SOA - please can you take a look and give me some advice please!

DCFC79

Tesco may be local to you but is there other supermarkets nearby you can use eg asda, sainsbury's etc as these could be cheaper than the Tescopoly, maybe try internet shop sainsbury's etc as you can usually find new customer discounts on the net.

Also have a look on the coupon board and HUKD for vouchers/coupons off items you would buy eg theres 1 for toilet roll 9pk which is on offer at morries.

Do you have any of the discounters close to you eg lidl, aldi etc or home bargains as these stores you can usually get shopping bill reduced, check out the aldi/lidl threads for what to buy or not to buy from there.

Barbeduk

I'd definitely not worry about the mortgage until the rest of it is gone (she said, not quite letting on the size of her own interest only mortgage).

If you want to knock back that 100k once the debt's gone you can head over to the mortgage free wannabe board for more fun and frolics.

poppy10_2

chesky369 wrote: »

although your general spending is high, it's the interest-only mortgage which will absolutely sink you in the long-term. This is the main thing you really have to address.

As stated above, the mortgage shouldn't be the priority to pay off while it is at such a low rate. But you should be aware how good you've got it at the moment. If and when your bank decides to shift you to a repayment mortgage, and assuming rates at a more reasonable 5%, your monthly payment will go up to around £950. You will be totally screwed. That's leaving aside the possibility of redundancy or illness taking away one of your incomes.

It doesn't seem like you've had your lightbulb moment yet. You are still trying to justify to yourself spending on luxuries like expensive holidays, Sky HD etc when you are in such a dire financial situation.

nicnicj

maybe, but I am trying... obviously not good enough for some of you though!! is £2,000 a year when you earn £60k between you really an expensive holiday??? bloody hell. that's cheap for the school hols!!

we have a mortgage guarantee that we are only 1% above base rate on our offset mortgage that we took out 7 years ago. before the rates fell a few years ago, we were paying way over the odds - about £800/900 a month interest and that was when I was on my career break and that is what stuffed us up as the interest rates then were about 6% or something. It's all coming back to me now.. amazing what having children does to your memory!

as for shopping elsewhere... yes there is an Aldi in town, but the nearest Morrisons, Asda and Sainsburys are 10 miles away which you would have to factor in fuel costs so doesn't make it viable to switch supermarkets, as much as I hate spending as much as I do at Tesco!

yes we have massive credit card debt but we are trying to do something about it!! I am not in denial... we both work bloody hard - 60+ hours a week...unfortunately when I had my children it wasn't an option to go back to work as the childcare would have been too expensive...

Malky

nicnicj wrote: »

Is £2,000 a year when you earn £60k between you really an expensive holiday?

No, not really but when you have £20K of unsecured debt then yes it is. By all means try and take yourselves and the kids on holiday but you have to start reigning in your spending and get those debts down.

ajbell

I'm not much older than you and i can remember when the base rate was 15%.

chevalier

My comments are in blue.

nicnicj wrote: »

Have tried calling the bank today to ask for a consolidation loan/extension to our mortgage but no joy as we want to borrow too much/don't earn enough. Welcome to the boards. The bank have done you a favour, even if it doesn't feel like it yet.

any advice much appreciated, thank you!!

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2Can you do without a car?

Monthly Income Details
Monthly income after tax................ 1234
Partners monthly income after tax....... 2200
Benefits................................ 135
Other income............................ 0
Total monthly income.................... 3569Any chance of upping the income.

Monthly Expense Details
Mortgage................................ 200 Wow great mortgage, is the rate fixed?
Secured/HP loan repayments.............. 343 Ouch is this also attached to the house, or some other item that could be sold?
Council tax............................. 153 You can ask for this to be paid over 12 months to help with budgeting.
Electricity............................. 65 For all utilities have you checked recently that you are on the cheapest tariff? If not then switch via quidco, or topcashback to get cash back too.
Gas..................................... 35
Water rates............................. 35
Telephone (land line)................... 25
Mobile phone............................ 65 Seems a bit high, can you check you are on the best deal, or ask to down grade? Do you use all of your current allowance a month?
TV Licence.............................. 12
Satellite/Cable TV...................... 40
Internet Services....................... 25 As others have said this seems a bit high. Can you bundle it via Sky and get it cheaper?
Groceries etc. ......................... 1000 I won't comment on the amount merely concentrate on what you can do to reduce it:). First of all take the time to inventory your store cupboards and freezer so you know what you have already. I am betting that you have at least a weeks worth of meals (allowing for buying veg) in your house already.

