How does our SOA measure up?? a bit worried about debts

Tommymax81

Hi Folks.

I am new to MSE. My partner and I often wonder how we measure up financially to others? People don't talk about debt and I often worry that we have too much, even though we make the payments etc.

I have included our SOA below. We are not accruing anymore debt and out existing debts are largely due to buying a house (too soon!!), having a baby ( worth every penny ) and also a bit of stupidity. The bulk of our CC debt is currently 0% and the loan is a decent rate at 8%.

As you will see, we do have a bit of cash available but we don't want to use all of that on debt repayments even though I know that financially it would make sense.

Whilst I am not frantic with worry, I do think that we should be in better financial shape for a couple with a decent income?

I would welcome any suggestions regarding ways that we could pay off debt quicker as well as any comments regarding our general financial situation!

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................ 2310
Partners monthly income after tax....... 923
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 3314.2
Monthly Expense Details
Mortgage................................ 497
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 103
Electricity............................. 50
Gas..................................... 90
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 5
Mobile phone............................ 60
TV Licence.............................. 14
Satellite/Cable TV...................... 17
Internet Services....................... 15
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 180
Road tax................................ 7
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 200
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 25
Contents insurance...................... 0
Life assurance ......................... 33
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 150
Emergency fund.......................... 0
Total monthly expenses.................. 1686

Assets
Cash.................................... 15850
House value (Gross)..................... 135000
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 154850

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 97000....(497)......1.5
Total secured & HP debts...... 97000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................5000......100.......0
credit card....................3000......60........20
loan...........................12105.....364.......8
car loan.......................3750......120.......9
Total unsecured debts..........23855.....644.......-

Monthly Budget Summary
Total monthly income.................... 3,314.2
Expenses (including HP & secured debts). 1,686
Available for debt repayments........... 1,628.2
Monthly UNsecured debt repayments....... 644
Amount left after debt repayments....... 984.2
Personal Balance Sheet Summary
Total assets (things you own)........... 154,850
Total HP & Secured debt................. -97,000
Total Unsecured debt.................... -23,855
Net Assets.............................. 33,995


thanks
TMX81 x x

bobmonkeydog

Whilst you have some debts to pay, you don't appear to be in dire straits yet, just make sure that you are not taking any more debts on.

Have you got a timescale in mind to clear your debts and would it be worth putting the £150 holiday budget towards this??

I would say that your situation is fairly typical these days although I still think that you should be trying to pay it off, as you clearly are. You also have a good income which makes all the difference

Good luck!!

ViolaLass

You've got £3k on a CC at 20% but you've got the cash to clear it.

Are you genuinely spending £0 on entertainment?

MFWannabe

Tommymax81 wrote: »

Hi Folks.

I am new to MSE. My partner and I often wonder how we measure up financially to others? People don't talk about debt and I often worry that we have too much, even though we make the payments etc.

I have included our SOA below. We are not accruing anymore debt and out existing debts are largely due to buying a house (too soon!!), having a baby ( worth every penny ) and also a bit of stupidity. The bulk of our CC debt is currently 0% and the loan is a decent rate at 8%.

As you will see, we do have a bit of cash available but we don't want to use all of that on debt repayments even though I know that financially it would make sense.

Whilst I am not frantic with worry, I do think that we should be in better financial shape for a couple with a decent income?

I would welcome any suggestions regarding ways that we could pay off debt quicker as well as any comments regarding our general financial situation!

