Help Please!

jimimi

Hello

I am currently off work with depression and not sure if I'll ever be going back. I have applied for ESA and am awaiting their decision. My partner currently works full time, and I'm wondering how we'll cope with the debts we have going out! :eek:

Here is our incomings/outgoings:
(please note I have not accounted for any ESA or increase in other benefits as these are unknowns for the moment)

Monthly Budget SummaryAmount(£)
Total monthly income1,494
Monthly expenses (incl. HP & secured loans)1,455.73
Available for debt repayments38.27
UNsecured debt repayments346.8
Amount short for making debt repayments-308.53

Personal Balance Sheet SummaryAmount(£)
Total Assets (things you own)3,170
Total Secured & HP Debt-0
Total Unsecured Debt-10,019
Net Assets-6,849

Household Information

Number of adults in household2
Number of children in household2
Number of cars owned1
Income, Expense, Debt & Asset Details

IncomeAmount(£)Monthly income after tax0
Partners monthly income1080
Benefits214
Other income200
Total monthly income1494

ExpensesAmount(£)
Rent370
Council tax116
Electricity55
Gas55
Water Rates12
Telephone (land line)30
Mobile phone50
TV Licence15
Satellite/Cable TV44
Internet services30
Groceries etc.400
Petrol/diesel20
Road tax10
Car Insurance33.33
Car maintenance (including MOT)10
Medical (prescriptions, dentists, opticians etc.)7.4
Pet Insurance/Vet bills15
Contents Insurance13
Presents (birthday, christmas etc.)50
Emergency Fund120
Total monthly expenses1455.73

Unsecured Debt DescriptionDebt(£)Monthly(£)APR(%)Lloyds TSB loan £5219 £183.8 (a month) 17.5% apr

Lloyds TSB loan 4800 163 17.5% apr
Unsecured Debt totals10019346.8-

Asset DescriptionValue (£)Cash2170
Car(s)1000
Total Assets3170

I think it is the debt repayments that really cripple us, can anyone advise how we could possibly get these down, or advise on anything else we could do to lower our bills?

Thanks

melanieconway

Hello

I'm not an expert on this forum but the things I would try and eradicate are:

1. Mobile phone - alternatively get giffgaff sims. They have some really good deals on and if you have one for your OH too you can call and text each other as much as you like for free.
2. Have you thought about getting rid of the Satellite TV and getting a freeview box? If you really really want to get rid of debt it's not an essential and you can always treat yourself to a new contract with Sky for clearing your loan?
3. Analyse your usage of the emergency fund. What is it for? As an example, if it's for the breakdown of white goods etc could you not invest in a British Gas appliance cover instead? Are there any small insurance policies you could get instead of putting the emergency fund away? How much have you spent in the last year of the fund? If it's minimal, why not aim to keep a rolling 12 months worth i.e. £1440 in the bank. This means that every time you go over and month and haven't dipped into it you could put this towards your debt repayments.
4. This is harsh but can you sell the car and use public transport or is it essential for the kids?
5. Have a good look at the tv/phone/internet bundles you can get out there. I'm sure you could get rid of your individual bills and save by getting a bundle. I worked out that Talk Talk (I know their CS is rubbish) can give you phone with free calls and broadband for less than £20 including line rental per month. You are tied in for 12 months.

elaine12022

Hi Well done for trying to work things out. NOt easy with depression.(and don't write yourself off either, it is possible to improve/recover).

If you stop paying Sky subscription you can still use the box & you get quite a few channels still for free. Or could you negotiate a lower package?

£400 seems a lot for groceries, can you sit down with your partner & work out where the money's going? (and the Old Style board may have some handy tips!)

Also £50 seems an awful lot for presents per month.

And as melanie conway points out can you cut down on the 'emergency' fund?

If you want a guide as to what is considered 'reasonable' expenditure, do a search for 'debtwizard' - there are some simple templates on there which might be helpful in further assessing the situation.

If you do get ESA, I can see you would only be eligible for contribution based?, which if you are put in the Work Related Activity Group the government wants to limit to a year.

