New year personal finance review

dano17439

Hi guys

Thought now would be a good enough time to review the household finances. Myself and my wife generally do OK but we always find ourselves skint a week or so before payday every month and have not really got any cash savings as such.

Please see below our SOA - i realise that the net asset figure is quite healthy compared to some who post on here and ive not posted to belittle anyone, but ive generally posted to see if anyone thinks where we can cut back on expenditure or i can maybe get a better deal for different services.



Some general points for the below

• We both work full time in London - hence high travelling and parking costs
• The "other assets" figure are pension values so can't touch this
• I found it really hard to enter the entertainment and grocery figures. We dont keep a spending diary so its just an educated guess
• We overpay on the personal loan to try to pay off the debt as quickly as possible
• Credit card is 0% as we always clear the bill every month

Many thanks

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................ 2657
Partners monthly income after tax....... 2972
Benefits................................ 81
Other income............................ 0
Total monthly income.................... 5710

Monthly Expense Details
Mortgage................................ 762
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 154
Electricity............................. 40
Gas..................................... 34
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 14
Mobile phone............................ 30
TV Licence.............................. 12
Satellite/Cable TV...................... 47
Internet Services....................... 20
Groceries etc. ......................... 500
Clothing................................ 50
Petrol/diesel........................... 250
Road tax................................ 42
Car Insurance........................... 100
Car maintenance (including MOT)......... 41
Car parking............................. 150
Other travel............................ 282
Childcare/nursery....................... 240
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 5
Buildings insurance..................... 5
Contents insurance...................... 5
Life assurance ......................... 25
Other insurance......................... 165
Presents (birthday, christmas etc)...... 100
Haircuts................................ 10
Entertainment........................... 500
Holiday................................. 200
Emergency fund.......................... 200
Boiler cover............................ 21
Gym membership.......................... 46
Pension payments........................ 531
Garage.................................. 42
Total monthly expenses.................. 4663

Assets
Cash.................................... 1525
House value (Gross)..................... 235000
Shares and bonds........................ 0
Car(s).................................. 19500
Other assets............................ 78082
Total Assets............................ 334107

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 140659...(762)......1.39
Total secured & HP debts...... 140659....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................622.......20........0
Personal loan..................6188......689.......6.2
Total unsecured debts..........6810......709.......-

Monthly Budget Summary
Total monthly income.................... 5,710
Expenses (including HP & secured debts). 4,663
Available for debt repayments........... 1,047
Monthly UNsecured debt repayments....... 709
Amount left after debt repayments....... 338

Personal Balance Sheet Summary
Total assets (things you own)........... 334,107
Total HP & Secured debt................. -140,659
Total Unsecured debt.................... -6,810
Net Assets.............................. 186,638
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

rising_from_the_ashes

I guess it depends on whether you want to have 6 months or so cutting right back on everything & clearing the debts or keep plodding along paying them off at a slower rate over a much longer period?

Some of the things on your SOA are really high but you have a good income & can afford to support this and make payments to your debts so it depends on the above

I've pointed out a few things that could get seriously cut for a while to clear the debts:

dano17439 wrote: »

Satellite/Cable TV...................... 47 not essential - FreeSat / FreeView
Groceries etc. ......................... 500 This is huge! You could manage on £200 (or less!)
Clothing................................ 50 Use what you've got for a while
Medical (prescriptions, dentist etc).... 0 Need to add this
Buildings insurance..................... 5 Seriously ... £10 for B&C in London?
Contents insurance...................... 5 As above
Other insurance......................... 165 What's this?
Presents (birthday, christmas etc)...... 100 Cut in 1/2
Entertainment........................... 500 Cut to £100
Holiday................................. 200 Cut to £100
Gym membership.......................... 46 Do you use this?

Total unsecured debts..........6810......709.......-

Amount left after debt repayments....... 338

There's nearly £1000 of savings mentioned above!

