Hello!! I would really appreciate some help / advice on our ever increasing debts...

flashingbellybar

Hi everyone, I'm Jo. I've finally decided it's time to attack these debts. Originally the credit card debt got built up when me and my OH took a year out travelling in 2007/2008 - we ran out of money in Australia and decided to carry on through Asia as planned but using our credit cards. Unfortunately we came back in the middle of the recession and never managed to really pay them back as we struggled with finding jobs etc. Then I got pregnant and we had our lovely little boy (he's 1 now) - I didn't realise how poor we would be when I was on SMP though and since then, with the huge childcare costs we are getting more into debt every month.

My SOA is below... The one problem I have is that OH is in car sales and does not get a regular salary. His basic is £9k a month and some months he has not sold any cars so has earned that. Plus he HAS to have a company car and pay company car tax. So basically he can earn anything from £800 - £2000 a month. A few years ago he would have the odd £3000 month! But he has just started at a new dealership that is 5 minutes away from home but it takes time to build up your database etc. The last 3 months he earnt under £1000, this month he earnt £1900.

Oh also we owe the tax credits people £4000 from a year of overpayments so we are not entitled to any help from them until that is paid off. I have completed our review and we are not entitled to anything this year based on last year's salary.

I'm so stressed out all the time from constantly being at the edge of our overdraft. There have been a couple of months where we have had to pay our rent on a credit card as we have had no money to pay it on rent day!! Any advice would be so welcome how we can get out of this hole!!

Oh and one more thing, a lot of our "spare" money disappears on little trips to the shop - I do drink a fair amount like everyone else in my family, probably down to being a bit depressed etc... Any advice on how to handle this / cut down would be great! I've tried to estimate it in our entertainment section. This also includes OH's gym membership of £33 a month.

We really don't want to cancel OH's gym membership or the sky TV if possible - we use them SOOO much and would both be so miserable without them.

Thank you in advance :-)

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.................... 2
Monthly Income Details
Monthly income after tax................ 1453
Partners monthly income after tax....... 1400
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 2934.2
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 825
Management charge (leasehold property).. 0
Council tax............................. 150
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 13
Mobile phone............................ 79
TV Licence.............................. 15
Satellite/Cable TV...................... 42
Internet Services....................... 13
Groceries etc. ......................... 320
Clothing................................ 40
Petrol/diesel........................... 280
Road tax................................ 15
Car Insurance........................... 43
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 750
Other child related expenses............ 10
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 25
Presents (birthday, christmas etc)...... 25
Haircuts................................ 18.75
Entertainment........................... 120
Holiday................................. 0
Emergency fund.......................... 25
Total monthly expenses.................. 2953.75

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax Credit Card 1..........3667......100.......0
Halifax Credit Card 2..........3500......25........4.9
MBNA Credit Card 3.............2397.56...51........15
Sofa repayments................1600......50........0
Halifax Overdraft..............1600......31........20
Total unsecured debts..........12764.56..257.......-

Monthly Budget Summary
Total monthly income.................... 2,934.2
Expenses (including HP & secured debts). 2,953.75
Available for debt repayments........... -19.55
Monthly UNsecured debt repayments....... 257
Amount short for making debt repayments. -276.55
Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,764.56
Net Assets.............................. -10,764.56

walby1993

flashingbellybar wrote: »

Oh and one more thing, a lot of our "spare" money disappears on little trips to the shop - I do drink a fair amount like everyone else in my family, probably down to being a bit depressed etc... Any advice on how to handle this / cut down would be great! I've tried to estimate it in our entertainment section. This also includes OH's gym membership of £33 a month.

We really don't want to cancel OH's gym membership or the sky TV if possible - we use them SOOO much and would both be so miserable without them.

Thank you in advance :-)

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.................... 2
Monthly Income Details
Monthly income after tax................ 1453
Partners monthly income after tax....... 1400 Is this an average? Do you put any "extra" money aside when your OH earns more than this to cover the months when he earns less?
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 2934.2
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 825
Management charge (leasehold property).. 0
Council tax............................. 150
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 13
Mobile phone............................ 79 This seems high? Could this be cut down at all?
TV Licence.............................. 15
Satellite/Cable TV...................... 42
Internet Services....................... 13
Groceries etc. ......................... 320 Again, this seems rather high. I don't know how much food, nappies, etc cost for babies but as a guideline me and DH spend around £180 per month. I would say you could cut at least £50 from this.
Clothing................................ 40 Could this be cut down a bit? I understand babies are always growing but could you and OH temporarily stop buying clothes?
Petrol/diesel........................... 280
Road tax................................ 15
Car Insurance........................... 43
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 750 I understand that this is necessary so you can work but is there anyone around who could help out with childcare to reduce this, even just half a day a week?
Other child related expenses............ 10
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 25 What is this?
Presents (birthday, christmas etc)...... 25
Haircuts................................ 18.75
Entertainment........................... 120 This definately needs to be cut back. What is your typical "entertainment" so I can suggest cheaper versions.
Holiday................................. 0
Emergency fund.......................... 25
Total monthly expenses.................. 2953.75

