Stuck in an endless loop...help me...

mmm3k

Hello All,

Great Site, great information! New here, need some advise and suggestions hence my post.

I have incurred debt over the last 2 years mainly due to childcare costs doubled for us and we ended up going in overdraft each month, now since our child has turned 3 the childcare costs have come down a bit. In the initial months of childcare costs going up we used our credit cards a lot. I've now got caught in a loop though I'm a high rate tax payer, I can't seem to get out of the loop, even if I put my entire salary in the bills account 1/3rd of it goes in the overdraft and the remaining is not enough to pay the bills and my account ends up using overdraft again and again....so its an endless loop going on for about 7 months now....what can I do? any tips? I don't have access to additional cash except mine and partners salary. My Bank has suggested I take another loan to consolidate but don't want to be in more debt to clear existing debt....

A very helpful member here suggested that I post SOA on DFW board so I have put all my details below:

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 3000
Partners monthly income after tax....... 1100
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4100

Monthly Expense Details
Mortgage................................ 633
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 100
Council tax............................. 109
Electricity............................. 127
Gas..................................... 0
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 20
Mobile phone............................ 80
TV Licence.............................. 15
Satellite/Cable TV...................... 24
Internet Services....................... 12.5
Groceries etc. ......................... 300
Clothing................................ 0
Petrol/diesel........................... 220
Road tax................................ 0
Car Insurance........................... 150
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 650
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 15
Life assurance ......................... 15
Other insurance......................... 33
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2653.5


Assets
Cash.................................... 0
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 5000
Total Assets............................ 206000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 179950...(633)......3
Hire Purchase (HP) debt ...... 300......(0)........0
Total secured & HP debts...... 180250....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax........................3200......100.......22
Barclay Card...................4400......115.......18
HSBC...........................1900......100.......22
BarclayCard....................3300......100.......18
Halifax........................2800......100.......22
Total unsecured debts..........15600.....515.......-


Monthly Budget Summary
Total monthly income.................... 4,100
Expenses (including HP & secured debts). 2,653.5
Available for debt repayments........... 1,446.5
Monthly UNsecured debt repayments....... 515
Amount left after debt repayments....... 931.5

Personal Balance Sheet Summary
Total assets (things you own)........... 206,000
Total HP & Secured debt................. -180,250
Total Unsecured debt.................... -15,600
Net Assets.............................. 10,150

MrsTinks

OK - obviously you don't have £900 left a month - unless your child care dropped by a LOT then you need to work out where it all goes... there are areas you can save on - £100 entertainment, groceries and your car insurance is hair raising... I have a new car and pay about £50 a month, hubby has hardly any no claims and a sports car (bone of contention) and even he pays no way near half what you do so try to shop around.
Is consolidation worth it? It depends... do you have the dicipline to cut up all the cards and reduce the overdraft to £100? If you don't then no I suspect it's a stupid idea.
However your APRs are all very high... you need to shuffle some debt round and see if you can get a 0% card to transfer some of the higher debts to.

Charityworker

Do you need 2 cars? The grocery bill is high. Petrol, entertainment and electric are also high. You seem to be in a circle of working to pay childcare and paying childcare to work.

mmm3k

Hi MrsTine, Charityworker

First off, thanks.

I'll shop around for Car Insurance but our apartment is fully electric and the direct debits jumps between 90-127 from Sprint-Autumn. Childcare went unto 1200, 2 years ago and its now down to 650. I'll also review our groceries and entertainment costs and keep a vigilant eye in an attempt to reduce.

What I haven't mentioned in the SOA is that after the bills have all gone out my balance is (minus) -1300 in overdraft so each time we put our salaries in there 1300 goes in O/D and we end up paying O/D fee for a few days each month so the surplus we have is never realised hence the endless loop. My Credit score jumps up and down so I don't get many offers for a new one and to be honest I don't want to take more credit...but having said that I'll shop around for deals on my car insurance, electricity bills and will cut down entertainment.

I still don't see how that will help me come out of the overdraft that I currently have which eats a good bit of our salaries each month...and then we are in that situation end of each month.

mmm3k

Yes we need 2 cars as we both work in opposite direction, and we tried with one car- I took public transport for a year and it works out to be the same...

LittleMissGiggles123

Mobile phone is high, can you reduce your contract or get PAYG?

Electricity is high, have you shopped around recently?

I'm a high spender with groceries myself, so I cant offer many tips on how to cut this area but I do see on other people's SOA's that a family of your size are managing on about £200, so this is another area you could cut.

Petrol is really high, try to only use the car on essential journeys. Any opportunities to car share with other colleagues?

Car insurance is a little high (again, i'm not one to preach on this as mine is also high). Shop around.

Last thing I noticed tough, you say you pay a mortgage which obviously means you have your own home but you do not have buildings insurance. Is this packaged in with your contents?

Good luck

x

LittleMissGiggles123

Also meant to say, keep a spendng diary to see where the little things are being spent. It's surprising how much you spend on lunches, coffees, magazines, treats for the kids etc.

Tixy

Hi and welcome

mmm3k wrote: »

I still don't see how that will help me come out of the overdraft that I currently have which eats a good bit of our salaries each month...and then we are in that situation end of each month.

You need to put your overdraft and the cost in the list of unsecured debts. And budget for things like clothes, presents, haircuts etc.

Your statement of affairs shows you have £930 spare a month, you mention you've not taken into account some overdraft fees - even if they were say £100 a month then your overdraft should be reducing by £830 a month. So it might be £1300 overdrawn the day before pay day this month, then it should only by £500 overdrawn the day before payday next month, and in credit the day before payday the month after.

Thats how you get out of your overdraft. If thats not happening then you are spending a further say £800 a month that you haven't accounted for in your budget. You need to work out where this goes. Are you overpaying any of your other debts (ie paying more than the minimums you have entered against the debts)?

Regarding the cutbacks others have suggested, the more you can reduce outgoings the more your debts will reduce each month.

As others have suggested, keep a really detailed spending diary for a month to work out where your surplus funds are going at the moment. Once you know that you can revise your statement of affairs and see what you missed out. Then you can decide where to start cutting back so you can start reducing your debts each month.

saving4life

Is your property maintenance really £100 per month? Can anything be done with this?

whiteguineapig

i'm not much help, but you haven't put anything down for presents and its nearly christmas
also i find you'r power bill is high , i pay £90 per month for gas and electric combined

pennypusher

Your Statement of Affairs obviously doesn't show where all your money goes each month as you should have some left over. You need to keep a detailed list of spending to see what you are spending on and then put that in your Statement of Affairs.

Your mobile phones are high - can you go PAYG or phone up and ask to go on a lower tarriff. Get rid of Satellite tv and go freeview.

Can you cut back on your trips in the car and petrol used. Maybe car share for work?

Put something in for Christmas and Birthday presents each month. If you don't know work out how much you spend over a year and divide by 12.

You don't seem to have Child Benefit on your income put that down.

You need something for clothing and road tax. Do you never have haircuts?

Your SOA is a good start but needs a bit of refining as you find out where all the money goes.