Debt Advice please.....where should I start?

El_Tedistino

Hi, would you guys mind having a look at this and any tips/advice you may have would be appreciated! I have been completely honest (as painful as it is!) and really want to start reducing these debts asap. We have our honeymoon coming up in December so realistically this will all start in earnest in January.

Thanks



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.................... 2
Monthly Income Details
Monthly income after tax................ 1500
Partners monthly income after tax....... 2200
Benefits................................ 0
Other income............................ 700
Total monthly income.................... 4400
Monthly Expense Details
Mortgage................................ 958
Secured/HP loan repayments.............. 1025
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 115
Electricity............................. 45
Gas..................................... 30
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 12
Satellite/Cable TV...................... 72
Internet Services....................... 0
Groceries etc. ......................... 250
Clothing................................ 50
Petrol/diesel........................... 250
Road tax................................ 20
Car Insurance........................... 90
Car maintenance (including MOT)......... 10
Car parking............................. 100
Other travel............................ 100
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 50
Buildings insurance..................... 25
Contents insurance...................... 25
Life assurance ......................... 25
Other insurance......................... 80
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 125
Holiday................................. 100
Emergency fund.......................... 25
Total monthly expenses.................. 3707

Assets
Cash.................................... 0
House value (Gross)..................... 378000
Shares and bonds........................ 0
Car(s).................................. 12000
Other assets............................ 3000
Total Assets............................ 393000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 156000...(958)......5.99
Hire Purchase (HP) debt ...... 7000.....(250)......7<
Mortgage.......................130000...(775)......5.5
Total secured & HP debts...... 293000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................5500......193.......7.5
Credit Cards...................16000.....350.......0
Total unsecured debts..........21500.....543.......-

Monthly Budget Summary
Total monthly income.................... 4,400
Expenses (including HP & secured debts). 3,707
Available for debt repayments........... 693
Monthly UNsecured debt repayments....... 543
Amount left after debt repayments....... 150
Personal Balance Sheet Summary
Total assets (things you own)........... 393,000
Total HP & Secured debt................. -293,000
Total Unsecured debt.................... -21,500
Net Assets.............................. 78,500
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

Deeperblue

Well done for taking the first step and getting it all down in writing. :beer:

There will be cleverer people than me along shortly I'm sure but there are a couple of things that stand out on your SOA.

El_Tedistino wrote: »

Hi, would you guys mind having a look at this and any tips/advice you may have would be appreciated! I have been completely honest (as painful as it is!) and really want to start reducing these debts asap. We have our honeymoon coming up in December so realistically this will all start in earnest in January.

Thanks



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.................... 2 Do you need two? They seem to be costing you an arm and a leg.
Monthly Income Details
Monthly income after tax................ 1500
Partners monthly income after tax....... 2200
Benefits................................ 0
Other income............................ 700 Is this from a rental property?
Total monthly income.................... 4400
Monthly Expense Details
Mortgage................................ 958
Secured/HP loan repayments.............. 1025
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 115
Electricity............................. 45
Gas..................................... 30
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 12
Satellite/Cable TV...................... 72 I'm guessing this is a package? Any chance of reducing it a bit?
Internet Services....................... 0
Groceries etc. ......................... 250 Pretty high for two, perhaps look on the old style board and you could knock £50 off this pretty easily.
Clothing................................ 50 Do you need this every month?
Petrol/diesel........................... 250 This is high! Any chance of reducing this or are all trips necessary?
Road tax................................ 20
Car Insurance........................... 90
Car maintenance (including MOT)......... 10
Car parking............................. 100 Any chance of reducing this?
Other travel............................ 100 Whats this for?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 50 I don't have pets but isn't this quite a lot?
Buildings insurance..................... 25
Contents insurance...................... 25
Life assurance ......................... 25
Other insurance......................... 80 Whats this for?
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 125 Perhaps cut down for a while?
Holiday................................. 100
Emergency fund.......................... 25 Do you have an emergency fund already? Perhaps list it in the 'Cash Assets' section.
Total monthly expenses.................. 3707

Assets
Cash.................................... 0
House value (Gross)..................... 378000
Shares and bonds........................ 0
Car(s).................................. 12000
Other assets............................ 3000
Total Assets............................ 393000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 156000...(958)......5.99
Hire Purchase (HP) debt ...... 7000.....(250)......7<
Mortgage.......................130000...(775)......5.5
Total secured & HP debts...... 293000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................5500......193.......7.5
Credit Cards...................16000.....350.......0 Would be good to split these up and find out the APRs so you know where best to throw your money.
Total unsecured debts..........21500.....543.......-

Monthly Budget Summary
Total monthly income.................... 4,400
Expenses (including HP & secured debts). 3,707
Available for debt repayments........... 693
Monthly UNsecured debt repayments....... 543
Amount left after debt repayments....... 150 Do you have this left over? If not, consider doing a spending diary.
Personal Balance Sheet Summary
Total assets (things you own)........... 393,000
Total HP & Secured debt................. -293,000
Total Unsecured debt.................... -21,500
Net Assets.............................. 78,500
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

Just a few comments above.

Do you know where the debts have come from? Big one off spends or just daily living? If it's daily living then you really will need to do a spending diary to make sure your SOA is accurate.

If you have two houses do you set anything aside for maintenance of the rental property (if it is rented that is), boiler checks etc?

HTH.

paulmapp8306

Initial thoughts:

£1000+ in secured loans !! Jebus thats more than the mortgage.

Still.

1. Reduce the Sky package

2. £50 clothing is a lot. £20 would be better - you must HAVE clothes already?

3. £250 petrol for 2 cars isnt high. )i spend £200 on one car - but I have a 40 mile round trip to work ) but do you need 2 cars?

4. £50 vet bills/insurance is high. If you have insurance - once you have the excess put away you dont need to budget for the bills. I used to have a dalmation so I do know the true costs. £20 should more than cover it IMO.

5. £100 car parking !!! thats REALLY high. If thats for while your at work, ditch the car which will save petrol/tax/insurance as well and use public transport if at all possible.

6. £100 other travel ?? dont get it - you have the car. you can surly ditch this is you DO keep the car?

7. Again - as pointed out £80 other insurance? it that work related? you already have car/pet/life covered so whats that for?

8. £50 birthday/Prezzys is a lot with no kids. Thats £600 per year. £20 is more realistic.

9. £125 entertainments is really high as well. My ents budget is £60 for a family of four. You need to cut that in half I think.

10. £100 holiday. £1200 a year on a holiday ?? If your really struggling you cant afford a holiday at all. If you need to get away a long weekend in the UK, or even a week on a holl camp can be had for at most half that. Id consider at this point how serious you are at saving to get the debts down. Full marks for facing it but you need a lifestyle change/reassess your priorities if your going to make this work.

If you cut/change all of those, and add them to you £150 left, youd have somewhere around £500 to £550 after paying bills. Thats quite healthy, and even for a 6 month period of belt tightening after your honeymoon wouold give you £3k to lower your debts. A year and you could have the loan payed off completely - or be saving a lot on interest on the CC payments.

antonia1

Just a small thing - your "other income", which I presume is rental from your second property, isn't even covering the mortgage on the property, let alone any ongoing maintenance, emergency fund or periods where the property may be empty. Could you sell the second property and release some equity? Or at least pay off the mortgage so you aren't losing £75 by paying for a second property.