Newbie finally in a position to get debt-free...

HKitten

I'm finally joining this section of the forum, because my partner has finally got a job! He has had several issues with unemployment since we've been together and has now not worked since November, but luckily he was just offered a part time job and starts on Monday. And it's the kind of fairly simple job that I'm pretty sure can't go wrong. So I'm tentatively posting, since based on what his rate of pay will be, this should be accurate from the end of June.

Statement of Affairs and Personal Balance Sheet

Household 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................ 1193
Partners monthly income after tax....... 437
Benefits................................ 0
Other income............................ 200
Total monthly income.................... 1830

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 595
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 140 I should explain here - there was a mix-up when we first started paying and we were only paying half what we needed to by DD, so we built up arrears whilst being assured we were on the right tariff. So now we're paying off the backlog.
Gas..................................... 0
Oil..................................... 0
Water rates............................. 26 This is going down to £17 in about 3 months cos we can qualify for a cheaper rate apparently.
Telephone (land line)................... 10
Mobile phone............................ 55 This is both our phones, not just mine.
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 11
Groceries etc. ......................... 60
Clothing................................ 0
Petrol/diesel........................... 40
Road tax................................ 10
Car Insurance........................... 328 I know this will get comments - my partner drives the car, but he's had insurance cancelled once for giving them the wrong details (unintentional on our part but the damage is done now) and for having 9 points on his licence, 6 of which are coming off in July. I know it's a huge chunk, but we need the car.
Car maintenance (including MOT)......... 3
Car parking............................. 0
Other travel............................ 48 This is my monthly bus ticket.
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 9
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1498


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC...........................4000......98........17
Overdraft......................1000......0.........19
Total unsecured debts..........5000......98........-


Monthly Budget Summary
Total monthly income.................... 1,830
Expenses (including HP & secured debts). 1,498
Available for debt repayments........... 332
Monthly UNsecured debt repayments....... 98
Amount left after debt repayments....... 234

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -5,000
Net Assets.............................. -4,000

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using other browser.


This seems to be saying we should have about £200 left over each month after bills. I'll be putting at least £100 straight towards paying off my credit card, and the rest will probably go towards a) getting out of my overdraft bit by bit and b) being able to eat a little better since we're living off Tesco value meals.

Does this seem okay to you guys? I know the car insurance is a huge, huge bone of contention, but going back to being without a car would be so difficult I'm just hoping that it'll go down one day once his points have come off, though I don't know if the insurance cancellation ever stops being taken into account. Fingers crossed.

Tixy

Congratulations on OHs new job. Might he have the opportunity to work more hours sometimes do you think? Have you checked to see if you would be entitled to any tax credits between you?

Wow to the car insurance, that really is a scary figure. You don't actually seem to be doing very many miles at all in the vehicle if your fuel is £40 a month - is it really essential - and if so is it essential that he can drive it for the next few months? Could he not come off your policy until next renewal date?
Right, that said, I won't mention it again!

HKitten wrote: »

Statement of Affairs and Personal Balance Sheet

Household 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................ 1193
Partners monthly income after tax....... 437
Benefits................................ 0
Other income............................ 200
Total monthly income.................... 1830

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 595 is this competitive for where you live?
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 140 I should explain here - there was a mix-up when we first started paying and we were only paying half what we needed to by DD, so we built up arrears whilst being assured we were on the right tariff. So now we're paying off the backlog. how many months at this higher amount until the arrears are repaid? have you checked that you are on your suppliers cheapest tariff for your current usage?
Gas..................................... 0
Oil..................................... 0
Water rates............................. 26 This is going down to £17 in about 3 months cos we can qualify for a cheaper rate apparently.
Telephone (land line)................... 10
Mobile phone............................ 55 This is both our phones, not just mine.
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 11
Groceries etc. ......................... 60 Perhaps increase this on your budget to something you will find more comfortable to live to - so you can see what you will really have spare a month to put towards your debts.
Clothing................................ 0 is this realistic to spend nothing over a year? maybe budget a small amount for essentials
Petrol/diesel........................... 40
Road tax................................ 10
Car Insurance........................... 328 I know this will get comments - my partner drives the car, but he's had insurance cancelled once for giving them the wrong details (unintentional on our part but the damage is done now) and for having 9 points on his licence, 6 of which are coming off in July. I know it's a huge chunk, but we need the car.
Car maintenance (including MOT)......... 3 does this cover your annual service, MOT, things like new tyres etc?
Car parking............................. 0
Other travel............................ 48 This is my monthly bus ticket.
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 9
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1498


