wake up and smell the debt !

MURPHY29

:eek:Hello everyone, I have been reading these posts for sometime from you all, and have been inspired to sort out my own debt mess. I'm not even sure how to use the 'thread' etc. so bear with me..I think just writing it down will help me so here goes..

My OH and I have had good jobs until the last few years and our income has practically halved.
My OH has a small business that has suffered, however he continues with this part time but it is unpredictable, he has managed to get a full time job for a steady income although his earnings are now in total, much less than a few years ago. My earnings are part time ( had my hours reduced due to cuts)
we have run up credit card debts of £10k and have car loan, mortgage etc
we have overdraft £3k
Every week is a struggle just for everyday living
I keep transferring the credit cards so that we dont pay interest but the whole juggling act is getting out of hand - any advice is appreciated on how to manage things better.

Tixy

Hi Murphy and welcome

I think the best starting point is to take a really critical look at your finances and to work out exactly what you have guaranteed coming in a month, and how much you are currently spending. From there you can determine if you have a shortfall and if your debts are still rising.
If you have a surplus then thats good news and you need to see if your debts are reducing by that amount per month - if not then maybe something is missing from your figures.

We use the statement of affairs calculator to do that, as it helps remind you of a lot of costs people often forget to budget for - http://www.makesenseofcards.com/soacalc.html

A lot of people will post their statement of affairs on here for feedback and suggestions - but even if you don't feel ready to do that I would certainly complete it to get a real feel for where you are at the moment.

sugarcube84

the first thing people will do is tell you to post a SOA (statement of affairs) which basically lists your income and expenditure. Even though you might know everything you pay for on a monthly basis its always good for a fresh pair of eyes to have a look, i don't think i've seen one yet where people haven't been able to identify a saving.

Good Luck!!

MURPHY29

Thank you for your replies
Here goes:
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 861
Partners monthly income after tax....... 1213
Benefits................................ 135
Other income............................ 300
Total monthly income.................... 2509
Monthly Expense Details
Mortgage................................ 489
Secured/HP loan repayments.............. 323
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 129
Electricity............................. 43
Gas..................................... 100
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 50
Mobile phone............................ 110
TV Licence.............................. 12.67
Satellite/Cable TV...................... 26.5
Internet Services....................... 10
Groceries etc. ......................... 320
Clothing................................ 20
Petrol/diesel........................... 160
Road tax................................ 30
Car Insurance........................... 37.22
Car maintenance (including MOT)......... 25
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 9.99
Buildings insurance..................... 20
Contents insurance...................... 8.22
Life assurance ......................... 17.9
Other insurance......................... 21.02
Presents (birthday, christmas etc)...... 30
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
SAVINGS................................. 60
CHILD SAVINGS........................... 40
SUBSCRIPTION CHILD...................... 15
Total monthly expenses.................. 2289.52

Assets
Cash.................................... 100
House value (Gross)..................... 195000
Shares and bonds........................ 0
Car(s).................................. 11500
Other assets............................ 0
Total Assets............................ 206600

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 136000...(489)......4.99
Hire Purchase (HP) debt ...... 800......(16).......0<
van loan.......................3200.....(109)......0<
car loan.......................0........(198)......0
Total secured & HP debts...... 140000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
LTSB...........................1005......20........0
ltsb...........................6522......66........0
VIRGIN.........................2750......25........0
ODRAFT.........................3000......0.........0
ARGOS..........................304.......25........0
M&S............................600.......20........0
Total unsecured debts..........14181.....156.......-

Monthly Budget Summary
Total monthly income.................... 2,509
Expenses (including HP & secured debts). 2,289.52
Available for debt repayments........... 219.48
Monthly UNsecured debt repayments....... 156
Amount left after debt repayments....... 63.48
Personal Balance Sheet Summary
Total assets (things you own)........... 206,600
Total HP & Secured debt................. -140,000
Total Unsecured debt.................... -14,181
Net Assets.............................. 52,419

Tixy

Great.
Which of the debts is 0%? are they all at the moment? including the overdraft?

Are those minimum payments on all the debts?

At the moment it looks like you can just about manage with just £60 or so extra to put to the debts each month.

I guess ideally you want to be able to pay more to the debts each month? I've put a few comments as to what changes you might want to consider / areas to look at to try to free up a bit more money.

