Sticky situation advice please

redpete

Some comments on the SOA:

Electricity and Gas look high - I thought ours were high enough at about £70 a month each.
£600 on groceries is huge.
£45 on TV could be saved.
£60 car insurance is high - is there a reason (accidents / convictions)? If not shop around.
Leaving out pet costs because they're high seems odd.
Do you really spend nothing on entertainment, haircuts, presents, holiday?
If you or your wife are driving enough to spend £140 a month on fuel I guess it would be difficult to stop entirely. Maybe trade down to a cheaper car?

If you are confident that things will turn round relatively quickly then interest only on the mortgage could help - but if not then it's just putting off the problem that will hit you eventually.

What's the plan if/when you sell the house? Rental or smaller/cheaper house?

RAS

I qam going to be brutal here as you need to cut back to balance the budget and then cut back to pay off the debt.

Aviator_Man wrote: »

Household Information
Number of adults in household........... 3
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1831
Partners monthly income after tax....... 600 - why only two incomes?
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2431

Monthly Expense Details
Mortgage................................ 610
Council tax............................. 264 - this is high, have you check if it is right?
Electricity............................. 110 - very high
Gas..................................... 110 - very high - do you have debts? Otherwise you should be on £110 for both combined.
Water rates............................. 55
Telephone (land line)................... 29 - a bit high given it does not include internet
Mobile phone............................ 35 - can you cut back - even go PAYG?
TV Licence.............................. 13
Satellite/Cable TV...................... 45 - has to go
Internet Services....................... 15
Groceries etc. ......................... 600 - for three adults £200 - 250 would be good. £300 would be considered very generous by most people on this forum
Clothing................................ 0
Petrol/diesel........................... 140 - are all journeys necessary?
Road tax................................ 21
Car Insurance........................... 60 - this is high. Why?
Car maintenance (including MOT)......... 50
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 24
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Overdraft fee........................... 35 - you need to get rid of this. it is not listed in debts and needs to be included
Account fee............................. 10
Total monthly expenses.................. 2226


Assets
Cash.................................... 0
House value (Gross)..................... 625000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 640000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 105853...(610)......2.5
Total secured & HP debts...... 105853....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Lloyds loan....................3658......165.......6
Lloyds loan2...................5142......138.......6
Barclaycard....................12507.....250.......20
Lloyds card....................7847......131.......20
Total unsecured debts..........29154.....684.......-


Monthly Budget Summary
Total monthly income.................... 2,431
Expenses (including HP & secured debts). 2,226
Available for debt repayments........... 205
Monthly UNsecured debt repayments....... 684
Amount short for making debt repayments. -479

Personal Balance Sheet Summary
Total assets (things you own)........... 640,000
Total HP & Secured debt................. -105,853
Total Unsecured debt.................... -29,154
Net Assets.............................. 504,993

Created using the SOA calculator at.

You need to add in all the expenses like hair and cuppas out.

Basically you (or your OH) is living like you have money that is coming in.

You need to retrench urgently.

I would suggest that all three adults keep strict spending diaries for the next month.

bazzer86

Sell car and try get early settlements from the creditors , most will settle at a lower amount if offered up front

Aviator_Man

Thanks for the comments so far.

There are only two incomes as my son is at home and his income covers his outgoings (just).

The council tax is correct...we live in a large 5 bed property. The gas and electric bill for the last quarter was about £850 and I elected to spread this out monthly.

I'll look into BT, we don't use the landline much so I think it's mostly line rental. I've moved my phone to PAYG but the wife's is tied into that contract.

Yep Sky is going.

I have no idea how the shopping bills are so high, I think the wife finds it hard to stick to a budget and tends to buy the dogs treats as well as us! I.e. chickens for the dogs and port for myself. I agree, it needs to be reigned in as it's quite ridiculous...general thoughts are then that I should be able to half the shopping bill? We live near to London if that makes any difference?!

Yes all fuel is practically to/from work, no more drives for the sake of it. The car insurance is £600/year approx as the car was £30k new and is a 4x4...again I think we need rid!

Pet costs were left out because it's hard for me to know what they cost, mainly because my OH takes care of them usually.

The plan is to downsize and release equity to clear unsecured borrowings and a large chunk of the mortgage.

"Basically you (or your OH) is living like you have money that is coming in.
You need to retrench urgently." - I completely agree with this.

Aviator_Man

bazzer86 wrote: »

Sell car and try get early settlements from the creditors , most will settle at a lower amount if offered up front

This is interesting, would it involve that debt management plan type arrangement?

downsizer3

I'd seek some debt advice quickly but firstly rein that spending in - the groceries / supermarket budget is very high. Is your OH buying into all this? - sounds like she's not really on board.
If so - sit her down pronto and drum it in. Bingo and haircuts have to go - as does that car.

