Budget posted, edited, posted again. HELP

angelface

We are currently in about £22K of debt. Its costing us approximately 700 - 800 per month. Our only other option is a secured loan.

I know I can post that budget thingy but I am not sure how to do it?

Can anyone help, I'd really love some objective advice.

Lucy1982_2

Hi Angel

Have a look at the sticky thread called first time posters. That explains all about Statements of Affairs etc.

But good luck and welcome x

savvykaz

Hi angel,

You need to list all your outgoings, including any HP, loans, credit card debt etc. (with aprs, monthly repayments, length of time to repay) and then all incomings. Don't forget irregular spending ie: Christmas, car costs - MOT, service, holidays and then all the experts on here will come to your aid

angelface

OK here goes for my monthly spends. For xmas and birthdays I do not save up the amount I just hope that I have enough at the time. I have put a holiday down but obviously if we were in this state this would be the first thing to go out of the window.

Background info - we have recently got our first flat, on mortgage. We spent a fair bit on credit cards and store cards trying to kit it out. We are now in a bit of a spiral with regard to paying stuff back - we are paying so much back that we haven't got enough to live on. You will note that there are no 'fun expenses' such as going out on here because we have currently ceased to have a social life (although we do have broadband and sky so that is social to some extent). All of this debt is in my partners name as I have been bankrupt years ago and do not have credit now. We are affording all the payments but it will only take a disaster or a missed payment and I can see us being in trouble.

Per month Extra Information Total Debt (left)
Mortgage 835
Council tax 100
Electricity 40
Water 40
British Gas 30
Sky 50
BT 55
Mobiles 55
Pet Ins 32
Home Ins 25
TV License 11
Lloyds TSB Loan 92 12 months left 1,104.00
Food 200
Cahoot Loan £140.00 5 years left
Mint Credit Card 100 0 % interest until September maxed out
Sky Credit Card 100 19.9% interest maxed out
Dogwalker 240 Total monthly charge for 2 dogs
Petrol 50
Charities 50
Car HP 160
Next Store Card 60 29.90% 500.00
Argos 90 ?? % 750.00
Dog food 20
Council tax - old property 116 for next 3 months
Pet Ins 35
Electricity from old property 100 for two months
Computer 55 11 payments then £700 payment
sofa 33 4 years interest free
Birthdays/Xmas Holidays etc 139 also include haircuts!
Total 3053

Mine and partners wage (we get paid four weekly so we have one month where we have two paydays) 3088



difference 35

Storm

angelface wrote: »

Per month Extra Information Total Debt (left)
Mortgage 835
Council tax 100
Electricity 40
Water 40
British Gas 30
Sky 50 This is high - can you reduce the package? Minimum is £15 a month
BT 55 Does this include broadband? It's still high - look into Skype for cutting call costs, reduce package etcMobiles 55 This is high too - either reduce the packages you're on or go PAYG
Pet Ins 32 Can you get this cheaper? Go through Quidco for cashback
Home Ins 25 Ditto
TV License 11
Lloyds TSB Loan 92 12 months left 1,104.00
Food 200
Cahoot Loan £140.00 5 years left
Mint Credit Card 100 0 % interest until September maxed out
Sky Credit Card 100 19.9% interest maxed out
Dogwalker 240 Total monthly charge for 2 dogs This is a MASSIVE amount - can you not walk the dogs yourselves? Or at least see if you can get a teenager to do it instead?
Petrol 50
Charities 50 This can be stopped for now, you can always increase payments when you're debt free
Car HP 160
Next Store Card 60 29.90% 500.00
Argos 90 ?? % 750.00
Dog food 20 60 Not sure which figure is the monthly one!
Council tax - old property 116 for next 3 months
Pet Ins 35 You've mentioned this already
Electricity from old property 100 for two months
Computer 55 11 payments then £700 payment So do you need to save up £700?
sofa 33 4 years interest free
Total 2914
Birthdays/Xmas Holidays etc 139 also include haircuts!

Mine and partners wage (we get paid four weekly so we have one month where we have two paydays) 3088



difference 174

I've made a few comments on your SoA - you need to budget a monthly amount towards car tax, MOT, insurance etc as well so these bills don't come as too much of a shock.

The biggest savings each month are the dogwalking - can you really not do this yourselves?- and the charity payments - you can start these up again when you're in a better financial position.

angelface

Unfortunately with the dogwalking - we both work full time in London and have moved out to Essex and we have to pay somebody to come in and take them out at midday. Its not a cuttable cost. They are unable to cross their legs for the length of time we are out.

My partner has been saying we should stop paying the charities too. Feel awful though.

RAS

Hi

A few thoughts in addition to the above.

Why are you paying council tax on the old property? Either it is empty, so you should get it rebated, or it is occupied so the new occupier pays. talk to the Council NOW. That would make a big hole in the Next card.

What is the APR on the Mint card after August and how much is on it?

Can you breakdown Birthday/holidays etc?

angelface

Because we owed it - we were supposed to move on a certain date but it fell through, I had already cancelled my direct debit but by the time we had faffed around and set it up again I was two months behind and moving - I already had a payment plan for about £150 per month so making sure thats paid off now. Won't be forever, but makes it a bit tight for next two months. Same for the Electric.

