Credit Card Out of Control

Jamjaf

Dear All - I have finally faced the facts and done the SOA calculater that almost made me throw up. I knew things were too tight, but not this bad. I think I need to tighten the belt hard on the outgoings, but also need some ideas on reducing the unsecured debt costs and re-financing the MBNA credit card so the balance starts reducing and the monthly payment is less. I would be so grateful for any ideas. To explain, the high child costs are school fees for 2 in their GCSE years, so we really don't feel we can pull them out to reduce that cost.
very many thanks in advance of your assistance.
:(

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 4660.27
Partners monthly income after tax....... 1600
Benefits................................ 188.4
Other income............................ 0
Total monthly income.................... 6448.67
Monthly Expense Details
Mortgage................................ 966.3
Secured/HP loan repayments.............. 0
Rent.................................... 439.27
Management charge (leasehold property).. 0
Council tax............................. 160.89
Electricity............................. 103.23
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 46
Mobile phone............................ 90
TV Licence.............................. 12.12
Satellite/Cable TV...................... 35
Internet Services....................... 0
Groceries etc. ......................... 1000
Clothing................................ 50
Petrol/diesel........................... 260
Road tax................................ 330
Car Insurance........................... 60
Car maintenance (including MOT)......... 500
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 150
Other child related expenses............ 790
Medical (prescriptions, dentist etc).... 28.5
Pet insurance/vet bills................. 30.99
Buildings insurance..................... 36.5
Contents insurance...................... 33.91
Life assurance ......................... 253
Other insurance......................... 30
Presents (birthday, christmas etc)...... 68
Haircuts................................ 20
Entertainment........................... 70
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 5573.71

Assets
Cash.................................... 0
House value (Gross)..................... 224999
Shares and bonds........................ 0
Car(s).................................. 2900
Other assets............................ 8224
Total Assets............................ 236123

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 157572...(966.3)....2.5
Total secured & HP debts...... 157572....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
sainsburys bank loan...........12778.....378.4.....6.95
sainsburys bank loan...........11903.....369.1.....8.7
MBNA credit card...............19685.....553.4.....23.32
NATWEST Overdraft..............5000......50........18.26
Halifax credit card............10118.....101.2.....7.92

thehappybutterfly

Jamjaf wrote: »

Dear All - I have finally faced the facts and done the SOA calculater that almost made me throw up. I knew things were too tight, but not this bad. I think I need to tighten the belt hard on the outgoings, but also need some ideas on reducing the unsecured debt costs and re-financing the MBNA credit card so the balance starts reducing and the monthly payment is less. I would be so grateful for any ideas. To explain, the high child costs are school fees for 2 in their GCSE years, so we really don't feel we can pull them out to reduce that cost.
very many thanks in advance of your assistance.
:(

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 4660.27
Partners monthly income after tax....... 1600
Benefits................................ 188.4
Other income............................ 0
Total monthly income.................... 6448.67
Monthly Expense Details
Mortgage................................ 966.3
Secured/HP loan repayments.............. 0
Rent.................................... 439.27 is this for a 2nd property?
Management charge (leasehold property).. 0
Council tax............................. 160.89
Electricity............................. 103.23
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 46
Mobile phone............................ 90
TV Licence.............................. 12.12
Satellite/Cable TV...................... 35
Internet Services....................... 0
Groceries etc. ......................... 1000 - this can definitely be reduced by at least 50%.
Clothing................................ 50
Petrol/diesel........................... 260
Road tax................................ 330 - are you sure this is for a month?
Car Insurance........................... 60
Car maintenance (including MOT)......... 500 - again, a month?
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 150
Other child related expenses............ 790
Medical (prescriptions, dentist etc).... 28.5
Pet insurance/vet bills................. 30.99
Buildings insurance..................... 36.5
Contents insurance...................... 33.91
Life assurance ......................... 253
Other insurance......................... 30
Presents (birthday, christmas etc)...... 68
Haircuts................................ 20
Entertainment........................... 70
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 5573.71