MURPHY29 wrote: »

Thank you for your replies
Here goes:
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 861
Partners monthly income after tax....... 1213
Benefits................................ 135
Other income............................ 300
Total monthly income.................... 2509
Monthly Expense Details
Mortgage................................ 489
Secured/HP loan repayments.............. 323
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 129
Electricity............................. 43
Gas..................................... 100 this gas seems fairly high - does this include paying off any arrears? have you tried looking on the comparison sites recently to see if you can find a cheaper tariff or cheaper supplier?
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 50 this looks quite high - what sort of calls are you making a lot of that maje it high? have you considered looking for a combined deal for tv/intenet & phone, which can be a lot ess than £86 a month?
Mobile phone............................ 110 this looks high, how many phones is this? have you tried shopping around for cheaper deals (there are some deals that are near unlimited for around £35/month). If you are in a contract maybe see if you can drop down a tariff?
TV Licence.............................. 12.67
Satellite/Cable TV...................... 26.5 could you combine with phone & internet or consider ditching and usin freeview?
Internet Services....................... 10
Groceries etc. ......................... 320 Some can manage on less that this, although its not super high, maybe see if you could try reducing by £10 a week to see how you get on?
Clothing................................ 20
Petrol/diesel........................... 160
Road tax................................ 30
Car Insurance........................... 37.22
Car maintenance (including MOT)......... 25
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 9.99
Buildings insurance..................... 20
Contents insurance...................... 8.22 do you shop around for B&C at renewal time?
Life assurance ......................... 17.9
Other insurance......................... 21.02 what does this cover? and have you shopped around to check its a good deal?
Presents (birthday, christmas etc)...... 30
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
SAVINGS................................. 60 how much do you have saved? what APR are those savings earning? if its less than the highest APR debt then its cheaper to use this to pay off your debt.
CHILD SAVINGS........................... 40 obviously a personal choice but if you are really struggling then maybe consider halving in the short term?
SUBSCRIPTION CHILD...................... 15
Total monthly expenses.................. 2289.52

Assets
Cash.................................... 100
House value (Gross)..................... 195000
Shares and bonds........................ 0
Car(s).................................. 11500
Other assets............................ 0
Total Assets............................ 206600

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 136000...(489)......4.99
Hire Purchase (HP) debt ...... 800......(16).......0<
van loan.......................3200.....(109)......0<
car loan.......................0........(198)......0 how much longer left on this?
Total secured & HP debts...... 140000....-.........-
Unsecured Debts what are the APRs on all your debts? if 0% when do they finish and what APR will they go to?
Description....................Debt......Monthly...APR
LTSB...........................1005......20........0
ltsb...........................6522......66........0
VIRGIN.........................2750......25........0
ODRAFT.........................3000......0.........0
ARGOS..........................304.......25........0
M&S............................600.......20........0
Total unsecured debts..........14181.....156.......-

Monthly Budget Summary
Total monthly income.................... 2,509
Expenses (including HP & secured debts). 2,289.52
Available for debt repayments........... 219.48
Monthly UNsecured debt repayments....... 156
Amount left after debt repayments....... 63.48
Personal Balance Sheet Summary
Total assets (things you own)........... 206,600
Total HP & Secured debt................. -140,000
Total Unsecured debt.................... -14,181
Net Assets.............................. 52,419

There is definitely some scope to free up a bit more towards debts a month and to make a better dent in to them (and ensure they don't keep increasing). Obviously not all the suggestions will be practical to you, but worth having a think about them.

MURPHY29

Thank you for your help Tixy
Gas and elec are combined at £143 I'm need to check which is higher because the DD has just changed from £88 in January.
I will look at the phone account, and OH is going to get quotes for combined broadband etc., mobiles is 4 phones (includes teenage kids) , my contract ends in May and I am going to get the minimum.
car loan is 8000 - not sure of the APR's I need to sort paperwork

Googlewhacker

A couple of questions...

Did you question the energy company when they decided to up your direct debit by 75%? Are you in arrears?

Either way, £143 a month or £1716 a year is a lot, need to get the kids and yourselves into the energy saving habit.

Are the kids of the age to work and are any of them working because if they are they should be paying for their mobiles now and contributing a little to the running of the household (even if its just a token amount)

I would also stop the child savings but maybe keep a total of what you would have put in so when times are better you can effectively pay this debt of without the added pressure.

HTH

Personally I would save a few hundred quid for emergancy but then pay the £60 of a debt.