Almost at breaking point!!

exarmydreamer

I believe, that since the income from a lodger or student is tax free it will not have any effect on your benefits. There is a requirement to inform your mortgage provider and insurance companies, although they should not put up your bills because of it.

My neighbour struggled for ages, but then I mentioned about students or a lodger and she's had them ever since. She has no problems and she normally has a couple (foreign students) as her children share a room. With foreign students, they only stay for a few weeks or a month or so at a time, so, you could have them when it suits you. You don't have to pick the first person through the door, your house, you pick who you want to live there and set the house rules etc i.e smoking only outside.

Lea74

So here goes, not exactly an SOA but this is the budget that I use and what was given to me by the CAB. These are all per month and some notes below:

Income: 920 (after taxes)
Benefits: 720
Total: 1700

Mortgage: 894 (this is interest only)
Council taxes: 110
Gas: 70.00
Electricity: 50.00
Water (in and out) 70.00

Bank charges: 48.00(approx have an overdraft of 3500)
Prop mgnt 19.60
Sky 38 (this is going to go)
Tele & internet 40
Tv License 12.47
Mobile 42.00 (for mine and sons)

Car ins 22.94
Pet ins 12.67
Home Ins 9.67
Greenflag 2.47
Home emergency 20.10
Gas cover 27.50

CC1 7.62 (payment plan interest frozen)
CC2 7.62 (payment plan interest frozen)
Debt 1 40.00 (payment plan interest frozen)
Debt 2 17.42 (payment plan interest frozen)
CC3 25.00 (payment plan interst frozen)
Payday loan 20.00 (payment plan)
Payday loan 10.00 (payment plan)
Store card 10.00 (payment plan)

Solicitor 20.00 (payment plan, from D)
School 10.00 (payment plan)

Total expenses 1657

I havent included any food costs in the above, as you can we actually cant eat (trying a bit of humour).

I travel for my job and so my petrol costs are covered and generally I am able to put the school run in this so it doesnt cost me.

I also havent included any income from my self employment work as this is not guaranteed income or work. I have decided that whatever I do earn from self employment should go into a seperate account for a rainy day or rather a car breakdown, home maintenance all those things that crop up.

Utility bills probably seem high, however I have some arrears on these and so am paying these off first.

Electricity also has a massive bill and also is on a prepayment meter.

Look forward to your feedback and suggestions. :rotfl:

exarmydreamer

Hi:j

It would definately benefit you to take a lodger, maybe a female if your concerned, this would help with the mortgage. Speak to your debt plan people, see if you can have your debts reassessed as you are really struggling and come christmas or another high expense and you will really be struggling.

Are the mobiles PAYG, can you finish the contract, if on contract. Have you visited the old style board on feeding a family on pennies, lots of great advice on there. Is your council tax over 10 or 12 months, speak to council see if you can spread it over 12 months.

Speak to the water board about going on a meter, as £70.00 is high. You could more than half this on a meter. you can still claim PPI back, even if your accounts are on pay plans. Check all documentation, and see if you have been charged insurance that you didn't need.

Electric and gas also seem high, could you check the comparison sites to see if you are on the best deal. Turn thermostate down and get the family to wear extra layers. Tin foil is good behind the radiators and unplug all electrics when not in use i.e microwave/charges. Try to start earning on survey sites and apply for mystery shopping. Get rid of sky and when able to get a freeview box, don't be tempted to accept a cheaper deal from sky.

Do you need the pet insurance, the PDSA or other charity maybe able to help in certain cases. Ask yourself, what's the likelyhood of an accident or how old is your pet. Keep a spending diary, keep the little book with you and write everything down, its amazing what you spend a pound here and a pound there on. What's the property maintence for, are you contracted to something or could you do it yourself?. Are you with a company for your payplan or a free charity one who don't charge. Get your benefits reassessed, are you on the single person occupany rate of council tax?. Hope this helps.:)

Lea74

exarmydreamer wrote: »

Hi:j

It would definately benefit you to take a lodger, maybe a female if your concerned, this would help with the mortgage. Speak to your debt plan people, see if you can have your debts reassessed as you are really struggling and come christmas or another high expense and you will really be struggling.

Are the mobiles PAYG, can you finish the contract, if on contract. Have you visited the old style board on feeding a family on pennies, lots of great advice on there. Is your council tax over 10 or 12 months, speak to council see if you can spread it over 12 months.

