Need it to be Q3 2008 now!

AWT

We're not in debt crisis yet, but our current SOA is best described as 'One more unexpected big bill or any drop in income and it's 'GAME OVER'. We've gone through three cycles of consolidating credit cards with personal loans at the best rates available - yet ran the credit cards up to limit again and again. Two current accounts at combined full overdraft of £2500 too, plus £900 in a current account we no longer use. MoT failures, tax discs and household appliance failures trigger financial problems as we have NO savings. Worse, we both smoke and fail to give up time and time again because of the stress:mad:

You can see how my salary of £2338 is absorbed, leaving £16.12. My wife earns £1020 per month to cover petrol, food, clothes etc - we have two school age children.
I can't see much scope for reducing interest rates, and in August/Oct 08 two of the personal loans end, so it's a matter of surviving until then by radically pruning food bills, taking one of our cars completely off the road, just learning to be truly frugal I guess.

Because of our debt load we were turned down for borrowing more on the house (£60,000 mortgage, house worth £150,000, 0.75% base rate tracker mortgage with Egg), but that was probably a blessing in disguise as I feel that we would have just frittered it away running up paid-off balances again.

We've both been silly about money and in denial for so long now, but my wife is finally in agreement that we have to change. This is the lightbulb moment for us.

I'm just looking for any strategies I have missed to stay afloat till late '08!


Here's our SOA:

findingmyownway

Hi, well done for posting.

Your SOA is a little hard to follow but i've had a look. There is room to cut your bills - £50 month on your TV package is a big start. You say your wife pays for food and petrol on a different salarly. It might be helpful to look at the 'bigger picture' here and include your family income and expenditure in one place to see where savings can be made. With an income over £1000/month, she must be buying more than food and clothes.

Have a look at southernscousers sticky on SOAs for more info.

Good luck.

AWT

Thanks for your reply. You're right in saying that a breakdown of where my wife's salary goes is needed more, as my salary is in effect just servicing direct debits ..
I'll work on another SOA ASAP.

angelavdavis

As previous poster has recommended, I would merge yours and OH's financial situation so you have the full picture - you should treat the funds as shared - even if they are in separate accounts as its easier to highlight areas wherfe you could save. As most of your costs are pretty much fixed, there is little to play with - food shopping, etc usually offers more room for maneouvre. In addition, if that is all your wife is paying for - £1090 is one heck of a grocery/petrol/clothes bill!;) I reckon you could shave £300 a month off this amount easily through careful budgeting.

Having said that, my comments would be:

1) Car insurance seems really really high - I don't know your age or NCB allowances, but it might be worth signing up to quidco and seeing if you can switch to a better deal.
2) You are paying £145 a month on gas/electricity! This seems really really high - I have a large house (7 bedrooms) and don't pay this much! I think you should really look at replacing lightbulbs for energy efficient ones, switch devices off standby and look at putting jumpers on a bit more often!
3) Have you tried moving your credit cards to 0% or lower life of balance deals? You don't mention what the interest rate for egg is? If you are worried about reapplying for cards - phone your existing lenders and pretend you are looking to switch the balance elsewhere and ask for a reduction in interest - its amazing how many lenders will happily reduce the interest rates with existing customers if you ask.
4) Do you know if any of your loans allow overpayments? It might be worth finding out.
5) do you have anything you can eBay to raise funds and start getting these credit cards/loans down?
6) Start a spending diary - update it every night with you/OH and watch what you are spending money on. You have no allowances for holidays, birthdays, christmas, etc so you need to start putting money aside into another account for events like this. You also don't have running costs for the cars - tax, mot, etc.
7) Take a visit to the Old style board and start meal planning, using storecupboard challenges, looking into using a slow cooker for meals (much cheaper on energy) and keep track of what you are throwing away every week - so you know to avoid buying it in future - a lot of us used to buy out of habit rather than need.

As you have already eluded, you are living beyond your means really and it is catching up with you - it won't need that much doing without to get yourself in a better financial shape.

Shineyhappy

Hiya,

Have you seen Southernscoussers sticky for new posters? His layout for a SOA is a little easier to follow and you havent included a lot of info on say how much is spent on food/pocket money/entertainment/transport/clothes.

I think your phone/tv/internet package could probably be reduced and it might be worth giving up Sky and getting a freeview box until things are a bit easier.

Have you seen the OS board? This is great for tips on saving money on household stuff such as cooking and cleaning.

There are also cashback sites such as Pigsback and Quidco which you should look into.

I would also think about raising some extra cash through Ebaying/selling books on Amazon and bootfairs.

Make sure you keep an eye on the freebies board as those and Pigsback vouchers make life a little easier.

If your mortgage is repayment could you swop to interest only to help pay off the other debts quicker?

Hope some of what I said helps!

Storm

Have a look at Martin's budget planner too - for things like MOT/car tax/insurance you need to put some money aside each month to cover this, and if at MOT time it's less than you'd budgetted for then you can throw the extra at a debt, and if it's more than budgetted for you can hopefully 'borrow' some money from the insurance savings for example.

The Virgin package can definitely be reduced - and it might be worth doing a comparison with Sky to see if that works out cheaper - or get a freeview box!

When switching around utilities etc make sure you check on the cashback sites too to see if you can get anything back that way.

moanymoany

Hi Storm,

Untill you get the second SOA up and running, have a look at the thread

Are we really in debt? YES WE ARE by tolip. There is lots of advice on there which is relevant to you.

Especially good is to get on to https://www.whatsthecost.com to use the snowball calculator. This gives you the mose effective moneysaving way to pay your debts.

Look at using cheap phone companies. We use 1899 - all info on MSE.

Keep the spending diary. Very important in breaking the spending habit.

Smoking. In the book 'The Millionaire Next Door', there is a story. If a couple who smoked between them 3 packs a day of cigarettes had spent that money investing in the tobacco company, left all dividends etc in the company, at the end of 23 years they would have been worth $2million plus.