Breakdown of holiday birthdays etc

Cost of Christmas One off- £400.00
Cost of Winter Holiday £850.00
Cost of Summer Holiday
Cost of Birthdays £250.00

This doesn't include us buying presents for each other, just brothers and sisters, we are not getting each other anything obviously!

angelface

Storm wrote: »

I've made a few comments on your SoA - you need to budget a monthly amount towards car tax, MOT, insurance etc as well so these bills don't come as too much of a shock.

The biggest savings each month are the dogwalking - can you really not do this yourselves?- and the charity payments - you can start these up again when you're in a better financial position.

So sorry, i didn't see your remarks in red!

Re the dogwalker, one of my dogs isn't friendly or trustworthy and needs a proper dogwalker who knows what he/she is doing.

With regard to the computer, the extra payday I get (I usually get an extra £900) will pay off the computer. The BT package does include broadband, i got the homehub one that gets you free calls. I know it is fairly high, but a large chunk appears to be the line rental! Mobiles - MY mobile is £10 per month, with 300 free texts thrown in, PAYG - its HIMSELF who has the larger bill. He is from Scotland and uses the free minutes in his package to speak to his family.

I am looking at Pet Insurance and may well change this. Same for Home ins.

angelavdavis

Hi Angel and welcome to DFWs and well done for posting your SOA.

You have a good household income and £22k debt isn't impossible to combat.

To be honest, there are many on here (me included) who would never recommend consolidation - most of us have got the financial scars to prove it!

I have reconsolidated twice via my mortgage and (much as I promised myself I wouldn't) I ran up the credit cards again because my salary went up, I switched to 0% on a regular basis, etc and I thought I could afford it. Suddenly I realised I couldn't afford to continue and luckily, I had my lbm before my credit file was affected and knew I had to do something.

I have now switched to cutting back and should be cc debt free the end of this month and mortgage and loan free hopefully in three years - my remortgage-free date after consolidation had I stuck to it would have been 2021! I would also have paid over £60k in interest alone over that period!!:eek:

My few queries:

1) Has OH been paying the credit cards/loans on time? The reason I ask is that if his credit rating is pretty OK, you could try to open either a lower life of balance or 0% card and transfer the Next debt and the Argos debt onto these (I am guessing Argos isn't interest free?)

2) Can you check the loans and see if any allow early repayment (ie check if repayment charges will be made). Post back on here the results as this could open more options.

3) Do you have anything to eBay? I suspect you might have stuff you no longer need. Do you have any old mobiles? Check out MoPay or similar sites to see how much they will pay for them.

4) If there are only two of you, £40 per month water is very high - do you have a water meter? I pay less than £20 per month for a 7 bedroomed house - previously I was paying £55! It might be worth logging onto your local water company site and finding out if it will be worth your while.

5) What do you spend the £174 on every month? I suggest you and OH start spending diaries and update nightly for a couple of months to look at expenditure. Its a real eye-opener. The extra £174 added to the £90 you pay at the moment, will pay off Argos in 3 months! This will leave you with 264 per month to throw at the Sky or Mint credit cards.

6) You aren't too bad on food, but you could probably save £25 on this if you become smarter at shopping. Check out Old style board for menu planning, storecupboard challenges, etc.

7) Stop the charities short term - yes you will feel guilty but paying an additional £50 off Argos will clear it quickly.

8) Do you make your own lunches - this is a hidden cost people forget about.

Not being rude, but you will need to re-educate yourselves not to buy on credit. We have all done it at some time or another and its tempting when you have a new place, but you have already experienced the negative side of debt and its simply not worth it in the long term. By consolidating you will effectively still be paying for the computer and sofa long after their lifetime.

Currently you have a car, computer, sofa - all on credit. In future, try to either sell items to raise funds or save up. I suspect you have all the stuff you need for your new flat now, so promise yourselves not to spend any more unless you raise funds first.

£22,000 borrowed over 25 years at an interest rate of 6.75%, would cost you £152 per month but total £45600.16!!! Plus, you would be paying it back for what will seem like forever! I think you could easily pay off the money in 5 years with some serious cutbacks. This will leave you with your income and the freedom from debt.

Storm has pointed out stuff that's missing from the SOA and you will need to post up the total balances for the various credit cards (as well as finding out missing APRs) this will help you prioritise which debts to repay first.

Good luck, sorry my post is so long. I hope its helpful. We are all here to help - not judge - well done for realising your situation before it was too late. Please don't be hasty and consolidate - its really a final option.

angelface

Hi thanks for replying! I think we both realise that we have been living beyond our means - which is ridiculous really as, as you have pointed out, we do not earn a bad wage. If we didn't have all our debt we would be laughing - its the amount we are paying per month to all of these separate things that is making it a bit difficult now. When we were looking at consolidation we wanted to do it over 8 years but you are right, would have been a fair amount and felt like forever. However, if we carry on as we are, only paying the stuff we can onto these cards/loans it will also take forever and is also a large amount per month. I'm just not sure that we are currently being very smart with our money.

We have been a couple of days late on occasion but generally we pay our stuff on time. My partner has recently switched jobs, to a lower wage (but better prospects) so we had to adjust to this.

With regard to the £174 per month, i had to adjust the figure as we hadn't taken into account birthdays or xmas or anything really.

I know we can't carry on as we are but I need a workable solution - its partly ignorance making me think of consolidation and partly desperation. I know those ads that say 'one monthly payment' etc are a con but they know how to sell it, we seem to owe funny amounts to everyone and I can't keep up!