Why can't I stop? SOA

hereigoagain22

Hi ladies and gents

I'm here again - I was a member for a couple of years but never stick to paying my debts off. I seem to go through the same cycle of running up debt I can't afford, somehow managing to pay some of it off and then relaxing and starting to run up debt again. This month my rent and electricity were in arrears and I couldn't stop worrying about them so took out a Wonga loan to take the worry away and felt great and now just a few days later I'm worrying about repaying the Wonga loan.

Recently things are getting worse - my rent/electricity have been bouncing because we're living beyond our means and I have been taking out various payday loans. This month I borrowed £500 from Wonga, £300 from Lending Stream, £100 from the NEXT account! I am only on statutory maternity pay, my partner lost his job in August with no redundancy pay (he has a job starting end Jan/beg Feb!!) so our income dropped further.

My partner also has a similar amount of debt but I have only included mine for now as they have all given up chasing him anyway! I will re-do an SOA when he starts work in February and include his debts too.

I have had to phone tax credits and benefits and need to visit work on Monday too to change my account details as have set up a new account with a different bank so I can break the overdraft/charges/paydayloans etc. cycle. My plan is to only add a DD to the new account for the bare essentials - rent, council tax, electricity etc., set up a weekly shop for a fixed budget (and reduce where I can each week with vouchers, deals etc.)

Here is my SOA -
Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 540
Partners monthly income after tax....... 0
Benefits................................ 948
Other income............................ 0
Total monthly income.................... 1488

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 305
Management charge (leasehold property).. 0
Council tax............................. 180 higher instalments as missed a few instalments this month
Electricity............................. 176 includes arrears from underpaying estimated bills, last 2 month's DDs have bounced so god knows how much it is now
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 15 part of SKY package
Mobile phone............................ 50 £25 a month each, contracted
TV Licence.............................. 13 paid quarterly
Satellite/Cable TV...................... 25 Sky package
Internet Services....................... 10 sky package
Groceries etc. ......................... 350 think this is realistic - i online shop and have 2 under 2 to buy for - nappies & wipes for both, formula for youngest now he is not breastfed
Clothing................................ 30 don't budget for this but should as I'm always panicking when kids begin to outgrow their clothes and myself and OH have used the Next account for the past year
Petrol/diesel........................... 90 £15 a week - have cut this as much as possible. We live far from town and visit family once/twice a week as well as a toddler group and short trips to shop etc.
Road tax................................ 15 Never budget for this and usually borrow on the month it's due - due Feb
Car Insurance........................... 49
Car maintenance (including MOT)......... 15 never budget for this either - last MOT failed on 4 things and repair came out of my overdraft I think. due again feb
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 45 £10 a week for toddler group, snack at shop, magazine for 2 year old (yes i know!!), we try to do free or cheap activities - like salt dough, painting
Medical (prescriptions, dentist etc).... 15 contact lenses, would happily wear nice new glasses as mine are broken and harry potter style too
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 17 expensive as I have to make 2 claims for laptop
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 have never budgeted for this - just realised I paid this years by borrow from Greenwoods which I have forgotten off SOA, will need to come up with a realistic budget for it
Haircuts................................ 10
Entertainment........................... 45 gym & football for OH at £5 a week and usually extra petrol for me for socialising after kids have gone to bed. Reluctant to stop this as both me and OH suffer depression and forcing ourselfs to go out helps tremedously
Holiday................................. 0 gutted we can't afford a holiday
Emergency fund.......................... 15 never budget this, all our white goods and furniture are second hand and insured, our landlord pays repairs
Smoking................................. 212 this is the biggest one and HAS to stop
Total monthly expenses.................. 1682


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Bank of Scotland Loan..........400.......100.......0
Bank of Scotland O/D...........150.......31........0
Lending Stream.................400.......0.........0
British Gas....................0.........0.........0
Barclaycard....................70........5.........0
Next...........................700.......50........0
Wonga..........................750.......0.........0
Total unsecured debts..........2470......186.......-


Monthly Budget Summary
Total monthly income.................... 1,488
Expenses (including HP & secured debts). 1,682
Available for debt repayments........... -194
Monthly UNsecured debt repayments....... 186
Amount short for making debt repayments. -380

Personal Balance Sheet Summary
Total assets (things you own)........... 500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -2,470
Net Assets.............................. -1,970

Created using the SOA calculator at stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.


It's pretty obvious we're living beyond our means but we don't have anything to show for it. Not a single thing.

It's also obvious where I need to start on the SOA (have written these in).

It's obvious that we do have enough money to break free of debt in a year or two if we really put our mind to it. The worry of debt over our heads everyday is awful and I would love to be rid of it. But why don't we? Why is it every few months I end up in the exact same place and another £500 of debt!!