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax Credit Card 1..........3667......100.......0
Halifax Credit Card 2..........3500......25........4.9
MBNA Credit Card 3.............2397.56...51........15
Sofa repayments................1600......50........0
Halifax Overdraft..............1600......31........20
Total unsecured debts..........12764.56..257.......-

Monthly Budget Summary
Total monthly income.................... 2,934.2
Expenses (including HP & secured debts). 2,953.75
Available for debt repayments........... -19.55
Monthly UNsecured debt repayments....... 257
Amount short for making debt repayments. -276.55
Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,764.56
Net Assets.............................. -10,764.56

Hi, and well done for deciding to tackle this head on! I have made a few comments on your SOA with some suggestions. You mention that you drink quite a bit, probably down to the stress of your financial situation. However, as you know, alcohol is quite expensive so could be a big area to save on moneywise. My mum went through a stage of drinking a bit because of stress and she cut down bit by bit. So for example, instead of half a bottle of wine every evening she cut down to just 1 large glass an evening, then to 1 small glass, then 1 small glass a couple of times a week, etc.

Hope this is of some help x

jade-evie

You could definitely bring the groceries down- £320 a month is nearly £74 a week!

Could your OH walk or cycle to work as it's nearer?

I totally empathise with the nursery costs- we are in the same boat; our daughter has just become eligible for 15 hours a week free as she's 3 and half... roll on 4 and half when they start school eh! Have you looked at whether a childminder might be cheaper? Do your employers offer childcare vouchers?

flashingbellybar

Thank you so much for your replies!

I know that bringing the groceries down is definitely possible, I don't actually know how much we spend, I guess I need to keep a spending diary for a month or something. But realistically yes, it is at least £80 a week, more if you include the alcohol! We shop at Asda (home delivery) and buy mainly own brand stuff. We don't cook from scratch much though, mainly frozen stuff, pasta & sauces etc. Recently we have both been pretty miserable so have been buying those 'takeaway' dinners from tesco's and the like to cheer us up when we haven't got the energy / motivation to cook much. I know it's bad! I don't know where to start with meal planning and stuff though, it is a bit overwhelming.

walby1993 - thank you for your suggestion on the drink, I can definitely do that! Although I will be starting from a bottle a night and cutting down from there! :eek:

And on your other points...

Yes OH salary is an average, we haven't been putting extra aside . TBH, this is the first month he has earnt over £1300 this year and prior to that I was on SMP so there was no extra. Just a smaller amount of negative! Hopefully he will be consistently a bit higher now though so I guess we really do need to put some aside :embarasse.

Mobile phones - unfortunately we are tied into Iphone contracts until next year.

Clothes - we are going to try not to buy any more this year, that was an average as we both had to buy new work clothes this year (suits). We hardly ever buy casual clothes, just work stuff when ours is worn out. We try and source free/cheap secondhand baby clothes & toys wherever possible.

Childcare - he is at nursery 2 x days a week, at a friends house 2 x days a week and we pay her £25 a day cash. She can't do more days :-( we have no family near us and all of my friends work full time and are childless! I have really struggled to cut any more off this. We do have child tax voucher things that mean £243 of the nursery bill is tax free out of my wages.

The other insurance is private medical - I get it free through work and I have added my son on at around £20 a month. We do get a rebate back every year though of around £100 - £200 I think if it is unused.

Entertainment of £120 basically covers OH gym at £33 a month and our alcohol / "takeaways" - pretty much our 3 x times a week trips to the local co-op for beers and ready meals when we are feeling down. We can't think of any cheaper ways to treat ourselves / cheer up??

OH car - he HAS to have a car for work, it's a requirement of being in car sales - they must have a demo to take people out in for test drives etc. I need a car as I ferry our son around to childcare and also work 12 miles away near no public transport. We are trying to sell our car and get something cheaper tho as it is very expensive to run, costs me roughly £20 every couple of days in petrol even though I only do around 20 miles a day.

walby1993

Hi flashingbellybar!

I think a spending diary would definately be a good idea as it will help you see exactly where the money is going.

At the moment, it looks like groceries and entertainment are the biggest areas you are able to cut down on. In terms of menu planning, I find it absolutely essential. DH and I sit down on a Saturday morning, write a list of 7 dinners for the week then work out what we need to buy to make these dinners. If you are not in the habit of making things from scratch maybe start off with having a look at cookery books (free from the library of course) or recipes online (I recommend bbcgoodfood.com). Go for easy to cook meals until you get the hang of it. I also batch cook so that we have our own "microwave" meals when we are too tired to cook (e.g. I cook enough bolegnaise sauce for 4 dinners, use 1 at the time and then freeze the other 3 portions).

It doesn't matter where you are starting to cut down alcohol-wise, as long as you are making steps in the right direction . As an added motivation, my mums skin looked so much better and she said she had more energy!

Walby

Soubrette

An exercise I think is sometimes useful is writing down your income and then writing down a list, in order of importance (to you), of the things you pay for - when the money runs out, draw a line. Everything under that line needs to be either zero or paid for by cutting down on things above that line.

