Worried about heading for disaster

robwin

Hello all

I don't want to bore you with my tale of woe but I'm really panicking about the situation I've got myself and my husband in. In brief, I used to have a very lucrative job that I absolutely hated and eventually I started to suffer from depression. I had a few periods off sick (for which I only got statutory sick pay) and a while back it just got so bad that I decided to quit my job.

I do some freelance work and I thought that if I could find a part time job as well, that plus my husband's salary (which is pretty good) would be ok to live on. Unfortunately I haven't been able to get a part time job despite applying for millions and so I have no guaranteed income.

We are just about managing to keep our heads above water - just living hand to mouth, but we owe a STACK of money. I am really terrified about the credit card debt in particular as it is interest free at the mo so the repayments are low, but in June it'll rise.

In short - whilst we're just about ok at the moment (major austerity measures in our house), I feel like we're on the edge of a disaster. I am so worried, I can't sleep and can't concentrate on my freelance work.

Our SOA is below and i would really appreciate any advice at all. I feel like we are doing a lot to keep our spending down but if there's anything else that might help, we need to do it!! Thank you for looking at this...

(I've put some comments in next to some of the figures to pre-empt some of your queries about them:)

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1625
Benefits................................ 0
Other income............................ 310 (lodger)
Total monthly income.................... 1935[/b]

Monthly Expense Details
Mortgage................................ 882
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 116
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 17 (inc broadband internet)
Mobile phone............................ 82 (two phones - both in contract till next year)
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 10 (average - we usually only buy clothes about twice a year)
Petrol/diesel........................... 40
Road tax................................ 0
Car Insurance........................... 0 (we've paid this in a lump to avoid the monthly premium charge - so it's part of the Virgin card debt)
Car maintenance (including MOT)......... 40
Car parking............................. 0
Other travel............................ 55
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 7
Buildings insurance..................... 23 (B & C insurance together)
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1669


Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 221500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 193000...(882)......4
Total secured & HP debts...... 193000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest Mastercard.............1300......30........0 (0% till June 2012)
Virgin card....................10400.....104.......0 (0% till June 2012)
Natwest Loan...................13000.....269.......12
HSBC...........................14000.....150.......4.75
Total unsecured debts..........38700.....553.......-


Monthly Budget Summary
Total monthly income.................... 1,935
Expenses (including HP & secured debts). 1,669
Available for debt repayments........... 266
Monthly UNsecured debt repayments....... 553
Amount short for making debt repayments. -287 (we don't usually end up this much down at the end of the month as I do tend to make a bit of money and sometimes we can shave a bit off expenses etc. I hope that I will start making at least £400 per month when my freelance business picks up a bit - it's early days)

Personal Balance Sheet Summary
Total assets (things you own)........... 221,500
Total HP & Secured debt................. -193,000
Total Unsecured debt.................... -38,700
Net Assets.............................. -10,200

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using other browser.

robwin

PS Just looking at that makes me feel sick. I just feel an idiot and i am so worried about our future :-(

findingmyownway

Firstly, well done for posting.

There are some changes you could make to the SOA (see below for my input, im sure others will have more), but the biggest difference you could make is by getting a job. Are you still sick? If so why aren't you claiming the appropriate benefit? If not, then I think you should be applying for every full time job going. Otherwise you are basically running the household off your husbands income. I note your freelance income is not on SOA?

Mortgage................................ 882
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 116
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 17
Mobile phone............................ 82 - can you reduce the tariff even though they are in contract?
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200 Is this for 2 people? See the OS board for advice on reducing
Clothing................................ 10
Petrol/diesel........................... 40
Road tax................................ 0
Car Insurance........................... 0 Car maintenance (including MOT)......... 40
Car parking............................. 0
Other travel............................ 55 whats this?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 7
Buildings insurance..................... 23
Life assurance ......................... 0 is this covered by your mortagge?
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 40 you can't afford this really
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1669

robwin

Thanks for the reply findingmyownway

A couple of queries for you and anyone else who's watching...

- what is a reasonable monthly grocery bill for two adults and a cat?

- the entertainment budget is spent purely on meeting up with friends for a drink. We do this maybe twice a month. I appreciate we can't afford it (we can't afford anything!) but how do we explain this to people/avoid becoming completely isolated? Would greatly appreciate any advice from DFWs on how to manage people's expectations but not lose all our friends!

turbo.jet

OK so, ouch... but don't lose hope. You've absolutely done the right thing. There are hundreds of us here that have been where you are, and hundreds that have gotten ourselves out of it.

My suggestions are below in blue...

robwin wrote: »

Monthly Expense Details
Mortgage................................ 882
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 116
Electricity............................. 40 This is high. Have you used moneysupermarket or similar to see the best deal for you? VERY worth taking the time to do
Gas..................................... 40 See elec
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 17 (inc broadband internet)
Mobile phone............................ 82 (two phones - both in contract till next year)
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200 This is where you can make some real savings by focusing on it and spending a bit of time and energy. Batch cooking meals and switching to LIDDLE or ALDEY is how I chopped this figure down dramatically.
Clothing................................ 10 (average - we usually only buy clothes about twice a year)
Petrol/diesel........................... 40
Road tax................................ 0
Car Insurance........................... 0 (we've paid this in a lump to avoid the monthly premium charge - so it's part of the Virgin card debt)
Car maintenance (including MOT)......... 40 Can you survive without your car, even if only for a year or two. Savings will be remarkable. I did this too.
Car parking............................. 0
Other travel............................ 55
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 7
Buildings insurance..................... 23 (B & C insurance together)
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1669


Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 221500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 193000...(882)......4
Total secured & HP debts...... 193000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest Mastercard.............1300......30........0 (0% till June 2012)
Virgin card....................10400.....104.......0 (0% till June 2012)In June 2012 try and get another 0% deal. Keep up with your minimum payments in the meantime to increase your chances of getting a 0% deal. In the meantime reduce the balances as much as possible.
Natwest Loan...................13000.....269.......12 Focus on this debt first.
HSBC...........................14000.....150.......4.75 Focus on this one second
Total unsecured debts..........38700.....553.......-

I won't lie to you, the next couple of years will be hard work, but they needn't be without fun. Reducing your debt and turning your life around can become so much of a focus it almost becomes fun.

Use tools like eBay and car boot sales to sell everything you can, when you get the money, plow it straight into your debt.

Keep your signature updated every so often with how much you are reducing the overall debt by and work out your debt free date now at http://www.whatsthecost.com/snowball.aspx - this date may be disappointing for you, but then you can spend the time between now and then bringing it forward. That is a good feeling.

The process you are about to embark on will have lots of down days, but it will also have lots of days where things happen that you feel very proud of yourself for, like when you get rid of a card, or pay off a chunk of a loan. Use these days to keep your motivation up.

Also, use this forum for lots of advice and support. Keep a diary on the diary forum and get a group of people to follow your journey and motivate and support you.

Best of luck, and well done on taking the first step. It is commendable to recognise past mistakes and to learn from them. Well done.

Pollycat

Firstly, don't feel like an idiot.

We are 2 adults plus 1 cat and our average monthly spend over the last 5 years (yes, I really am that anal) is just below £170 per month.

However, it does take some work, I menu plan for 3 weeks at a time, cook in bulk and check out the 'reduced' sections in supermarkets.

If you menu plan, you can cut out a lot of waste. Instead of buying a single green pepper for a recipe I buy a value pack and use them in risottos and pasta dishes.

I've just done 10 portions of sausage casserole.
It has new potatoes (bogof from Tesco), red & green peppers, red kidney beans, baked beans, tins of tomatoes (buy a 4 pack, get 2 packs free), haricot beans, fresh parsley (plant reduced from Tesco) and probably has cost less than 50p per portion.

Instead of buying a 400gm pack of mince, I'll buy 4 packs and bag them in 4 x 340gm (3/4lb) packs and the remaining 240gm will make 2 nice burgers or meatballs for pasta.

If I see any bags of potatoes reduced (quite often in our local Tesco Metro) I buy them and boil up a big pan, mash and freeze them.
Not only is it money-saving, it means I can just get a portion out of the freezer if I don't fancy doing much cooking.

We eat very well, I buy the large joints of topside of beef when they are half price and cut them into slices for braising and good chunks for stroganoff/goulash and the not-so-good bits for pie fillings.
The £170 covers Felix cat food for the cat and beer and wine.

I very rarely pay full price for anything, it's usually 3 for 2 or bogof, I store my stocks in the garage.

Re meeting friends - could you arrange to go to each other's houses and just take wine?

turbo.jet

Yum! I'm coming round for sausage casserole!

Seriously though, this is exactly what I meant by how the food shop can yield massive savings, with some effort and careful planning.

robwin

Thank you all so much for this - it's exactly this kind of advice and support I need. It's so hard when you are constantly stressing/obsessing about it and can't really talk to anyone because people just don't really talk about money, do they? And I feel so guilty, I'm beginning to really get on my husband's last nerve.

I will definitely start thinking about ways to cut the grocery budget down further - your ideas sound great Pollycat!

I also agree about going round to friends' houses - I have been thinking that for a while. It's just a pretty big culture shock - a year ago I was a high-flying professional type who never worried about money and could go out for all the outlandishly expensive cocktails and dinners she wanted. I don't want that life back though, as I was dying inside and I guess my friends are just going to have to accept that I can't do that stuff any more. No more glamour, just a comfy sofa and a glass of wine. Maybe a board game or two.

You guys are really giving me hope - I feel a little bit teary...

turbo.jet

robwin wrote: »

...and can't really talk to anyone because people just don't really talk about money, do they?

I find that people just don't get it when you say "No I can't, I'm broke", they just ignore it. I suppose they assume that means you just dont' have much money, not that you are trying to work out how you'll feed yourself in the week before your next payday, as I do most months!

robwin wrote: »

I feel a little bit teary...

In a good way I hope!

robwin

turbo.jet wrote: »

In a good way I hope!

Yes! A bit of and at the same time!

Pollycat

robwin wrote: »

I will definitely start thinking about ways to cut the grocery budget down further - your ideas sound great Pollycat!

Pop over to the Old-Style board, there's loads of ideas for good, inexpensive meals.

My slow cooker is invaluable.

If I see carrots/swede/parsnips on offer (again at Tesco Metro I bought 1kg carrots for 19p), I'll do a big batch of soup in the slow cooker. Lovely for lunches when it's winter.

Sorry, turbo.jet - 8 portions of sausage casserole are earmarked for the freezer when cooled enough.