6 months (probably less) "tough love" and it could all be gone .....

dano17439

Many thanks for your suggestions. In answer to your points

Cable TV - just secured a new deal with Virgin for TV/Phone/broadband at £81 per month so locked into that. Beats the deal we were getting with Sky hands down

Groceries - we spent £130 this week alone so £200 for the month i think would be impossible for us. Do look out for 2-4-1 though and special offers

Medical - Amount would be negliable - were both pretty healthy touch wood

Contents/Building insurance - shopped around and combined policy was £120 this year - result! (we dont live in london)

Other insurances are joint critical illness cover, joint income protection and joint family protection cover. I consider this important and the policies were reviewed last year to ensure a good deal

Holiday - we dont go anywhere extravigent - last year was a week in Fuertuventura in the summer and 5 days in Great Yarmouth. I would never borrow money to go on holiday though so if we couldnt afford it we wouldnt go

Gym - yes i go twice a week for £25pm and my wife goes 3 times a week Jazzercise (£21 per month)

rising_from_the_ashes

So .... based on the above - it looks like you're going for the longer plod it out option!

[Deleted User]

£47 for Satellite/Cable TV is £564 pa. You could save this by going to Freeview/Freesat instead.

£500 for groceries, for 3 people, is very high. You should be able to cut this A LOT.

Likewise entertainment is very high. You are spending £6,000 pa on it.

Both holidays and emergency fund seem high.

Do you really need a car, let alone 2 cars?

The costs of running 2 cars, plus the "Other travel", means you are spending £865 pm (£10,380 pa) on travel.

Would it cost anywhere near that, to use alternative means for all travel?

If you halved that £10,380, halved food costs, entertainment, holidays and emergency fund, and ditched Satellite/Cable TV, you could pay £2,221 pm toward your loan and CC, and still have the £338 pm left.

At that rate, you could have both loan and CC paid off in about 4 months.

Even without cutting the transport costs, and just doing the food costs, entertainment, holidays and emergency fund, and ditching Satellite/Cable TV, you could have them paid off in about 6 months.

By August, at the latest, you could be debt free (bar your mortgage), and have over £1,000 pm (£12,000 pa) spare, with which to pay for Christmas, holidays etc.

[Deleted User]

If it were me i'd make these changes...

dano17439 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................ 2657
Partners monthly income after tax....... 2972
Benefits................................ 81
Other income............................ 0
Total monthly income.................... 5710

Monthly Expense Details
Mortgage................................ 762
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 154
Electricity............................. 40
Gas..................................... 34
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 14
Mobile phone............................ 30
TV Licence.............................. 12
Satellite/Cable TV...................... 47 - Change to freeview
Internet Services....................... 20
Groceries etc. ......................... 500 - £250
Clothing................................ 50
Petrol/diesel........................... 250
Road tax................................ 42
Car Insurance........................... 100 - seems very high?
Car maintenance (including MOT)......... 41
Car parking............................. 150
Other travel............................ 282
Childcare/nursery....................... 240
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 5
Buildings insurance..................... 5
Contents insurance...................... 5
Life assurance ......................... 25
Other insurance......................... 165 - scrap as you have life insurance/use towards debt or top up emergency savings
Presents (birthday, christmas etc)...... 100 - cut significantly
Haircuts................................ 10
Entertainment........................... 500 - cut significantly
Holiday................................. 200 - cut until debt cleared
Emergency fund.......................... 200
Boiler cover............................ 21
Gym membership.......................... 46 - run/cycle instead
Pension payments........................ 531
Garage.................................. 42
Total monthly expenses.................. 4663

Assets
Cash.................................... 1525
House value (Gross)..................... 235000
Shares and bonds........................ 0
Car(s).................................. 19500
Other assets............................ 78082
Total Assets............................ 334107

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 140659...(762)......1.39
Total secured & HP debts...... 140659....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................622.......20........0
Personal loan..................6188......689.......6.2
Total unsecured debts..........6810......709.......-

Monthly Budget Summary
Total monthly income.................... 5,710
Expenses (including HP & secured debts). 4,663
Available for debt repayments........... 1,047
Monthly UNsecured debt repayments....... 709
Amount left after debt repayments....... 338

