Help me make sense of this please - SOA

katerinasol

Statement of Affairs and Personal Balance SheetHousehold 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................ 888

Partners monthly income after tax....... 1079.28

Benefits................................ 0

Other income............................ 0

Total monthly income.................... 1967.28

Monthly Expense Details

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 400

Management charge (leasehold property).. 0


Council tax............................. 125
Electricity............................. 50

Gas..................................... 50

Oil..................................... 0

Water rates............................. 0

Telephone (land line)................... 15

Mobile phone............................ 50

TV Licence.............................. 12.13

Satellite/Cable TV...................... 0

Internet Services....................... 0


Groceries etc. ......................... 122
Clothing................................ 30

Petrol/diesel........................... 80

Road tax................................ 10

Car Insurance........................... 58.18

Car maintenance (including MOT)......... 8.33

Car parking............................. 0

Other travel............................ 44.4

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 0

Buildings insurance..................... 0

Contents insurance...................... 14

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 0

Haircuts................................ 0

Entertainment........................... 19.98

Holiday................................. 0

Emergency fund.......................... 50

Gym..................................... 105

Beauty.................................. 35

Total monthly expenses.................. 1279.02

Assets

Cash.................................... 0House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 0Other assets............................ 0

Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts

Description....................

Debt......Monthly...APRLloyds Credit Card.............600.......50........19.9

Lloyds Overdraft...............2000......15........0

Natwest Overdraft..............1250......40........0

Store card.....................381.37....0.........0

Council tax....................548.......0.........0

Water..........................700.......0.........0

Car............................1200......300.......0

Total unsecured debts..........6679.37...405.......-

Monthly Budget Summary

Total monthly income.................... 1,967.28

Expenses (including HP & secured debts). 1,279.02

Available for debt repayments........... 688.26

Monthly UNsecured debt repayments....... 405

Amount left after debt repayments....... 283.26

Personal Balance Sheet Summary

Total assets (things you own)........... 0

Total HP & Secured debt................. -0

Total Unsecured debt.................... -6,679.37

Net Assets.............................. -6,679.37
Created using the SOA calculator at www.makesenseofcards.com. Reproduced on Moneysavingexpert with permission, using IE browser.

katerinasol

Also, I would just like to say that in theory, we have enough money to make all the payments but in practice it never works out that way... the credit card is especially a pain because at the moment I'm £50 over the limit and I don't really know how to pay it off, it always seems to mount up... and we always end up doing that thing where it seems like there's loads of money until you look at your bank statement and get a shock when there's nothing left over. It seems like a neverending cycle and I just don't know what to do! I got paid yesterday but there's pretty much nothing left over now, and we haven't even paid for the gym yet, which we should really cancel but I don't think OH understands quite how stupid it is to be paying £50 for the gym when there are huge debts to pay off! The overdrafts are interest free because they're from student accounts but they won't stay that way for long.

RAS

Given what you said in your second post you need to do two things:

1. this weekend pull out all your statements and work out where the money has actually gone over the last three-six months. As one poster put it, Cash WD £10, Cash WD £10, Cash WD £10, ...... Yours may be different but until you look you will not know.
2. Both start a spending diary - a little booklet in which you write down every last penny. It helps if you leave the cards at home and only take a set amount of cash out with you. This spots what we call the latte habits - those things that cost £1-2 a time and add up to £500 a year.

You might also want to look round for stuff that you no longer use and get it flogged on e-bay to pull together £100 to get that CC in credit.

And by the way council tax debts lead to bailiffs; your water is just under the bankruptcy limit and you need to keep it that way, as they have been known to make people BR for very little over £750.

Mikazaru

If you don't have the £280 left a month you need to keep a spending diary for a while so you can identify where the money is going.
Couple of thoughts on your SOA:
Is there anyway to increase your income? Second job perhaps?
For combined use, gas and electric seems a little high.
Is it worth having a car if you only use £80 petrol a month?
The £50 for the emergency fund, are you saving this at the moment?
The beauty treatments, can you go less often, every 6 weeks instead of a month?

katerinasol

Oh and another thing - OH says when we get a mortgage (we're looking at RTB), we should get a few k more to pay off the debts all in one go, but am I right in thinking that we should at least move towards paying them off now? To be honest, with the way the money is going out at the moment, I'm struggling to think how we're going to afford solicitors fees and all that when it is time to get a mortgage.

RAS

You certainly should NOT be looking at putting your debts on the mortgage; over 25years you will pay off an awful lot more interest if you do that.

Frankly if that is how OH thinks, I would seriously consider whether you should be involved in any joint accounts with him and whether it is appropriate to buy a property with him. I can see you getting badly burned in the next five years.

Bored

Okay, so the first thing that jumps out is the gym membership which you're spending £105 a month on. This is £105 you could be throwing at the debts, so I personally would cancel at least until the debts are paid off. £35 a month for beauty is also something that could be cut down temporarily until the debts are paid off.

Next, £50 a month on mobile phones, I assume this is for 2 mobiles? If they're on contract then when it runs out, get a cheap sim only deal such as giffgaff and you could reduce this to £20 a month for 2 phones.

Another thing, you say you're putting £50 a month into an emergency fund however in your assets you say you have £0 cash? Is this something you're just starting to do?

Finally, how does this SOA work out in real life, do you actually have £283.26 left over each month or does this miraculously disappear? If you can't account for it then it probably goes on coffee, magazines, work lunches (life in other words!) and you'll need to start keeping a spending diary to work out exactly where this money goes. Without knowing this, you won't know how to cut back.