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................ 2310
Partners monthly income after tax....... 923
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 3314.2
Monthly Expense Details
Mortgage................................ 497
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 103
Electricity............................. 50
Gas..................................... 90 - this seems high; check comparison sites to see if you can get cheaper
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 5
Mobile phone............................ 60
TV Licence.............................. 14
Satellite/Cable TV...................... 17
Internet Services....................... 15
Groceries etc. ......................... 200- is this really correct?
Clothing................................ 0 - You need something here
Petrol/diesel........................... 180
Road tax................................ 7
Car Insurance........................... 0 - You need something here
Car maintenance (including MOT)......... 0 - You need something here
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 200
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 -Never?
Pet insurance/vet bills................. 0
Buildings insurance..................... 25
Contents insurance...................... 0
Life assurance ......................... 33
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 - You need something here
Haircuts................................ 0 - You need something here
Entertainment........................... 0 - You need something here
Holiday................................. 150
Emergency fund.......................... 0
Total monthly expenses.................. 1686

Assets
Cash.................................... 15850
House value (Gross)..................... 135000
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 154850

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 97000....(497)......1.5
Total secured & HP debts...... 97000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................5000......100.......0
credit card....................3000......60........20 - Pay this off with savings
loan...........................12105.....364.......8
car loan.......................3750......120.......9
Total unsecured debts..........23855.....644.......-

Monthly Budget Summary
Total monthly income.................... 3,314.2
Expenses (including HP & secured debts). 1,686
Available for debt repayments........... 1,628.2
Monthly UNsecured debt repayments....... 644
Amount left after debt repayments....... 984.2
Personal Balance Sheet Summary
Total assets (things you own)........... 154,850
Total HP & Secured debt................. -97,000
Total Unsecured debt.................... -23,855
Net Assets.............................. 33,995


thanks
TMX81 x x

Hi
I've added some comments above, you have some figures missing from your soa. If the debt bothers you then work ahrd at paying it off so you'll be in a much better position of being completely debt free. You need to pay off the 20% APR card; you should not pay interest on debts if you have savings. When does the 0% end on the other credit card? When do the car loan and loan finish?

flyinggiraffe_2

seems to me that your debt is very manageable with your income as it is and you clearly don't want to add to the debt which is a great starting place.
A few quick things I've noticed:

Gas seems high (compared to my 3 bed house amount)- have you checked if this is The best deal for your area?
Mobiles - is this for 1 or 2 and could This be reduced by switching contracts?

I would look at moving the amount on the 20% card onto a 0% one and potentially reducing the holiday savings to £100 if you wanted to pay off the debts quicker.

If it was me I think I would also be tempted to pay up to 400 extra month repayments, which would still leave you with about 600 free each month, According to your SOA.

[Deleted User]

[QUOTE=Tommymax81;53849693

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................ 2310
Partners monthly income after tax....... 923
Benefits................................ 81.2
Total monthly income.................... 3314.2[/b]

Monthly Expense Details
Mortgage................................ 497
Council tax............................. 103If this is over the usual 10 months then you will have an equivalent amount to over pay debts with for two months (although they'll not be coming around soon
Electricity............................. 50
Gas..................................... 90Seems high
Water rates............................. 40
Telephone (land line)................... 5
Mobile phone............................ 60Do you use inclusive data, minutes, texts - compare with giffgaff
TV Licence.............................. 14
Satellite/Cable TV...................... 17
Internet Services....................... 15
Groceries etc. ......................... 200
Clothing................................ 0never? even with a growing child?
Petrol/diesel........................... 180
Road tax................................ 7
Car Insurance........................... 0??
Car maintenance (including MOT)......... 0??
Car parking............................. 0??
Childcare/nursery....................... 200do either of your employers offer a voucher scheme?
Other child related expenses............ 0??
Medical (prescriptions, dentist etc).... 0never??
Buildings insurance..................... 25I'n assuming this is buildings and contents combined
Contents insurance...................... 0
Life assurance ......................... 33
Presents (birthday, christmas etc)...... 0never?
Haircuts................................ 0never?
Entertainment........................... 0never?
Holiday................................. 150
Emergency fund.......................... 0
Total monthly expenses.................. 1686


Assets
Cash.................................... 15850Is this emergency savings? Or for something else? Seems strange to be paying car finance at8% when you're probably not even earning half of that in interest on savings, never mind the 20% you're paying for CC
House value (Gross)..................... 135000
Car(s).................................. 4000both cars?
Total Assets............................ 154850[/b]