Personal Balance Sheet Summary
Total assets (things you own)........... 334,107
Total HP & Secured debt................. -140,659
Total Unsecured debt.................... -6,810
Net Assets.............................. 186,638

foxgloves

Your grocery spend is huge.....we found when we were cutting down to pay off debts that buying 2 for 1s & offers actually didn't save all that much in the scheme of things. The savings come from being prepared to cook more from scratch, using freezer/store cupboard effectively & meal planning. We plan meals for the week first, then write the household shopping list based on that & stick to it. It took a bit of getting used to, but has worked well for us as we are also eating much better. I'd have thought £300 would be perfectly doable, but of course the trade off is that you will need a bit mroe planning time. If freeing up £200 a month is attractive to you, though, it may be worth a look. We are both keen cooks & would describe ourselves as 'foodies' so we have not simply cut back the good stuff & replaced it with cheap carbs. It can be done if you want to do it, but I do concede that it does take a bit more time & planning.
Entertainment also high.....if this was my situation, I'd feel inclined to cut back hard for a temporary period to allow that money to be paid into debts, then re-assess it when doing new budget from debt-free position.
We;re all different in terms of which things we consider to be essentials/non-negotiable, but those would be the 2 things I'd look at.

[Deleted User]

foxgloves wrote: »

Your grocery spend is huge.....we found when we were cutting down to pay off debts that buying 2 for 1s & offers actually didn't save all that much in the scheme of things. The savings come from being prepared to cook more from scratch, using freezer/store cupboard effectively & meal planning. We plan meals for the week first, then write the household shopping list based on that & stick to it. It took a bit of getting used to, but has worked well for us as we are also eating much better. I'd have thought £300 would be perfectly doable, but of course the trade off is that you will need a bit mroe planning time. If freeing up £200 a month is attractive to you, though, it may be worth a look. We are both keen cooks & would describe ourselves as 'foodies' so we have not simply cut back the good stuff & replaced it with cheap carbs. It can be done if you want to do it, but I do concede that it does take a bit more time & planning.
Entertainment also high.....if this was my situation, I'd feel inclined to cut back hard for a temporary period to allow that money to be paid into debts, then re-assess it when doing new budget from debt-free position.
We;re all different in terms of which things we consider to be essentials/non-negotiable, but those would be the 2 things I'd look at.

Yup as above, have a meal plan and stick to it. Never buy any junk/fizzy pop/sweets and you will save shedloads...

dano17439

Wow thanks guys some great tips there

Will try to cut down on groceries - it varies week to week, as said on saturday we spent £130 but next weekend it'll probably be only £70. Always go midweek though and end up spending £20 on fresh stuff. We both do make our own lunches for work though as i cant stand London prices for a sandwich!

Car insurance is correct - £650 for me (group 20 car) and £600 for my wife as she only passed her test 2 years back. We need 2 cars as we both travel to and from work at different times

Travel is the cheapest way - we both drive a 15 mile round trip to take the tube even though there is a mainline station just 10 mins walk from our house. We save around £16 per day jointly doing this

3 people close to me last year had been diagnosed with various cancers. None of them had insurance. I work on the theory that you never know whats round the corner and that if i or my wife were to get seriously ill, then we would at least have mortgage paid/income still to live on. I agree that insurances are the worst thing to pay for, unless you need to use them, then they are the best thing to have

YORKSHIRELASS

Hi

So I am guessing you dont really keep any records of your incomings and outgoings? Do you actually have £338 a month left? I am guessing you both work hard for those salaries but you do you actually know exactly where that hard earned money goes?

For me the first thing to do would be to set up some spreadsheets recording income and outgoings on a daily basis and then maybe go on to set up some budgets. It only takes a few minutes out of your day. OK you maybe dont need a spending diary analysing every 50p newspaper you buy but it really helps to focus your mind.

We have some friends who are high earners and for example they buy the most expensive pasta in the supermarket - just because they can afford it. OK they might only save a few pence buying the cheaper stuff but I can guarantee it doesnt taste any different - and why not spend that extra money on something else? Its all about getting your priorities right, I know that if I had your income I would want to be sure I was getting the most out of that money.

[Deleted User]

YORKSHIRELASS wrote: »

Hi

So I am guessing you dont really keep any records of your incomings and outgoings? Do you actually have £338 a month left? I am guessing you both work hard for those salaries but you do you actually know exactly where that hard earned money goes?

For me the first thing to do would be to set up some spreadsheets recording income and outgoings on a daily basis and then maybe go on to set up some budgets. It only takes a few minutes out of your day. OK you maybe dont need a spending diary analysing every 50p newspaper you buy but it really helps to focus your mind.

Second the spending diary. That is what we do and because every penny is written down you get into the mindset of not spending anything unless it is a necessity.