Assets
Cash.................................... 0
House value (Gross)..................... 224999
Shares and bonds........................ 0
Car(s).................................. 2900
Other assets............................ 8224
Total Assets............................ 236123

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 157572...(966.3)....2.5
Total secured & HP debts...... 157572....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
sainsburys bank loan...........12778.....378.4.....6.95
sainsburys bank loan...........11903.....369.1.....8.7
MBNA credit card...............19685.....553.4.....23.32
NATWEST Overdraft..............5000......50........18.26
Halifax credit card............10118.....101.2.....7.92

I'm no expert but I think there's a lot you can do without changing your lifestyle too much. It looks awful when you see it in black and white but once you get some advice and maybe spot some (hopefully!) errors in your calculations, you'll feel much better. You will get lots of advice from the lovely folk on this forum. lots of luck

dark^knight

Hi,

There are definitely areas you can focus on to reduce your outgoings, which will help you to start repaying the nearly £60k of debt that you have.

Also, are there any things that can be sold on ebay etc.?

^dk^

MrsTinks

Car maintenance, life assurance and car tax... are these MONTHLY and not annual costs? If so then you need to address these!!!!!

Groceries - holy crap.... really? Do you feed all the kids friends too??? Seriously this HAS to be halved!!! Unless there are 5 of you on specialist diets and all different then this is WAY too high!!!

Also whilst your electric is high you have nothing for oil or gas - is your property purely heated by electric?

soxxxxy

Hi Jamjaf, your mobile bill seems high,is this for work or is it for more than 1 mobile ? Also there is nothing in for water rates ? Shop around for your buildings/contents insurance this seems quite high too

soxxxxy

Is your medical payment for prescriptions or dental care ? A breakdown of this might be helpful ?

Cynical_Monkey

I'm a long time reader with a few debts myself however, I thought this was a good time to get involved (finally)...

Buildings and contents insurance - £70.41 is a high total. As an example, why not go through Quidco and look at Sainsbury's for home insurance? For your property value and allowing for rebuild costs and £30,000 of contents, you could be paying £241 and get £80 cashback making the effective cost £13.41 per month.

Life Assurance of £3036 per year is hugely expensive - Consider looking at Cavendish Online for a cheaper quote assuming you don't have any long term illnesses and the term of your current agreement makes it worthwhile to switch.

£1000 per month on groceries can be cut by as much as half without too many major sacrifices - Eat healthily, cut out the costly snacks and pre-prepared food and you'll see this total drop significantly - A good tip is to go shopping with cash instead of cards, start initially by dropping to £200 per week and gradually drop by £5 every now and then until you find a balance between lifestyle and cost effectiveness. For a family of 4, we've dropped to just under £75 per week and this still includes a lot of things we don't need.

Gas & Electric of £103.23 I'm assuming is a combined bill from a dual fuel tariff - If this is the case, I would suggest doing a meter reading as and when the bills come in as normally, these bills are levied to avoid higher payments in the winter by paying a consistently high amount throughout the year. Either way, regularly switching is a great way forward especially in such a volatile market with everchanging prices - Again, check Quidco and Topcashback for good switching offers and don't forget to do the maths on the prices before you switch.

The credit cards are the big thing - What are the credit limits on the halifax card and the MBNA card as a balance transfer to a lower APR will help a little..? How is your current credit rating? Have you applied for more credit in the last year?

The two loans look like consolidation loans, is this the case and if so, did you consolidate the cards and then re-spend on them?

Other assets of £8,224 - Are these things you could do without or more importantly, are these things that could be sold?

Lastly, some of your costs are definitely over-estimated - Road tax and car maintenence are yearly costs so in reality, if you don't have more than £1500 left each month after paying for everything on your SOA, then you really need to start a spending diary and look through some old bank statements to see where the money is going. It'll almost certainly be the odd £10 here and the odd £20 there that's causing money to be tight.