Next do you have a day which you (and OH?) can concentrate on batch cooking meals? Eg spag bol, chilli, stews etc. That way you have things you can pop in the microwave on those too tired to cook days?

There are several threads on the Old Style Boards that have nutritious and cheap meals to help you save on this area.

Next is to meal plan around what you have already. Whenever I 'think' I don't have any food in, I literally take a pen and paper and list everything I have in the house, and then make a challenge of how far into the future I can meal plan the evening meal. Sometimes I have managed to plan 3 weeks into the future, and thus save myself a shed load of money! And you don't have to be rigid in what you have on what day, just have to make sure you have the ingredients in the house.

Shop with a list. Yes I know it is a bit geeky but it really does work. When I started out on my journey I was easily spending 800 a month on food and 'stuff', but having the list meant I literally halved that. And even now I am just being frugal rather than paying debts I still have my trusty list.

Shop without children if they guilt you into treats as you go round.

Ref the distance to other shops than Te*co, have a look at what you want to buy on mysupermarket.com I think it is. It will give you a good indication as to whether you will save more that you use in petrol. Also if it is only 10 miles to some of these supermarkets, you are more than likely in their delivery area, so you would save on your shop and on the petrol. You often get free delivery codes on here as well.

Don't be afraid to down shift brands, some things you really won't be able to tell the difference. Eg chopped tomatoes, the price difference between the branded, and the value tins is what 40 or 50p a tin, yet they still taste the same in a bolognase! There are some things I don't change, like coffee, loo roll, and eggs, but everything else is up for trying the cheaper brand of.

You mentioned that you entertain alot. Can you start asking people to bring the sweet or the starter? Or quietly reduce the amount of times a month you do entertain?

Do you have an open air market near you? I shop for veggies at mine, and often come home with two bags of veggies for very little, and a lot less than from a supermarket.

Don't be afraid of the woopsie aisle!! As long as you are going to freeze it, meat will keep fine, and you can often get good quality meat for pennies.

I hope these suggestions will hope you focus.
Clothing................................ 150 Again where do you shop? Can you down shift brands, ie buy from supermarkets Primark etc? Can you shop out of your wardrobe? Ie looking at what you have and mixing and matching new outfits? How much stuff haven't you worn for a year? Will you ever wear it again? If not then sell it on ebay, same with the kids clothes that they have grown out of. Yes it is a faff, but Turbolister makes it much easier to list when you have a minute.
Petrol/diesel........................... 100 This was why I wondered about the two cars. I use more petrol than this in one car, so do you really need two? I am guessing one isn't used much?
Road tax................................ 25 Is this right for two cars?
Car Insurance........................... 75 Is this for two cars? Even if so I am pretty sure you could get this cheaper.
Car maintenance (including MOT)......... 15 This is only 180 a year, I am guessing the services cost more than this, so maybe when you are saving on your groceries (see I have faith in you:)) you can increase this a bit.
Childcare/nursery....................... 80
Other child related expenses............ 100 Actually
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 14
Buildings insurance..................... 14
Contents insurance...................... 15
Life assurance ......................... 21
Other insurance......................... 0
Presents (birthday, christmas etc)...... 70 This is 840 a year, can this be cut back? How about trying for a money neutral rest of the year with regards presents? Ie you sell things to buy the new things.
Haircuts................................ 20
Entertainment........................... 150 This is on top of the sky and the kids activities, so this seems a bit high.
Holiday................................. 200 How about visiting relatives for free this year. Or if you do go on holiday try doing it on a budget, ie have a staycation. You take time off but visit cheap/free things in your area. I know I am guilty of ignoring all of the 'sites' around me.
Emergency fund.......................... 0This is a kind of tricky one. I think you will have enough spare cash to put something here. The thing without having something to fall back on it often means that when an emergency payment is needed, it has to go on the very credit cards you are trying to clear.....
Total monthly expenses.................. 3047