It means that we have to consider what is actually important to us, for example your OH's gym membership or having your little boy on BUPA or cutting down on ready meals or alcohol.

No one else can decide what is crucial to you and your family except you, all we can say for certain is that some things needs to reduced or cut out. Remember that anything cut out now can always be added back in when you have more money.

For cooking from scratch I can't recommend the old style part of this board enough.

Look on the freebies part of the board for things like free cinema tickets (take your own drink and sweeties ) for a cheap night out and other freebies.

Look on the ebay board and up your income and see if there is anything else you can do or sell if you want something special or is not in the budget.

It might be worth seeing your GP about depression or if you're more of a self help girl then why not start a diary to a) keep you focused and b) remind yourself how things are improving.

Also might be worth joining some challenges. Money saving can be fun rather than just a never ending grind.

toothfairybuttkicker

Well done on tackling this head on

Your rent seems a little excessive. Is there any way you could relocate to cheaper property?

If you could shave £150 off this, sell the second car (saving loads) you could ineffect give up your job and find a local evening job around OH hours. You could be emotionally richer if not slightly finacially richer (tax credits!!)

As others will probably say groceries, sky and Gym all need looking at. Unnecessary trips to the shop (in the car) need to be knocked on the head. I know its tough but it does need to be done

xx

flashingbellybar

Soubrette wrote: »

An exercise I think is sometimes useful is writing down your income and then writing down a list, in order of importance (to you), of the things you pay for - when the money runs out, draw a line. Everything under that line needs to be either zero or paid for by cutting down on things above that line.

It means that we have to consider what is actually important to us, for example your OH's gym membership or having your little boy on BUPA or cutting down on ready meals or alcohol.

No one else can decide what is crucial to you and your family except you, all we can say for certain is that some things needs to reduced or cut out. Remember that anything cut out now can always be added back in when you have more money.

For cooking from scratch I can't recommend the old style part of this board enough.

Look on the freebies part of the board for things like free cinema tickets (take your own drink and sweeties ) for a cheap night out and other freebies.

Look on the ebay board and up your income and see if there is anything else you can do or sell if you want something special or is not in the budget.

It might be worth seeing your GP about depression or if you're more of a self help girl then why not start a diary to a) keep you focused and b) remind yourself how things are improving.

Also might be worth joining some challenges. Money saving can be fun rather than just a never ending grind.

Thank you this is great advice about the list! We have been trying to sell things on ebay but don't really have that much stuff to sell TBH that is actually worth something. Every little helps though I guess.

I like the idea of money saving being fun, we really think of it as a never ending grind and I know OH gets really fed up every time I mention 'saving money'! We are both pretty competitive though, maybe I can get him interested in some sort of competition to make it a bit more fun.

dumpy

flashingbellybar wrote: »

We really don't want to cancel OH's gym membership or the sky TV if possible - we use them SOOO much and would both be so miserable without them.

This jumped out at me, and I thought but how miserable are you going to be when the debt gets bigger and bigger? Is watching TV that important?

The Old Style board can help with meal planning and cutting food costs. Although it can seem a bit of a ordeal to plan the week in advance it actually is such a time and stress saver.

You come in, and start cooking, no wondering what to have, no looking for ingredients you've forgotten to buy, no giving up and ordering a takeaway. No time or money wasted.

I also batch cook, massive lasagnes that get frozen in individual portions and some weeks I'll plan in a "day off" when I just shove one of those in the oven.

You could make your own sauces, much healthier and cheaper.

dumpy

Just noticed you said you are both competitive.

How about the no spend day challenge? You could compete against each other.

flashingbellybar

toothfairybuttkicker wrote: »

Well done on tackling this head on

Your rent seems a little excessive. Is there any way you could relocate to cheaper property?

If you could shave £150 off this, sell the second car (saving loads) you could ineffect give up your job and find a local evening job around OH hours. You could be emotionally richer if not slightly finacially richer (tax credits!!)

As others will probably say groceries, sky and Gym all need looking at. Unnecessary trips to the shop (in the car) need to be knocked on the head. I know its tough but it does need to be done

xx

Yes the rent is a lot, ufortunately we live in a really expensive area (near stansted airport). We have a 3 bed house slightly outside of town for £825. If we were to downsize to a 2 bed flat, they are all £750 a month plus with only 1 car space. So it seems silly to lose all that space and our garden etc for such a small amount. However, I have managed to find someone to rent our second bedroom for £350 a month incl bills and she is happy to live with our 1 year old. She moves in next week...

I can't give up my job (and don't want to, it keeps me sane!) OH has had a few months recently after starting his new job where he has only earned around £750 - if it wasn't for my job, we wouldn't even have been able to pay the rent. I consistently earn just under £1500 every month whereas he can be £750 - £2000. Plus my job grade is being reviewed at the moment and I am hoping for a payrise of at least £3k in a month or two.
He can't give up because he will hopefully have big months (when he's been there a bit longer) when he earns £3000 plus - he did this quite a bit before we went travelling. So it's his big months that will pay big chunks off our debts eventually - it's just getting through the next couple of years until his customer base is established.

Unnecessary trips to the shop definitely need to go, I totally agree...