Where do I start?

EDIT-

worried48

The obivous thing to me is that you need to give up smoking. However since I have never smoked and have never been tempted to, I am not really in a position to understand how difficult it is to do that, only to understand that it is difficult. Is there a way of reducing your expenditure on smoking such as rolling your own? Other than that I guess it's groceries. Even if your spending on smoking was zero and you could reduce your grocery spend, though, your situation would still be pretty grim.

However I do have a couple of questions - £30 a month on clothes, is this really necessary? If you're not working you don't need new clothes. £90 on petrol? For what? Not getting to and from work, so what does it go on?

rising_from_the_ashes

I've been in the debt / pay off / debt / pay off / debt ... cycle myself, it's horrid!

Few thoughts from me - sorry if they seem harsh but you need to get the books to balance!

hereigoagain22 wrote: »

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 540
Partners monthly income after tax....... 0 Do you know how much this will be?
Benefits................................ 948 What will this be when OH starts work?
Other income............................ 0
Total monthly income.................... 1488

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 305
Management charge (leasehold property).. 0
Council tax............................. 180
Electricity............................. 176 This is HUGE - even with no gas. Ensure everything's turned off when not in use - check readings against bills / comparison sites etc. Are the arrears cleared now?
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 15
Mobile phone............................ 50 You can't afford this (sorry) - phone them & ask to reduce tariff
TV Licence.............................. 13
Satellite/Cable TV...................... 25 Needs to go - switch to FreeSat
Internet Services....................... 10
Groceries etc. ......................... 350 Need to get this down to £200 - try the Grocery Challenge on the Old Style board
Clothing................................ 30 Sell stuff to fund replacements
Petrol/diesel........................... 90
Road tax................................ 15
Car Insurance........................... 49
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 45 What's this?
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 17 Seems high? Check comparison sites
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 Need something in here - £10
Haircuts................................ 10
Entertainment........................... 45 Cut to £25
Holiday................................. 0
Emergency fund.......................... 15
Smoking................................. 212 Errrrr - should I say it or not ....
Total monthly expenses.................. 1682


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Bank of Scotland Loan..........400.......100.......0
Bank of Scotland O/D...........150.......31........0
Lending Stream.................400.......0.........0
British Gas....................0.........0.........0
Barclaycard....................70........5.........0
Next...........................700.......50........0
Wonga..........................750.......0.........0
Total unsecured debts..........2470......186.......-


Monthly Budget Summary
Total monthly income.................... 1,488
Expenses (including HP & secured debts). 1,682
Available for debt repayments........... -194
Monthly UNsecured debt repayments....... 186
Amount short for making debt repayments. -380

Personal Balance Sheet Summary
Total assets (things you own)........... 500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -2,470
Net Assets.............................. -1,970

Created using the SOA calculator at stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

Well done for posting it up ..... the obvious areas are:

- cigs (believe me I know how hard it is to stop (day 71 ) + £200
- groceries + £150
- sky + 25
- entertainment + £25

That covers your shortfall ... if you can make other cuts / once your OH starts work, that should then let you start clearing the debts down .... good luck

hereigoagain22

OHs salary will be £1200 basic but he will do as much overtime as he can, benefits will reduce to around £400, maybe less. I go back to work in Mar when income will go slightly up but petrol and childcare will likely take most of my salary.

My electricity is HUGE. It includes a big underpayment from last winter when I stupidly didn't give them actual readings. I did do comparison sites last year and this seemed the best. Haven't taken meter readings in at least 3 months so no idea how we are doing this winter, I think I may be contracted in to my electricity company for another year as it was a fixed/capped deal? Just had a brand new boiler which should make a difference. My fridge freezer is knackered and clicks on and off 24hours a day and freezes everything in the fridge as it's so cold, I expect it's using far too much electricity but I never seem to be able to afford a new one!

Our phone bills were a ridiculous £40 a month, we have already reduced these to £25 (actually OH's hasn't been paid for 3 months so he is incoming calls only but will need a phone when he goes to work to keep in touch with me as will be away in Aberdeen Mon - Fri a lot of the time.

Sky we only signed up to recently on one of my "relaxed" phases, it's contracted for a year or 18months so won't I have to pay it anyway even if we cancel it :-(

Groceries I actually thought I was doing really well :eek: This is a weekly food shop for 2 adults and a toddler (eats the same as us) and baby, I make my own baby food instead of buying it but we do have to buy nappies and wipes for 2 and formula milk for 1. This includes all toiletries - deodorants, toothpaste, mouthwash, shower gel as well as all laundy and cleaning items. I try to cook from scratch but KNOW I could do much better.