Assets
Cash.................................... 0
House value (Gross)..................... 240000
Shares and bonds........................ 0
Car(s).................................. 10000 Can you down grade and free up some of this to pay off the debt
Other assets............................ 9000Same here too.
Total Assets............................ 259000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 160000...(200)......1.5
Secured Debt.................. 8000.....(343)......8ouch
Total secured & HP debts...... 168000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
halifax........................3600......36........0
aa.............................3000......30........0
nationwide.....................2600......30........0
virgin.........................6150......62........0
bt visa........................444.......25........0
barclaycard....................3100......72........0
tesco..........................1300......50........18.6
santander......................500.......90........22.6
Total unsecured debts..........20694.....395.......-
Even if only for yourself, you need to find out the correct apr for all of these debts. Otherwise you can't prioritise which ones to clear first to minimise the interest you have to pay. Once you do know the APRs, then you can use the snowball calculator to give you a debt free date.

Monthly Budget Summary
Total monthly income.................... 3,569
Expenses (including HP & secured debts). 3,047
Available for debt repayments........... 522
Monthly UNsecured debt repayments....... 395
Amount left after debt repayments....... 127 So first thing is yeah, you have some money left at the end of the month. But do you really? If you don't know where this 127 is going, then yep you BOTH need to do a spending diary. It can be quite a sobering experience, see just how much one can spend on coffee and magazines (my down fall at the beginning).

Personal Balance Sheet Summary
Total assets (things you own)........... 259,000
Total HP & Secured debt................. -168,000
Total Unsecured debt.................... -20,694
Net Assets.............................. 70,306[/b

The good news is that you have spotted the problem before it gets any worse. Now is definitely the time to concentrate on paying this back, for two main reasons. The first is that your children are quite young still. Right now they won't notice economies that they will notice when they get older (just having the why can't I have a phone conversation with my oldest SIGH). Secondly the mortgage interest rates are only going to go up from here. If the interest rate went up 2% I am guessing your 127 surplus a month would be gone pretty much.

So now is the time to pull the belts tighter. You have the money to do it. Now you just need the collective will..

Good luck
chev

nicnicj

ajbell wrote: »

I'm not much older than you and i can remember when the base rate was 15%.

i'm not really sure how this is helpful at all?
i've asked for advice not patronising comments.

XXSCOTSLASSXX

nicnicj wrote: »

i'm not really sure how this is helpful at all?
i've asked for advice not patronising comments.

yes uv asked for advice, however having read through the thread any advice that has been given you have come back with an 'argument' as to why that is rather than an acceptance for change.... people are not being rude or patronising, until uv fully had LBM you will not be accepting to any comments outwith your own perception...

realistically going by your soa u have £127 a month spare, £32 a week paying only min payments on your debts and no repayment on mortgage, unless u seriously accept u need to cut back on luxuries u will never pay off the cc debt never mind the mortgage.... as you have said you take in 60k per year which yes is a great wage and managed properly would give a lovely lifestyle.... yet u have amassed some £20k debt in credit cards a red flag that you are living way beyond ur means... please dont think im being patronising or rude some very good advice has been given so far, groceries, holidays etc try accepting it and see how it goes x good luck

nicnicj

i have accepted it and if you read back through my posts I have thanked several people for their advice. In fact the majority of posts have been extremely helpful.

However that one on interest rates was not helpful - it was patronising!

I am fully aware of where we have gone wrong which is why I have posted on here and why I have asked for help. I don't think I have come back with an argument about things - people have asked me questions about my situation and I've tried to answer them.
bloody hell!! Basically we will cut back massively on groceries, clothes, entertainment and luxuries until we start seeing some inroad into the debts. I KNOW THIS SO PEOPLE CAN STOP TELLING ME NOW!!!

I now have a 4 year plan to get rid of our debt... so thank you for all your help (those who actually tried to help me rather than just patronise me!)