Good luck

RAS

Hi

Work out if there are early redemption penalties on the loans.

jimimi wrote: »

Monthly Budget SummaryAmount(£)
Total monthly income1,494
Monthly expenses (incl. HP & secured loans)1,455.73
Available for debt repayments38.27
UNsecured debt repayments346.8
Amount short for making debt repayments-308.53

Personal Balance Sheet SummaryAmount(£)
Total Assets (things you own)3,170
Total Secured & HP Debt-0
Total Unsecured Debt-10,019
Net Assets-6,849

Household Information

Number of adults in household2
Number of children in household2
Number of cars owned1
Income, Expense, Debt & Asset Details

IncomeAmount(£)Monthly income after tax0
Partners monthly income1080
Benefits214
Other income200
Total monthly income1494

ExpensesAmount(£)
Rent370
Council tax116
Electricity55
Gas55
Water Rates12
Telephone (land line)30 - reduce this as much as possible
Mobile phone50 - you need to reduce your package and then go PAYG
TV Licence15 - this is £12
Satellite/Cable TV44 - reduce to the minimum package now and then get rid ASAP
Internet services30 - this is expensive if you also have £30 for phone line. You should be able to get both for £30.
Groceries etc.400 - this is massive - you should cit £100 immediately and aim for £275 for all 4 of you.
Petrol/diesel20
Road tax10
Car Insurance33.33
Car maintenance (including MOT)10
Medical (prescriptions, dentists, opticians etc.)7.4
Pet Insurance/Vet bills15
Contents Insurance13
Presents (birthday, christmas etc.)50 - you cannot aford this - £20
Emergency Fund120 - this is an emergency. How much do you have in this fund now? You need that money to fund you deficit for the next few months
Total monthly expenses1455.73

Unsecured Debt DescriptionDebt(£)Monthly(£)APR(%)Lloyds TSB loan £5219 £183.8 (a month) 17.5% apr

Lloyds TSB loan 4800 163 17.5% apr
Unsecured Debt totals10019346.8-

Asset DescriptionValue (£)
Cash2170 - you can cut back to cover most of the deficit and then use this money to top-up maybe £75-£100 per month until you are able to work again.
Car(s)1000
Total Assets3170

I think it is the debt repayments that really cripple us, can anyone advise how we could possibly get these down, or advise on anything else we could do to lower our bills?

Thanks

You are spending a lot of money on things that you do not need and cannot afford.

You need to reduce these and then use your cash to cover any deficit until your ESA comes in. That should see you back on an even keel for a while.

jimimi

Thanks everyone. I wil cancel my mobile as soon as the contract ends and go on PAYG. I will have to persuade my OH to do the same as well, also about the Sky package! I know things will have to change drastically round here, I will need to stop smoking even though it helps me when I'm stressed as smoking takes up quite a bit of the £400 grocery fund I think. Think I will have to get a new frame of mind about the outgoings and become more frugal. Is there any way of reducing the debt payments that anyone knows of? Would it be cheaper to put both loans into one or something? I have no idea.

RAS

jimimi wrote: »

Is there any way of reducing the debt payments that anyone knows of? Would it be cheaper to put both loans into one or something? I have no idea.

Hi

Before you do anything about the loans, you need to read the paperwork and see if there are any early redemption penalties. You may have to pay a lot more money if you cancel the loans early.

And the basic rule is always that consolidating loans usually costs more than paying them off.

You do not need to reduce your payments; that is wrong-headed.

You have some cash to tide you over.

You have quite a lot of slack in your budget.

So cut back your spends as much as possible until the ESA kicks in and use the cash to cover the deficit in the short-term. That buys you time to sort out sky and phone packages and go and talk to the doctor about patches for the smokes.

Once you have the ESA, you should be ok budget wise.

And in the mean-time how about buying baccie and rolling your own to save money?

jimimi

RAS wrote: »

Hi

Before you do anything about the loans, you need to read the paperwork and see if there are any early redemption penalties. You may have to pay a lot more money if you cancel the loans early.

And the basic rule is always that consolidating loans usually costs more than paying them off.

You do not need to reduce your payments; that is wrong-headed.

You have some cash to tide you over.

You have quite a lot of slack in your budget.

So cut back your spends as much as possible until the ESA kicks in and use the cash to cover the deficit in the short-term. That buys you time to sort out sky and phone packages and go and talk to the doctor about patches for the smokes.

Once you have the ESA, you should be ok budget wise.

And in the mean-time how about buying baccie and rolling your own to save money?

Thanks, I can give up smoking very easily if I want to, and I guess now is a case of needs must! Like I said, it helps me from getting into a panic or too stressed, but I'll have to find another crutch. It's my OH and his Sky and phone addictions that'll be the harder ones to break, but he is usually the one who worrys about money the most, so I'll have words. Thanks for your help.