Clothing I struggle with. DD is 2 and DS 5 months, It's a deep rooted obsession of mine - I was dressed poorly in hand downs etc. as a child and bullied aggressively for it until I left school! I have far too many clothes for the children but can't stop myself. This year I bought myself a new winter coat (£30) and boots (£20) and OH has had nothing, he's had to buy a new pair of trainers on the NEXT account (and branded of course!) because the soles have split on his old ones! I don't feel that we spend too much on ourselfs but far too much on the children. If someone handed me £360 (my budget for a year) and told me to go out and buy the essentials needed for the next year for all of us I could do it on much less we just need to stop and plan. I have already sold everything I can on eBay, I have a few blackbags of basic things that wouldn't sell I can take to cash for clothes for a few pound which would start an emergency jar?

Petrol is because we live 30 miles from my family and 20miles from OH's family in the other direction. We visit each once a week. My family don't make the effort to visit here (I've had my flat 2 years and my sister has seen it once) but I don't want to miss out on seeing my nephews and want the kids to grow up around their cousins too. We could move closer to my family (OH would be happy with this and his family make equal effort to visit us) but our rent would increase by at least £150 a month in that area so probably worth just paying the petrol!!

Other child related expenses - I budgeted £10 a week for a toddlers group (our highlight of the week!), a snack for my DD once a week as a treat from the shop (usually a drink and a fruit pack) and sometimes soft play etc. I hate to keep the children stuck indoors during the winter and there are no free places to go around us. I make an effort with people but barely have any local friends to visit, mother and toddlers groups cost money, we do free things like salt dough, playdough, painting, drawing, obstacle courses etc. too

Home insurance is very high as I claimed twice last year. Not sure if there would be charges for cancelling making it non-worthwhile, how would I find out?

Entertainment was £10 a week budget for OH's gym or football at around £2 a time plus he'll buy me a treat and magazine before he goes. Plus I sometimes have to stick another £5 in the car if I want to pop through to town and visit friends while the kiddies are sleeping. We could aim for £7.50 a week as a starting place for a month? I'm reluctant to stop as we have been househermits suffering depression and anxiety for the past 6 months and have only recently begun to find ourselfs a life and confidence again.

And smoking is ridiculous I know. We spent 2/3s of our RENT a month on smoking!! We spend more on smoking than we do in clothing for our children.

Presents I MUST budget for as this year I took out a £300 Greenwoods loan for Christmas shopping which has now become £480 with interest added on.

vasseur

Kiddies clothing is ideal secondhand especially for babies and toddlers because the stuff doesn't get much wear before it is handed on. Try ebay or local charity shops but really young children don' t care that much what they are wearing. By the time they DO care they are at school so only need a few nice outfits for the weekend as they are in uniform the rest of the time.

Do you have an Aldi near you? I liked their nappies. About £2 a pack cheaper than Pamper$ or Huggie$ and just as good. Actually try doing your big food shop there, you can save £££.

Hope this helps a bit.

Newyorkdreams

Hi HereIgoagain! I'm a newbie too so can't offer too much advice (I'm still learning myself how to get out of debt) but I wanted to mention a few things. You say you have absolutely nothing to show for your debt but I think you have 2 beautiful children to show for it. Being on maternity leave and the costs of things for baby and toddler must have contributed to the situation and I know you wouldn't change this for the world! So something positive has happened, it's not all negative.

I know how expensive smoking is. I smoked for 20 years and my husband smoked for 30 and we both packed in smoking nearly 1 year ago (it will be one year on 8 Jan). I smoked from the age of 13. I completely and utterly understand how difficult it is to give up. This is my 10th serious attempt but I never want to go back now. We gave up for a range of reasons but financial was definitely in the top 3. I recommend the smoking cessation forum www.about.com as I would never have been able to quit without it (well that and a 12 week course of patches). I have the same user name on there if you want to have a look. My husband used the sky cig for 9 months - it's an electronic cigarette. So if you feel you can't give up nicotine completely, this is a very good alternative which is safe. It's about third of the costs of cigarettes. It's the best thing we have ever done....you can do it too!

The other thing I wanted to mention was depression. I also have suffered badly from this and I understand the link between debt and depression. Getting out of this situation with your debt will help your depression. I don't think your entertainment budget is overly excessive and if it helps you to remain healthy in mind whilst dealing with 2 kids under 2 then I say continue. However, you will need to cut back somewhere else in order to get your debt under control.

Whatever you decide, you have taken the first step to confront your situation and it's a brave step - well done. I did it last week and I have reaped the rewards.

We are all behind you, stay strong, stay close to this forum and set your quit date to stop smoking! I believe in you!