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC...........................4000......98........17
Overdraft......................1000......0.........19
Total unsecured debts..........5000......98........-


Monthly Budget Summary
Total monthly income.................... 1,830
Expenses (including HP & secured debts). 1,498
Available for debt repayments........... 332
Monthly UNsecured debt repayments....... 98
Amount left after debt repayments....... 234


This seems to be saying we should have about £200 left over each month after bills. I'll be putting at least £100 straight towards paying off my credit card, and the rest will probably go towards a) getting out of my overdraft bit by bit and b) being able to eat a little better since we're living off Tesco value meals.
Is the overdraft your current bank account? does the balance fluctuate in the month and this is the highest it goes to? As its a higher APR than the card you might want to target this beofre the current account.

Does OH have any other debts in his own name on top of what you have listed?

JustinCredibleGillespie

OMG! That car insurance is crazy! Could you change? I'm guessing it's not for a 1 litre Corsa?

JCG

xx

glasgowsaver2011

3k a year car insurance for a 1k car

But you only spend 10 quid a week on petrol

Can he not cycle?

HKitten

Thanks for the response Tixy I'm definitely hoping my OH can work more hours sometimes, it's doing warehouse and stock for T K Maxx so who knows? I'm just happy since it's better than the big fat nothing he's been bringing home so far.

Rent - it seems competitive, I've done some searching before to see what's comparable and to go any cheaper, we'd have to move into a shared house or a studio flat.

Electric - this is something I should look into. They said we should be paying £95 a month normally, so we're paying almost £50 more to tackle the arrears, and we were over £400 into it with them so I'm guessing it'll be a while yet.

Groceries - we're managing, it's just one of those things I wish we could increase because it's a bit miserable! I never buy anything fresh anymore except bread and milk, and we rarely buy treats.

Clothing - we honestly haven't bought anything new in a long time. It was one of the first things I decided to just put up with. I need new work shoes quite badly but I'm just putting up with it till I can afford them.

Car maintenance - I was unsure about this so I just did a rough MOT monthly cost. Since we can't afford to do anything else to the car, it's just not part of the budget. It has things that need doing at some point, luckily nothing urgent.

No other debts for OH. His credit is abysmal. No overdraft, no credit card.

The overdraft is on my current account yeah. You're right that makes more sense to come out of that first, I hadn't thought of that I just look and my credit card debt and think 'no! oh god how can I reduce this?!'

About the car. I know I might get some weird looks for this but here goes. Technically, we could manage without. It wouldn't be fun because we're both adults who are used to having the freedom of our own transport. But there's a bus system etc etc. The main problem is my partner. He has a big thing for cars, when we originally bought this I just told him how much he could spend and he found the best thing he could, and it'd devastate him to not be able to drive any more. He has a lot of issues with depression and if we can scrape by with it each month then I'd rather do that then take away one of the few things he gets much enjoyment out of.

It's also been a bit of a catch-22 because every time I thought about maybe cancelling the insurance and declaring it SORN, he'd get a job interview, or a temp job, and would then need the car to get there. And then it'd fall through and we'd be back to square one.

glasgowsaver2011

HKitten wrote: »

About the car. I know I might get some weird looks for this but here goes. Technically, we could manage without. It wouldn't be fun because we're both adults who are used to having the freedom of our own transport. But there's a bus system etc etc. The main problem is my partner. He has a big thing for cars, when we originally bought this I just told him how much he could spend and he found the best thing he could, and it'd devastate him to not be able to drive any more. He has a lot of issues with depression and if we can scrape by with it each month then I'd rather do that then take away one of the few things he gets much enjoyment out of.