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 97000....(497)......1.5
Total secured & HP debts...... 97000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................5000......100.......0When does the 0% end, will it be fully repaid by then? what will the interest rate be then?
credit card....................3000......60........20I'd pay this of at least with savings, you're probably not earning more than 3% in interest on savings
loan...........................12105.....364.......8I'd be tempted to pay this down a bit too - depends how necessary it is to have so much in savings, but does seem wasteful to be paying so much in interest when you are probably not earning half this on the amount in savings
car loan.......................3750......120.......9as above
Total unsecured debts..........23855.....644.......-


Monthly Budget Summary
Total monthly income.................... 3,314.2
Expenses (including HP & secured debts). 1,686
Available for debt repayments........... 1,628.2
Monthly UNsecured debt repayments....... 644
Amount left after debt repayments....... 984.2Do you actually have this left at the end of every month? - There seems to be quite a few things missing from your SOA, is this accurate

Personal Balance Sheet Summary
Total assets (things you own)........... 154,850
Total HP & Secured debt................. -97,000
Total Unsecured debt.................... -23,855
Net Assets.............................. 33,995

TMX81 x x[/QUOTE]

While you don't seem to be over spending, I would make sure that you are on the best deals/tariffs/rates of the things that you are paying (utilities/mobile/pay for TV), and really consider if it is worth your while having such high savings which are probably not earning much interest whilst paying 20, 9, 8% on debts. You can always build your savings up again once debts are down or gone. Can you switch any more of your existing debt to 0%?

Comments above,

D9

rising_from_the_ashes

Tommymax81 wrote: »

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................ 2310
Partners monthly income after tax....... 923
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 3314.2
Monthly Expense Details
Mortgage................................ 497
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 103
Electricity............................. 50 On the high side - as below
Gas..................................... 90 This is really high - check comparison sites & bills are accurate. Make sure you're not leaving things on in rooms when you're not in them, water on all the time etc
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 5
Mobile phone............................ 60 On the high side
TV Licence.............................. 14
Satellite/Cable TV...................... 17
Internet Services....................... 15
Groceries etc. ......................... 200
Clothing................................ 0 Need something in here
Petrol/diesel........................... 180
Road tax................................ 7
Car Insurance........................... 0 Need figure in here
Car maintenance (including MOT)......... 0 and here
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 200
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 Need figure in here
Pet insurance/vet bills................. 0
Buildings insurance..................... 25
Contents insurance...................... 0
Life assurance ......................... 33
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 Need something in here
Haircuts................................ 0 and here
Entertainment........................... 0 and here
Holiday................................. 150 On the high side
Emergency fund.......................... 0 Really need to get this sorted to stop more debts mounting (so you don't have to resort to your savings)
Total monthly expenses.................. 1686

Assets
Cash.................................... 15850
House value (Gross)..................... 135000
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 154850

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 97000....(497)......1.5
Total secured & HP debts...... 97000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................5000......100.......0
credit card....................3000......60........20
loan...........................12105.....364.......8
car loan.......................3750......120.......9
Total unsecured debts..........23855.....644.......-
While I can see your point for not wanting to use all the savings to clear the debts, it doesn't make any sense to have £3k on a credit card that you're paying 20% interest on when you have the money to clear it....

Monthly Budget Summary
Total monthly income.................... 3,314.2
Expenses (including HP & secured debts). 1,686 Need to add the missing figures to get a better picture of this
Available for debt repayments........... 1,628.2
Monthly UNsecured debt repayments....... 644
Amount left after debt repayments....... 984.2
Personal Balance Sheet Summary
Total assets (things you own)........... 154,850
Total HP & Secured debt................. -97,000
Total Unsecured debt.................... -23,855
Net Assets.............................. 33,995

thanks
TMX81 x x

As others have said, it's manageable but it makes sense to clear it now while you've got the funds to do so. There's a fair bit missing on the SOA which will change the figures a fair bit.