NYD x

bouncydog1

Re: fridge/ freezer - ours did exactly the same. I am too tight to buy another so did a bit of research on net. OH pulled it out from housing and we cleaned the back of it and all around the front where dust and dirt had accumulated - I was very ashamed! Used vacuum cleaner and small paintbrush to get to the parts VC did 't reach. Result? Now works perfectly and it is quite old.

Re: Electric - set up a spreadsheet and do a weekly meter reading so you can see exactly how much you are using. Once you can see each week it's quite amazing how you cut back. I've even been known to dry clothes on towels on the bathroom floor because it's heated!

clairey_em

Do you have any nearly new sales where you are? They are fantastic for picking up gorgeous baby/ toddler clothes that are in excellent condition at a snip. I have also joined a couple of local Facebook selling pages which quite often sells bundles of clothes for little ones.

I know what you mean about hand me downs, my sister used to get my cousins then they'd come to me, so I remember what it's like, but I as never bullied about it, so big hugs for that, I'm not surprised you feel the way you do.

Good luck, I'm also not good and easily fall in to the cycle of debt/ pay it off/ debt/ pay it off etc. The less money I have the more stuff I want! Grr.

Good luck xx

catwoman73

It looks like you'll be a bit better off when your OH starts work in the new year.

I'm sorry, but you either need to cut down the family visits or get them to come to you - you just can't afford the fuel for the weekly visits - have you told them this?

Don't cancel the contents insurance, but you could see if raising the excess reduces the price - if you had a fire, you would lose everything and need to replace clothes/beds/fridge/kitchen equipment etc.

Are there any parks/woods nearby that you can take the children to for a runaround as free entertainment? Get wrapped up and go for 'nature walks' - gets you out of the house and really brightens to mood/free exercise, which will make you feel better and doesn't cost anything.

Can you walk/cycle shorter journeys?

Finally, do you have a specsavers that you can use - my contacts cost £10/month incl aftercare and solutions and they've just written to say I can get one free pair of glasses per year from their cheapest range - some of which are absolutely fine.

pleasedelete

Can you go back to work and oh look after the children? Being on maternity leave is probably a luxury that you can't afford.

rising_from_the_ashes

hereigoagain22 wrote: »

My fridge freezer is knackered and clicks on and off 24hours a day and freezes everything in the fridge as it's so cold, I expect it's using far too much electricity but I never seem to be able to afford a new one!

Ohhhh I'd be careful with the f/f if it's freezing stuff in the fridge - you can get food poisoning from stuff being frozen/thawed - need to get the emergency savings sorted & look for a 2nd hand one ASAP

hereigoagain22 wrote: »

Groceries I actually thought I was doing really well :eek: This is a weekly food shop for 2 adults and a toddler (eats the same as us) and baby, I make my own baby food instead of buying it but we do have to buy nappies and wipes for 2 and formula milk for 1. This includes all toiletries - deodorants, toothpaste, mouthwash, shower gel as well as all laundy and cleaning items. I try to cook from scratch but KNOW I could do much better.

Come on ... join the January Grocery Challenge! http://forums.moneysavingexpert.com/forumdisplay.php?f=33

Families of 4 on there manage on £220 incl toiletries, cleaning stuff & nappies! (somehow - this is one of my weakness areas!:o)

hereigoagain22 wrote: »

Clothing I struggle with. DD is 2 and DS 5 months, It's a deep rooted obsession of mine - I was dressed poorly in hand downs etc. as a child and bullied aggressively for it until I left school!

Charity shops are much better now-a-days - there's also E*bay etc that didn't exist when we were small .... you don't need to buy "tat" but you can get new stuff for a fraction of the price of buying in the shops ..... use E*bay to sell outgrown stuff to buy new stuff

hereigoagain22 wrote: »

Petrol is because we live 30 miles from my family and 20miles from OH's family in the other direction. We visit each once a week. My family don't make the effort to visit here

I feel for you on this one but a) you can't afford to do this every week and b) if you keep doing it then they're not going to make the effort! (and use their hard earned cash) - cut trips to every fortnight just now to help balance the books

hereigoagain22 wrote: »

Home insurance is very high as I claimed twice last year. Not sure if there would be charges for cancelling making it non-worthwhile, how would I find out?

Please don't do this .... what if something else happens!

hereigoagain22 wrote: »

And smoking is ridiculous I know. We spent 2/3s of our RENT a month on smoking!!

Please go & see your GP about classes to help stop .... it's a lot of money!

hereigoagain22 wrote: »

Presents I MUST budget for as this year I took out a £300 Greenwoods loan for Christmas shopping which has now become £480 with interest added on.

Oh my! Really need to get this sorted - getting into debt for Christmas ..... nope, not what it should be about at all:( - and worse, it'll take you ages to pay if off .....

Best of luck - not long until OH starts work which should hopefully help a bit