Whatever happens, things could always be worse. Think positive and continue to be positive in your actions - You've taken the first step and that's always the biggest one.

moneybuster

you need to go back and do the SOA again break it down into monthly payments,

regards MB

Jamjaf

Wow!! Thank you all who have provided me with both support and specific advice so quickly. I have corrected the entries that were annual amounts rather than monthly, which puts me in a less drastic situation. Nevertheless, perhaps the mis-entries and the scare they gave me were just what I needed to stop this before it becomes irreversable. On my pay I should be extremely comfortable and not worrying every month if the mortgage is paid!
For clarity, the 'medical' monthly is for contact lense sbscription - we're seeing if we can cancel this today. The mobile phone cost is for 2 contract phones and 2 PAYG (£10 each pcm) - any way of getting out of vodafone contracts early? The electricity is actually electricity, gas and water rates combined.
We have started digging stuff out to sell: old mobile phones; ball gowns and a designer wedding dress that don't fit; a little sailing dinghy and trailer (only £200-300 but it will all help). We have also cancelled the SKY subscription which saves £50.75 pcm (incorrectly entered as £35).
The £1000 groceries was a complete wild guess. Not keeping a proper tab on how much we spend on what is one of the reasons I've got us in this position.:( That's a life lesson in itself and one I intend to share with my children.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 4660.27
Partners monthly income after tax....... 1600
Benefits................................ 188.4
Other income............................ 0
Total monthly income.................... 6448.67
Monthly Expense Details
Mortgage................................ 966.3
Secured/HP loan repayments.............. 0
Rent.................................... 439.27
Management charge (leasehold property).. 0
Council tax............................. 160.89
Electricity............................. 103.23
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 46
Mobile phone............................ 90
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 1000
Clothing................................ 50
Petrol/diesel........................... 260
Road tax................................ 27.5
Car Insurance........................... 60
Car maintenance (including MOT)......... 50
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 150
Other child related expenses............ 790
Medical (prescriptions, dentist etc).... 28.5
Pet insurance/vet bills................. 30.99
Buildings insurance..................... 36.5
Contents insurance...................... 33.91
Life assurance ......................... 253
Other insurance......................... 30
Presents (birthday, christmas etc)...... 68
Haircuts................................ 20
Entertainment........................... 70
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 4786.21

Assets
Cash.................................... 0
House value (Gross)..................... 224999
Shares and bonds........................ 0
Car(s).................................. 2900
Other assets............................ 8224
Total Assets............................ 236123

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 157572...(966.3)....2.5
Total secured & HP debts...... 157572....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
sainsburys bank loan...........12778.....378.4.....6.95
sainsburys bank loan...........11903.....369.1.....8.7
MBNA credit card...............19685.....553.4.....23.32
NATWEST Overdraft..............5000......50........18.26
Halifax credit card............10118.....101.2.....7.92

MrsTinks

Well you still have plenty of areas you can attack which is good Do try and post the SOA with the totals at the end (for those of us who can't do mental arrithmatic this early (or spelling for that matter))

Draw yourself up a list of things you need to do and start attacking

1) house and contents insurance
2) life assurance
3) Meal plan (actually on this one why not do a cupboard challenge in Dec? When I did this first time we only bought bread, milk and a few fresh fruits for the month! I'd hoarded that much in the freezer and cupboards!) - then you can go a little nuts at Christmas
4) Line up everything to be sold (somethings might be better off being sold in spring like the boat thingy and any summer clothes?) - make a listing plan!
5) Become the most/least popular person in your family/friends group... suggest a secret Santa or a max spend limit of £5 per adult I suggested this to my mum this year as we're spending nearly £600 in just getting home for Christmas... add in presents for nearly 10 extra adults and YIKES... so now we're all having to really think about the presents and there is a prize for the silliest and the best presents

tallyhoh

Sorry if I have missed it but why mortgage & rent? Your grocery bill & life assurance costs are really high!