Do you actually have this money left each month? If not, try a spending diary for a couple of months and see where it's going - best of luck

mildredalien

As above posters have said, you seem to be managing your debts ok. Just wondering why you have built up the level of debt you have given your relatively high amount of savings? Generally the advice is to pay debts off rather than have savings, as the interest you earn on savings is usually way below the interest you accrue on debts. Why do you say you don't want to use your savings to pay off debts?

Personally I'd try and pay off all those debts ASAP then you can really focus on saving money for well, whatever you like! You seem to have a healthy surplus each month however it might be worth doing a spending diary to see if what you have in your SOA actually reflects what you spend. Perhaps you could get your bank statements for the last 3 months and see how much you take out in cash/pay on cards each month on 'extras' that don't appear in your SOA above.

Barbeduk

Sorry to disagree with everyone else but I think this is a massive level of debt to have at a young age. It's just daft to have savings while you owe money at 20%. If it were me I'd keep say £8k in saving and use the rest to repay some of the debts.

Trouble is, debt has a habit of growing, as I learned to my cost!

Also, as you have a child, your present fund definitely isn't zero!

Tommymax81

Thanks to everyone who has taken the time to post a reply. Hopefully I will be able to answer your questions in this post -

our debts were built up due to buying our house and having to do repairs/decorate etc, from having a baby and also through some stupidity on my part when I wanted things that I could't afford and the CC seemed the easy option!! No point in trying to deny it!!

The majority of our savings belong to my partner and most of our debts belong to me!! She would be more than willing to pay some of our debts off with her money but I am VERY uncomfortable with this. We also agreed that this money would be put away for when we move house in approx 4 years - when we are unsecured debt free. I know that we could pay the debts and then re-save the cash but I fear that our commitment to re-saving the money would not be as strong as our desire to pay off the debts in the way that we are now.

The £200 that I included for food is accurate. We don't spend a great deal on food and we prefer to cook from scratch. This isn't a financial this, we have always eaten this way. We are happy to take leftovers to work for lunch etch and we tend to buy a lot in bulk at the start of the month after we have planned our meals.

I didn't include anything for entertainment as I struggled to estimate an amount. Like most parents of young children our nights out are few and far between and usually consist of a meal at friends houses. I suppose a sensible figure would have been somewhere between £30-£40 although I am sure that there are months when we don't spend this.

We save £50 per month for christmas and I forgot to include this. This tends to cover food and presents. Fortunately we have a family policy where we only buy for the kids and this really helps.

I am confident that I can get a new 0% CC for the £3000 as I have decent credit. I should really have done this last month!! The loan doesn't concern me too much as the drop in our mortgage ( it fell by £200) covers the bulk of it and it is a decent rate at 8%.

I reckon that we can throw at least £350 per month at our credit card debt. This payment, coupled with the things that I didn't include on my SOA should still leave us with some surplus income. Our £150 holiday allowance is about to end as out hol is nearly paid for and over the next year my take home pay should increase by around £200 per month so we will then be able to use this money to pay off more CC debt.

Barbeduk - I completely agree that our level of debt is far too high but I can assure you it will not be growing, only shrinking! I often lie awake worrying about our level of debt. I really do feel guilty/irresponsible etc etc however I now need to focus on paying it off!! The only reassurance is that we have a decent income. Our household income is around £54,500 so our debt is approx 41% of that. Not sure how this compares in terms of debt to income ratio???

Thanks again

TMX:j

ViolaLass

Tommymax81 wrote: »

The majority of our savings belong to my partner and most of our debts belong to me!!

You have a baby together, aren't you an 'us' by now? I would never let my husband have debts at the level and interest rate that you do when I had the money to pay them off.

Your partner is clearly motivated to save, she's doing it. Couldn't you push yourself to be equally motivated once the debts have gone? At the moment, you're paying for the privilege of her having savings.