3 kids, 2 chickens, 4 debts...

robberbutton

Hi, I wanted to post an introduction as I'm excited to get started sorting out my debts, I hope it's ok to do it here. I haven't figured out the signature thing yet but here's a basic run down of where we are. It's very rough as we're on holiday so I don't have all the paperwork, but I think that having the free time to think has made it possible for me to start to get my head round this, and I don't want to lose momentum!

Husband's Guitar: £350 (paying off £50 a month, interest free)
Car: ~£5500 (paying off £160 a month, around 2 or 3% interest as done through work)
Student Loan: ~£8000 (paying off £170 a month)
Parents: £16,500 (for house, was £20,000 but paid some off already).

It's the last one that is the biggie and that I'm worried about, because I really want to give my parents their money back. We don't have an official payment plan in place, and they're always telling us not to worry about it at the moment. We've been paying back in dribs and drabs, giving them larger chunks when for instance DH gets his bonus. But I think about it a lot and want to deal with it.

Another worry is that we have to take our car to the garage today as it's leaking coolant! I have no idea how serious it is but it just goes to show what kind of things crop up.

Thanks for reading, I will try and post a more accurate assessment later, including an SOA.

robberbutton

Well DH took the car to the garage and they reckon it's ok, thank God! So, a bit more background: DH and I are both 31. We've been a single income family since our second child was born, early 2008. I am now a SAHM with 3 kids and 1 on the way. I have supplemented our income via the Matched Betting forum (brilliant) but I don't have time even for that now.

Debt wise, I haven't worried about it up till now (except what we owe my parents). We can afford the monthly repayments on everything, although we have v little savings and no pension, which doesn't sound great.

However, on holiday (house swop so nice and frugal) I read one of our host's books called Organised Simplicity with a chapter on Dave Ramsey and his babysteps. I guess that was my LBM (yesterday!) - we are treading water with our finances, but could be doing a lot more.

We have the £1000 Emergency Fund he suggests (the total of our savings) and so now it's on to step 2: pay off all debt using the debt snowball method.

I did a spreadsheet and just making minimum repayments the guitar should be paid off Feb 2013. Adding that money to the car loan will repay it Oct 2014. The student loan repayment date is July 2015. Having paid my parents back £100 a month up till then, we'll be able to up that to £500 and pay them back by Oct 2017.

The plan of course is to make savings in our budget, and pay everything off earlier than this. Who knows what life will throw at us though! It's daunting writing it down, but I guess that's the point - better than sticking your head in the sand.

robberbutton

Statement of Affairs & Personal Balance Sheet

Summary
Total monthly income 2,540.4
Monthly expenses (incl. HP & secured loans) 1,711.49
Available for debt repayments 828.91
UNsecured debt repayments 320
Amount left after debt repayments 508.91 (not entirely accurate as this money is for everyday expenses that change each month - cash, takeaways, books -we HE- extra travel, house expenses, bike repairs, friends' presents, children's shoes etc. It's this we need to work on. At the moment we only have about £40 a month extra )

Personal Balance Sheet Summary
Total Assets (things you own) 267,000
Total Secured & HP Debt -175,200
Total Unsecured Debt -24,850
Net Assets 66,950

Household Information
Number of adults in household 2
Number of children in household 3
Number of cars owned 1

Income
Partners monthly income 2352
Benefits 188.4 (CHB)
Total monthly income 2540.4

Expenses
Mortgage 382 (Interest Only)
Secured/HP loan payments 160
Council tax 122
Electricity 30
Gas 30
Water Rates 33
Telephone (land line) 25
Mobile phone 40 (mine and DH)
Internet services 5.99 (Netflix)
Groceries etc. 334
Clothing 20
Petrol/diesel 60
Road tax 16
Car Insurance 34
Car maintenance (including MOT) 5
Car Parking 11
Other travel 20
Other child related expenses 22
Buildings & Contents Insurance 34
Life Assurance 12
Other Insurance 16.5
Presents (birthday, christmas etc.) 70
Charity 200
Pension 16
Bank charge 13
Total monthly expenses 1711.49

Secured & HP Debt Description
Mortgage 170000 (382)
Secured Debt 5200 (160)
Secured & HP Debt totals 175200

Unsecured Debt Description
Guitar 350 50
Student Loan 8000 170
Parents 16500 100
Unsecured Debt totals 24850 320

Asset Description
Cash 1000
House Value (Gross) 260000
Car(s) 6000
Total Assets 267000

robberbutton

We didn't have a car for a long time, which saved a lot of money. But when I got pregnant it started to get harder to get public transport with three young children and morning sickness/tiredness, so we cut back loads then in order to better be able to afford payments and petrol etc. Unfortunately we didn't realise about No Claims Bonuses expiring after 2 years, so we had to go through a broker so as not to lose 9 years no claims, so insurance was a hefty £1100 instead of the £400 we were expecting! When we renew it should be better though. We were also able to get a loan through DH's work so the interest is v low (~3%).

Ways we cut back (with the help of MSE):

• Cancelled the cleaner (2 hours every fortnight was not making much of a dent anyway!) saving £32 a month.
• Cancelled Glossybox subscription (I miss that) saving £13 a month.
• Cancelled tv and cable (now watch DVDs and Netflix) saving £40 a month.
• Cancelled Which? Subscription saving £8 a month.
• Switched Internet plan saving £5 a month.
• Reduced gas and electric monthly DD (thought we were paying too much but will keep an eye on it) saving £30 a month.
• Cancelled veg box saving £54 a month.

So, £180ish of savings made to put against the £280ish that it is now costing us a month. Definitely worth it for being able to have a car though

robberbutton

Have found something else to cancel - my "graze box" subscription. Signed up in an effort to eat more healthily, and I did enjoy it, but it's a bit of a luxury. So that's another £16.50 a month saved :money:

robberbutton

Pay day today, so first month with new budget. Used the excel planner on this site, already have £16 put aside from a rebate and banking some pennies. Am also using the Pocket Money iPad app to track spending and accounts. I'm very good at starting things like this but not at keeping them up... Only spend today for me and DH was £5 to replace a broken can opener. Dinner was a bit late!

robberbutton

Am joining some of the challenges on this site. Have already signed up to the "no more buying books until you've read all the ones you have" one, which is a brilliant idea - amazon sees a great deal of my cash (~£50 a month on books the last few months!).

I've also just joined the Virtual Sealed Pot challenge which should suit me well as I do Internet banking. I had a look at the actual Sealed Pot Challenge but I don't really use a lot of cash, I count up and bank my pennies every few months, and already have money in the budget set aside for Christmas etc, so will leave that one for now.

I want to join in with the Grocery challenge but will take this month to tot up exactly what we spend so I know what it's realistic to aim for. Our weekly spend is quite low I think (~£75 for the 5 of us) but we top up a LOT.

elsien

Hi,
I have no useful advice to offer, but just popped in to say well done for the start you've made. Grocery challenges and that are completely beyond me.
And I do like the title of your diary.

grey_lady

I don't think your budget is realistic.

Re post your soa - and round it down to the last penny,
then add in things like haircuts/clothes car repairs/unexpected household bills.

Took me a long long time to get how to budget.

robberbutton

Thanks elsian

It feels really good to impose some sort of order on all of this. Love MSE and these forums :T

robberbutton

Thanks for posting grey lady. We honestly spend very very little in terms of hair (have a shaver for the boys, I trim the girls and sometimes my own ) and clothes (nearly all hand-me-downs) etc. But I'm writing every last thing down this month, so will be able to have a more accurate picture of all our expenditure and will update then.