.

I said this on another post to another Newbie

You have not reached your Light Bulb Moment yet.

Where you think.

This has to change.

You have a 1k car

You spend 3k a year on Insurance.

You spend 500 a year on petrol.

If you sold the car you would be 4.5k up on the deal.

Minus his bus ticket (600)

so you would be 4k better of by not having the car.

If his hobby was going to the football or fishing, would you think it was ok to spend 4k a year on that hobby.

We would not and none of us (I dont imagine) have any 4k hobbies.

Sorry to be so harsh, but get rid of this car and your debt is sorted

glasgowsaver2011

Clothing - we honestly haven't bought anything new in a long time. It was one of the first things I decided to just put up with. I need new work shoes quite badly but I'm just putting up with it till I can afford them.

Sorry I just noticed this

You are going without shoes for work but your partner is splaffing 4k a year on a car you dont need.

His wages barely cover his monthly outgoings (thats just for the car) and without him putting towards bills etc.

Reality check needed

antonia1

Firstly - you have my sympathies regarding depression. It is a much misunderstood illness but is horrible to live with. Although people don't talk about mental health problems very much, you are most certainly not alone.

Secondly - has your OH has any input to this SOA? Does he realise that his desire to have a car to play with is the reason you can't afford new work shoes, aren't eating properly etc?

Taxis to interviews would most cheaper overall than the car at the moment, and if he gets a better paid or full time job then you can reassess the situation.

HKitten wrote: »

It wouldn't be fun because we're both adults who are used to having the freedom of our own transport.

Paying off debt is never fun. Most people on this forum have had to give up things which we would previously have considered essentials.

HKitten wrote: »

He has a big thing for cars, when we originally bought this I just told him how much he could spend and he found the best thing he could, and it'd devastate him to not be able to drive any more.

You should be discussing between you whether you can afford to keep the car - it isn't you telling him, it is a joint decision. If he looks at it properly, I'd expect that it would devastate him even more that you can't afford to eat healthily because he wants a car.

Anyway, sorry if I've overstepped the mark and feel free to ignore any / all of my comments.

HKitten

Thanks Antonia, you didn't overstep the mark I think the biggest reason we've not done anything about it before is that we we are just about scraping by. It's hard to think 'we HAVE to give up the car' when we've been surviving as it is. I know we could afford a lot more in other areas if we cancelled the insurance and took it off the road, but I'm not sure whether the ensuing relationship stress would be worth it

I have been debating bringing it up, but it would have to wait till after the middle of July. My parents are taking us, my sister and her boyfriend and my other sister to Dorset on holiday for a week, which is lovely as they've offered to pay for all of us but we'll need to drive! Neither of my sister's drive so one is coming with us and the other and her boyfriend with my parents. My parents have already paid for the place we're staying and it's the only holiday we're going to have this year.

Maybe after that, I should bring up the idea?

Tixy

If I was in your position I would look at keeping the car on the road but only you being insured to drive it - at least until the next renewal date when you will know better if the cost will be less with him having less points on his licence.

Aside from that - when is the insurance next due for renewal?

If its not long after July then maybe thats the time to make a decision. You could probably stuggle through until then assuming his wages are wait you expect and he keeps the job. If at that point you find its still going to be almost as much a month even with the reduced points then you really need to think about what your prioritise and it perhaps cannot be his want of having a car he can drive.

mildredalien

It looks like you are in a good position to start tackling your debt, good for you!

My only comment to add to the above is perhaps you could arrange to hire a car when you need/would like one rather than owning a car that is costing you a great deal per year for not much use!! I do agree that it is a huge cost per year for a 'hobby' that has already landed your OH with 9 points in the past, hopefully he's not going to rack up any more Hey it would even be cheaper for him to do a few of those driving experience days per year than own a car!

Ooh I just thought of another question sorry! You say you are scraping by at the moment - without your OH being in work are you scraping by using credit cards or not? If he weren't to get this job for whatever reason, would you likely increase your debt? Just something to think about - there is already very little wiggle room in your SOA if you want to start making a dent in your debts!