Hope this helped a little bit.

CH27

Do not add your debts to a mortgage.
Pay your debts off ASAP.

Keep a detailed spending diary & you will soon see where cash is being frittered away.

katerinasol

Mikazaru wrote: »

If you don't have the £280 left a month you need to keep a spending diary for a while so you can identify where the money is going.
Couple of thoughts on your SOA:
Is there anyway to increase your income? Second job perhaps?
For combined use, gas and electric seems a little high.
Is it worth having a car if you only use £80 petrol a month?
The £50 for the emergency fund, are you saving this at the moment?
The beauty treatments, can you go less often, every 6 weeks instead of a month?

A spending diary sounds like a good idea to be honest, might have to do that!

I'm afraid there's no way to increase our income so far, we're both working full time but I'm on a temporary position that doesn't pay a lot. I have an intervew for a permanent job next week so maybe I'll be able to update the SOA with some better figures in a while!

The £50 is more of a home improvements fund to be honest, we started redecorating the front room when money was a little better and now it just looks awful and needs to be finished really. All we're looking at is wallpaper.


Beauty treatments, I do go every 6 weeks or so, sometimes every two months, but wasn't sure how to put 6 weeks in on the calculator. It's not a facial or my nails or anything but something a bit more... essential, so I'm not really willing to cut it out completely.
Oh, the car thing: OH works antisocial hours quite some distance away and he needs the car to get home from work, otherwise this would be impossible. Public transport in this area isn't exactly great.

RAS wrote: »

Given what you said in your second post you need to do two things:

1. this weekend pull out all your statements and work out where the money has actually gone over the last three-six months. As one poster put it, Cash WD £10, Cash WD £10, Cash WD £10, ...... Yours may be different but until you look you will not know.
2. Both start a spending diary - a little booklet in which you write down every last penny. It helps if you leave the cards at home and only take a set amount of cash out with you. This spots what we call the latte habits - those things that cost £1-2 a time and add up to £500 a year.

You might also want to look round for stuff that you no longer use and get it flogged on e-bay to pull together £100 to get that CC in credit.

And by the way council tax debts lead to bailiffs; your water is just under the bankruptcy limit and you need to keep it that way, as they have been known to make people BR for very little over £750.

The council tax we're paying off in the weekly payments to them at the moment, but there's something weird going on with the underpayment - first they sold it on to a debt collector, then they just sent another letter saying they want the money again, so will have to get home tonight and have a sit down and sort it out.

Another person mentioned the spending diary, which I will definitely suggest.

Re: stuff to flog, I actually have a bag of clothes in the cupboard that no longer fit, I was going to ask a friend to model them for me, take pictures and sell it on Facebook/Gumtree.

The water rates thing is really scary, we will definitely need to start paying it back ASAP. Would you suggest writing them a letter and sending an offer of payment?

To be honest, we've both had our heads in the sand over debts for so long, which is why they've escalated, and I know they're not massive debts like some people's, but it's ridiculous that we're earning ok money and we're still getting letters through the door that I don't even want to open. It's definitely time to sort things out.

RAS

katerinasol wrote: »

The council tax we're paying off in the weekly payments to them at the moment, but there's something weird going on with the underpayment - first they sold it on to a debt collector, then they just sent another letter saying they want the money again, so will have to get home tonight and have a sit down and sort it out.

............

The water rates thing is really scary, we will definitely need to start paying it back ASAP. Would you suggest writing them a letter and sending an offer of payment?

Council tax is rarely sold on to a debt collector, it is farmed out to bailiffs when the LO is issued.

Water rates, i would start by making some sort of payment even if it is £10 per month.

Regarding the front room - you cannot afford it. Sign up for www.freegle.org.uk or freecycle and try and get some white emulsion there so you can at least paint it over. You might also get enough of one colour to do a feature wall.

katerinasol

Bored wrote: »

Okay, so the first thing that jumps out is the gym membership which you're spending £105 a month on. This is £105 you could be throwing at the debts, so I personally would cancel at least until the debts are paid off. £35 a month for beauty is also something that could be cut down temporarily until the debts are paid off.

Next, £50 a month on mobile phones, I assume this is for 2 mobiles? If they're on contract then when it runs out, get a cheap sim only deal such as giffgaff and you could reduce this to £20 a month for 2 phones.

Another thing, you say you're putting £50 a month into an emergency fund however in your assets you say you have £0 cash? Is this something you're just starting to do?

Finally, how does this SOA work out in real life, do you actually have £283.26 left over each month or does this miraculously disappear? If you can't account for it then it probably goes on coffee, magazines, work lunches (life in other words!) and you'll need to start keeping a spending diary to work out exactly where this money goes. Without knowing this, you won't know how to cut back.

Hope this helped a little bit.

Thanks for your help! Looking at it now, a gym membership does seem really frivolous, especially at that price. You're definitely right.

The £35 for beauty is a bikini wax, and it's something that's really important to me (can't stand not having one) so to be honest it would be one 'treat' I would really like to hold on to if at all possible.

The £50 is for two mobiles, they're about £21 a month each (but I overestimated just in case) and the contract doesn't run out until March/April time so not much we can do now.

In real life, unfortunately, this seems to disappear somewhere within the first week! You've all suggested spending diaries, which means it's probably a really good idea for both of us, so will buy two tiny notebooks and pens and get writing everything down.