Lovelyjoolz

To keep my post shorter, I've just quoted the bits of your SOA that alarmed me:

Aviator_Man wrote: »

Council tax............................. 264 - Check your banding is correct because this is extremely high
Electricity............................. 110 - Ludicrous
Gas..................................... 110 - As said before, you should be getting BOTH gas and electricity for this much a month. Less if you don't put the heating on.
Water rates............................. 55 - A water meter might help - I pay £29 a month and we use a LOT of water.
Satellite/Cable TV...................... 45 - Get rid
Groceries etc. ......................... 600 - Really? £600 a month to feed 3 adults suggests you're buying too much caviar and champagne. This is probably the easiest thing to cut down on. Halve it, at the very least.
Petrol/diesel........................... 140 - A month?? Poor fuel efficiency or very long distances?
Car Insurance........................... 60 - Very high - shop around for a better quote ASAP
Car maintenance (including MOT)......... 50 - Does it REALLY cost you £600 a year to keep your car on the road? Is it a Ferrari?
Medical (prescriptions, dentist etc).... 0 - You don't ever have any prescriptions and you never visit the dentist?
Pet insurance/vet bills................. 0 - You have them, so add them in
Presents (birthday, christmas etc)...... 0 - Are you mean or do you just not budget for these? :rotfl:
Haircuts................................ 0 - None? Ever?
Entertainment........................... 0 - None? Ever?
Holiday................................. 0 - None? Ever?
Emergency fund.......................... 0 - You need to put something in here, even just a few pounds a month.
Overdraft fee........................... 35 - Get rid ASAP. That's £420 a year you can ill afford.
Account fee............................. 10 - Do you need this? DO you really use the benefits that this £120 brings??
Total monthly expenses.................. 2226

Selling the car sounds like the best idea. It costs you £3,000.00 a year to run it.

All in, that's £780 a month you could save....

glasgowsaver2011

Cut down on the good life.

No frills for a few months...

Will sort itself out quickly

I was going to buy 2 danish pastries (mr s) this morning for a mid morning work treat - but didn't... I don't require them! It may only have been £1.20 but it will all add up (also they are not good for me)

Barbeduk

Could I just say that I really admire everyone who is honest enough to post their SOA. If I'd done mine from last year I would have been slaughtered on here!:D

I hope you don't mind me asking 2 things? Firstly, has your wife seen the SOA? Because it really does show where money is seeping away. Also, she'll see the gaps for entertaining, presents (XMAS!!) etc and she'll know darned well how much is spent on those. If she's anything like my mum she'll spend a fortune.

Also, you mention your wife is retired and I am assuming (I don't know why) that this is early retirement. If it is, could she get a part time job while you sort this out? If you are both over 60 could you sell the car and use the free bus pass?

With regards to your son, if he is an adult, could you perhaps be charging him rent?

Like I said at the beginning, my spending was totally out of control but I can't believe how far we've come in such a short time thanks to the advice on this forum.

FireWyrm

Aviator_Man wrote: »

Thanks for the comments so far.

The council tax is correct...we live in a large 5 bed property. The gas and electric bill for the last quarter was about £850 and I elected to spread this out monthly.

Any chance of a lodger? You have 5 bedrooms but only 3 adults. You could take on two lodgers, provide B&B and charge (depending on where you are) something like £250 each room a month. Check out the government 'Rent a Room' scheme, that lets you earn some of it tax free!

Aviator_Man wrote: »

I'll look into BT, we don't use the landline much so I think it's mostly line rental. I've moved my phone to PAYG but the wife's is tied into that contract.

Ditch the LL. anyone you want to speak to will have your mobile and you only pay for outgoing calls. Most people dont get anywhere near their free allowance each month, so to pay for a BT line is madness if you dont need it.

Aviator_Man wrote: »

Yep Sky is going.

Freeview, Books, Walks with the Dogs, Scrabble, Monopoly, Crafts, Model Making etc. I guarantee you wont be bored in the evening.

Aviator_Man wrote: »

I have no idea how the shopping bills are so high, I think the wife finds it hard to stick to a budget and tends to buy the dogs treats as well as us! I.e. chickens for the dogs and port for myself. I agree, it needs to be reigned in as it's quite ridiculous...general thoughts are then that I should be able to half the shopping bill? We live near to London if that makes any difference?!

I feed 2 adults and 2 growing children on £100 a month. I do this because I can cook and I buy cheap and in bulk. It just takes organisation, determination and a little bit of common sense. Dont feed dogs chickens, bones can shatter and get lodged in their stomachs. If you must feed a dog on good quality meat, buy scrag and offcuts. Most butchers will sell you offcuts for a fraction of the cost of dog food and the dogs will think their eating in a 5 * restaurant.

Aviator_Man wrote: »

Yes all fuel is practically to/from work, no more drives for the sake of it. The car insurance is £600/year approx as the car was £30k new and is a 4x4...again I think we need rid!

Oh yes, it needs a new owner and fast.

Aviator_Man wrote: »

Pet costs were left out because it's hard for me to know what they cost, mainly because my OH takes care of them usually.

No more doggy blow dries.

Aviator_Man wrote: »

The plan is to downsize and release equity to clear unsecured borrowings and a large chunk of the mortgage.

I'm not convinced this is necessary or right at the moment. Especially with the suggestion above. You could turn it into an earning opportunity instead. Dont go off half cocked because you're frightened right now. There are other options

Aviator_Man wrote: »

"Basically you (or your OH) is living like you have money that is coming in.
You need to retrench urgently." - I completely agree with this.

Most people do, dont take it personally. :T