Advice and motivation for SOA please!

outta_the_tunnel

Hello all,

I've been battling a mountain of debt for the last 3 years and have made some good progress, but lately I seem to have run out of steam and need some help and motivation to get moving again. Having been a long time observer at MSE I thought it was time to take the plunge and seek some of the excellent advice and support I read on a daily basis.

As a quick summary, a grenade was thrown into my life three years ago when my then wife decided that she needed something different and headed off for a future elsewhere. I made the decision to try and take on the family home and shared care of our two ace boys despite a hefty mortgage and considerable debts. Life has obviously had to change a bit however I am still here battling on and really want to break free from a life of debt so that I can stop worrying and start living life again. Most importantly though I want to be able to offer my little boys a future. Thankfully they are happy little souls who don't want for a lot and love spending time with daddy

So far nearly £35,000 of debt has been eliminated and whilst the SOA may not look too bleak and I am lucky to have a good job I am in the position that the mortgage is a massive millstone as I come off a fixed rate early next year and it is unlikely that I will be able to refinance leaving me in a vulnerable position once interest rates start to rise! Currently my income would not allow me to get the level of mortgage I have.

The main focus is to get rid of all my credit card debt so I can reduce my mortgage balance and LTV in the hope that I can get a new deal in the not too distant future.

Any help greatly appreciated.


Revised Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2682 - includes car allowance
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2682

Monthly Expense Details
Mortgage................................ 900 - interest only payment of £840 with £60 o/p on a monthly basis
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 85
Electricity............................. 97 - dual fuel for gas and elec
Gas..................................... 0
Oil..................................... 0
Water rates............................. 30 - just reduced following meter reading
Telephone (land line)................... 13
Mobile phone............................ 35
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 10
Petrol/diesel........................... 150
Road tax................................ 20
Car Insurance........................... 25
Car maintenance (including MOT)......... 60
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 360 - CSA payments
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 17
Buildings insurance..................... 23
Contents insurance...................... 0
Life assurance ......................... 14
Other insurance......................... 13
Presents (birthday, christmas etc)...... 10
Haircuts................................ 5
Entertainment........................... 200 - average £50.00 per wk for general living
Holiday................................. 50
Emergency fund.......................... 50
Children's Activities................... 35
Total monthly expenses.................. 2430


Assets
Cash.................................... 830 - emergency fund
House value (Gross)..................... 230000
Shares and bonds........................ 360
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 234190


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 182000...(900)......5.49
Total secured & HP debts...... 182000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................3329......35........0
Post Office....................570.......20........0
Total unsecured debts..........3899......55........-


Monthly Budget Summary
Total monthly income.................... 2,682
Expenses (including HP & secured debts). 2,430
Available for debt repayments........... 252
Monthly UNsecured debt repayments....... 55
Amount left after debt repayments....... 197 - revised from initial £341 shown initially (this surplus is normally thrown at credit cards)

Personal Balance Sheet Summary
Total assets (things you own)........... 234,190
Total HP & Secured debt................. -182,000
Total Unsecured debt.................... -3,899
Net Assets.............................. 48,291

166million

I'm not party to these things but, how come you pay that much CSA if you are joint carer for your children? You seem to have quite a bit left after debt repayments, what are you currently doing with this? I'd suggest re jiggling your budget to see how much you can realistically throw at the credit cards, and then sit down and work out what to do with the mortgage once these are gone. Good luck x

outta_the_tunnel

Thanks for the reply. Regarding the CSA, they use a nights based calculator so whilst I have the children 7 days in every 14 (including 75% weekend time) I do not have them equal nights. Unfortunately I am branded a non resident parent by the CSA and as such liable for maintenance payments. I take the view that it is just money and some of it hopefully gets spent on the boys.

The spare money each month gets thrown at living costs, emergency fund or credit card overpayments.

NeverAgain_2

As you say, far from bleak.

How much is in your £50 a month emergency fund?

No point in having savings when you have £3,500 on an MBNA credit card.

I think your mortgage outlook is not as poor as you say it is.

The payment is about a third of your income, which is a little high.

But you have some equity, a decent income, and little in the way of other debt, so I see no reason why you shouldn't qualify for one of the better fixed-rate deals.

I don't know much about mortgages, but I've heard of fixed deals of around three per cent, which is almost half your current rate.

Cyril

No real advice just wanted to say what a fantastic Dad you sound.

outta_the_tunnel

Never Again - thanks for your comments. £800 is currently in the emergency fund. For some reason I find it more motivating to save so as the MBNA card is on 0% was going to try and save up to pay it off, if that makes sense!

I can't get the income multiples to re-mortgage so will be stuck with NR deal until i reduce the balance hence wanting to focus on this area. If interest rates stay low I will be fine in the short term.

Cyril - thanks for that its not always easy, but of everything in my life its the most rewarding thing seeing the boys happy

LianneH

what a fab dad you are!

do you really have £341 left at the end of the month? if you do then it would only take about a year to clear the whole unsecure debt? looking at your SOA, i think you have most things covered and guess that things like children's activities are essential? if you could cut any of these, like say the entertainment budget of £200, then thats over £500 you could throw at your debt and be debt free in just over 6 months? is your groceries budget accurate?

good luck

outta_the_tunnel

LianneH wrote: »

what a fab dad you are!

do you really have £341 left at the end of the month? if you do then it would only take about a year to clear the whole unsecure debt? looking at your SOA, i think you have most things covered and guess that things like children's activities are essential? if you could cut any of these, like say the entertainment budget of £200, then thats over £500 you could throw at your debt and be debt free in just over 6 months? is your groceries budget accurate?

good luck

This is the problem...looking at the figures it all looks fine. I don't lead an extravagant lifestyle and am always cost cutting. The £200 allocated for entertainment is more like a weekly living budget. That said I should still have the £341 to throw at debts, but it never seems to work out that way!

166million

In that case you need to keep a spending diary and log EVERYTHING you spend. That way you can see where your budget may be lacking x

outta_the_tunnel

Finally heard back from the mortgage advisor today and it does indeed look like I'm going to be struggling to find a new deal come January time given my income multiples and csa commitments :-( so debt reduction and mortgage balance need to be reduced asap.

I appreciate that the SOA looks very positive to many on the forum and I could sell the house to release some equity, but I believe this would be a short term solution, besides it is one of the fixed points in my boys lives and I am reluctant to move them after everything they have been through in the last few years.

I've started a spending diary as suggested to try and eliminate any further waste, but any comments on the SOA and earning extra income would be greatly appreciated. Please feel free to be brutal as I do tend to look on the bleak side and know my position is nowhere near as bad as some given that I have disposable income and assets. I just want to rid myself of the last credit card debt as quickly as possible and need to get motivated to do it!!

Thanks in advance for any comments.

LianneH

i think that your SOA is quite reasonable!

However as its a "race against time" to bring the credit card down, how about...
the emergency fund £830, the shares and bonds £360, 4 months of your free amount (4 x 197) £788, 4 months of £50 holiday fund, 4 months of £50 emergency fund and maybe £50 from the weekly living fund (£150 x 4) £600. total £2578. This leaves £1317 from your cc total. Is there anything you could sell? do car boots, ebay, surveys?

Im struggling to suggest anything else...maybe some experts will do better!

good luck x