Speak to the water board about going on a meter, as £70.00 is high. You could more than half this on a meter. you can still claim PPI back, even if your accounts are on pay plans. Check all documentation, and see if you have been charged insurance that you didn't need.

Electric and gas also seem high, could you check the comparison sites to see if you are on the best deal. Turn thermostate down and get the family to wear extra layers. Tin foil is good behind the radiators and unplug all electrics when not in use i.e microwave/charges. Try to start earning on survey sites and apply for mystery shopping. Get rid of sky and when able to get a freeview box, don't be tempted to accept a cheaper deal from sky.

Do you need the pet insurance, the PDSA or other charity maybe able to help in certain cases. Ask yourself, what's the likelyhood of an accident or how old is your pet. Keep a spending diary, keep the little book with you and write everything down, its amazing what you spend a pound here and a pound there on. What's the property maintence for, are you contracted to something or could you do it yourself?. Are you with a company for your payplan or a free charity one who don't charge. Get your benefits reassessed, are you on the single person occupany rate of council tax?. Hope this helps.:)

hi there, thanks for the above. I just did a quick calculation on the benefits checker and included an amount of £300.00 that I could potentially receive from a lodger a month - just a guestimate to see if it does affect benefits and it seems it does. It looks as though this would reduce my benefits by £50.00 per week. So with this decrease in benefites and cost of meals extra elect, water, extra council tax and also kitting out the room (it is currently my office) I am not sure that it would be beneficial. Of course I will check with them via the telephone tomorrow to see how it all works.

I may be wrong about these calculations but it is my best guess on a sunday morning.

:rotfl:

exarmydreamer

The lodger is a tax free amount and will not effect your benefits, might be helpful to discuss with benefit people. For example my war/army pension is tax free and is not included in my CTC calculations.

Only taxable income is included on benefit calculations.

LuckyLouise

Sorry, can't offer any more advice, just want to wish you loads of luck. I'm sure my fellow MSE posters will give you excellent advice, take care L.L xx

pmlindyloo

exarmydreamer wrote: »

The lodger is a tax free amount and will not effect your benefits, might be helpful to discuss with benefit people. For example my war/army pension is tax free and is not included in my CTC calculations.

Only taxable income is included on benefit calculations.

Just to confirm and give you a link.

Income from the Rent a Room scheme is not counted as income for tax credits.

See here:

http://www.hmrc.gov.uk/leaflets/wtc2.pdf (page 21)

eyeopener2

One thing that you may consider is moving bank accounts and treating the overdraft as another debt. The £48 your paying should be used to reduce the debt but it would seem your just treading water on that, its not helping.

If you were to move onto a Debt Management Plan (which your sort of on at the moment) this is what would happen. New account and whatever you have over is split between your creditors - including the OD.

Dump Sky, like you say, ASAP and thats another £38 you can use for getting this debt going south.

E2

Lea74

eyeopener2 wrote: »

One thing that you may consider is moving bank accounts and treating the overdraft as another debt. The £48 your paying should be used to reduce the debt but it would seem your just treading water on that, its not helping.

If you were to move onto a Debt Management Plan (which your sort of on at the moment) this is what would happen. New account and whatever you have over is split between your creditors - including the OD.

Dump Sky, like you say, ASAP and thats another £38 you can use for getting this debt going south.

E2

Actually that is a really good idea. I do have another bank account already with no overdraft. So with this in mind how would I turn the OD on the original bank account into debt?

I guess I could have my salary and direct debits moved to my new account?

Perhaps I need to give my bank a call. I never considered this and just keep on paying this.

Last question, my mortgage is with the company that I currently bank this, would this raise any concerns with them do you think?

firesidemaid

hiya.

i am not an expert, and don't know who you bank with, but £48 a month seems a lot for that size of overdraft. have you talked to your bank about this? that is approx 20%. it seems like this one may be your priority debt to try and snowball?

having a lodger could really help with this and your other debts and help get you on an even keel again.

what is the home emergency and gas cover? if you really think you need these have you shopped around - look for cashback deals on quidco etc?

Sky, Tele + Internet and Mobiles all seem high - that's about £120 per month! Even if you are in a contract, ring them saying you cannot afford it and ask them to reduce your costs/packages - others have done this successfully.

i think, whilst you are in debt with a high mortgage, you need to cut ALL unnecessary spending and consider a lodger. this will allow you to pay off your debts and build a savings buffer. you will also realise what you can live without.

i will post a link to another thread (which also has many links) re. eating VERY cheaply.

What kind of pet do you have btw? x