op allowance in the £1500 take home or is thee some more to come for 4 months?

AllThatStuffIsJustStuff

As getmore4less said, try and get a 0% credit card deal. Virgin are still offering 18months with only a 2.7% fee. It also has a minimum repayment of just 1%, meaning you can redirect your payments on the remaining higher nterest debts. I did this recently and it is saving me over 500 over the life of the offer and my previous rate was lower than most of yours. I knew it was a great deal when the transfer fee was less than one months interest on the previous card

If you could get the four high rate cards you have transferred you would be in a much better position. It depends on what limit they will give you though. If you could get all those over then the £3,550 debt would only require a minimum payment of £35 a month. If you can keep paying what you currently are you can make a more significant dent in your overdraft over the same period.

I agree you can probably cut your grocery bill bit. A mixture of value brands, bulk buying and clever cooking can shave a good chunk off your costs.

Well done on deciding to tackle your debts and good luck.

trinity4mum

I see what you mean with the emergency, but I didn't realise on the SOA I was supposed to put what I am paying on the credit cards as it said minimum.

The last time we got a credit card was over a year ago, but I have a very poor credit rating (hence the vanquis) and I don't think my husband would get a better rate card as he applied for one at the beginning of the year with a low apr and was declined, as was he when we tried to get a consolidation loan.

We cannot change the car as with 4 children in car seats I need a big car, and ours is actually good on petrol it's just that living somewhere so remote is expensive.

As for the nursery, I don't really want to justify it. Yes I am not working but my toddler is a handful. I send her 2 mornings a week so I can have a bit of time with my baby and to get on with housework, and for my mental health nurse to come and visit me without her charging around screaming. It is expensive but it's the cheapest around here and it's on camp so I don't have to drive.

The op allowance is to come on top which is why I can finally see a way around paying off the debts.

The cards are all at their maximum as I've recently paid off some and got the amounts lowered, that way I'm trying to start afresh with paying them off.

Thank you for your help, I will try the spending diary, and now that my husband is away I should be able to cut some off the grocery shopping.

getmore4less

The SOA is to reflect real income and outgoings

With the CC the reason the min payments are used on the SOA is to allow the surplus for the snowball on the most costly debt.

Only the highest APR should get more than min payment

If you are paying more on others itemise it BUT rethink your stratagy

No point in trying to get the OD or a CC with <20% interest down while you have the 45.6% debt that needs paying

I know you have been decreasing limits which ones did you do and by how much? There may be room to adjust the cheaper cards back up.

Might be too early to look at new applications.

As for justifying a spend you don't have to(to us) it's more about you taking another look to see if there is something you can do, so justifying it to yourself against other priorities.


As I said it is about getting control the SOA needs to be realistic with the income and with the spends it is your window on finances to take control

You also need to think ahead with the costs you are going to have or are allready having, if you manage to spend less that's great but if the number is too low it won't add up and there will be a shortfall(more debt)

The key is to get a stable spend pattern that means the debt will not go up.

Find spare cash to throw at the high cost debt

focus on the vanquis first.

Now I know this may not be something you want to look at but is there any help you can get through the service perhaps getting the 4 month payment in a lump sum early or some kind of hardship loan.

How much will the op allowance be so we can look at a plan for it

DS4215

How much is the OP allowance? - Throw as much of it as you can at the Vanquis card, then Capital One, Next and Very along with what you have extra from not paying the cards you've cleared.