Cannot afford to go it alone! Here is my SOA SOS!

OCS_Fan

I'm 46, employed, living with partner with approaching £22,000 of debt (plus mortgage). My partner has £5000. We have been having relationship difficulties and I have considered going it alone but without his contribution, I have a £420 shortfall. With him, I just about keeping head above water. I have decided to move towards selling my property, using equity to pay off my debts and rent a home. Details of my debt:

Loan 1 £9818.61 Borrowed £14,999 over 86 months APR 8.1 48 months left

Loan 2 £7639.83 Borrowed £9000 over 50 months APR 5.9 30 months left

Lloyds Platinum £557 APR 0% pay £50 month
MBNA £1470 APR 0% pay £62 month

Lloyds TSB overdraft £3000 O/D usage £6, monthly interest £21

Assets

House value £165000 - £175000 mortgage outstanding £124000
1.49% Repayment £526.33 monthly.

Here is my SOA


Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 2,151.43
Income from Self Employment (before tax). . . . . . . . . . . . . . . . . . . . 0.00
State Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Pension / Annuity Payout. . . . . . . . . . . . . . . . . . . . . . . . 0.00
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 81.00
Income From Savings & Investments . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gifts From Family / Friends . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Contribution from partner . . . . . . . . . . . . . . . . . . . . . . . . . . . 500.00

Monthly Expense Details

In Your Home

Mobile phones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.00
TV licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.12
Internet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Home phone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cleaning products/Cleaner . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Garden maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Household maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.50
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.32
Council tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98.33
Overdraft cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.00
Bank account fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Home insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.89
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526.33
Plumbing/Boiler cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.67
Mortgage payment protection . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Food and household shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 400.00
Drinks for home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00

Motoring & Public Transport

Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.75
Car insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.33
Car maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.33
Rail/Buses/Taxis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Breakdown cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Debt Repayments

Credit card repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112.00
Hire purchase repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Personal loan repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 448.34
Car loan repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Savings & Investments

Pension payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Buying shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cash ISAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Lump sum saving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Regular saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.00

Family

Pet food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
School trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School meals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pocket money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.00
Nappies/Baby extras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Laundry/Dry cleaning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Children's travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Baby-sitting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Childcare/Playgroups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Travel insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Entertainment

Satellite/Digital TV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.00
Family days out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cinema/Theatre trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.00
Books/Music/Films/Computers . . . . . . . . . . . . . . . . . . . . . . . . . . 7.99
Big days out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Shopping for fun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.50
Hobbies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
IT/Computing (antivirus, etc) . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
DVD rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Drinking out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Eating out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.00

Clothes, Health & Beauty

Complimentary therapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Optical bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.25
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.75
Beauty treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Healthcare cash plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dental insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private medical insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Fitness/Sports/Gym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Work clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New children's clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
New clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00

Education & Courses

University tuition fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Your courses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Support children at University. . . . . . . . . . . . . . . . . . . . . . . . . 160.00
NUT union subs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.16

Big One-Offs

Funeral expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Wedding expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Sofa/Kitchen/TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Winter holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Summer holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83.33
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66.67

Odds & Sods

Newspapers and magazines. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.00
Tax & NI Provisions (self-employed only). . . . . . . . . . . . . . . . . . . . 0.00
Regular charity donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.00
Meals at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
Smokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Coffees/Sandwiches/Snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00


Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,732.43


Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,656.57

OCS_Fan

I have noticed electricity DD is missing which is £54.50 so I'm not doing as well as I thought!

I should add that my partner started a new job a month ago so we are not sure how much he will earn after tax. His previous job brought in £1400 but his new job is lower paid. He is working 30 hours pro-rata £17,800. We think he will pick up about £1000 -1100. He has some opportunity to do overtime and has already done 3 days so far. He is hoping to increase his hours to 40 - 45 a month. He cycles to work or we share my car on my days off.

We have a 9 year old so we do have child care costs but I buy Childcare vouchers which are deducted from my salary every month. I have a work pension. Again contributions are taken directly from my salary. My partner had started a private pension with his previous employer. He was saving just over £100 a month but has stopped payments at the moment. He has been paying off £200 a month on his CC debt but made minimum payment this month, about £65.

HappyMJ

Don't save anything when you have debts. That £45 a month can go towards paying the highest interest charging debt.

Do everything you can to avoid paying overdraft costs and bank fees £27 and £25 could be going towards paying off debts rather than just bank fees. You could extend your credit card by £1,000 and use the money to pay the overdraft and it will cost you much less than £52 a month.

Mr_Mink

If you want to work out the income from the new job easily, http://www.thesalarycalculator.co.uk/ is a great site to do this and has a pro-rata calculator.

Tixy

A few comments/suggestions

OCS_Fan wrote: »

Water . . . . . . . . . . . . . . 45.32 are you on a meter? have you looked to see if a meter would save you money?

Overdraft cost. . . .. . . . . . . . . 27.00
Bank account fee. . . . . . . . . . . . . . . 25.00 do you use the benefits this gives you? can you switch to a free account?

Food and household shopping . . . . . . . . . 400.00 is this 2 adults and a child? if so it seems high. I would work on trying to reduce to around £250, including drinks and pet food.
Drinks for home . . . . . . . . . . . . . . . . . . . 20.00

Credit card repayments. . . . .. . . . . . . . . . . . 112.00
Personal loan repayments. . . . .. . . . . . . . . . . 448.34


Regular saving. . . . . . . . . . . 45.00 better to use this towards debts which will be costing more in interest than you earn from your savings


Satellite/Digital TV. . . . . . . . . . . 60.00 look for cheaper or consider downgrading or ditching this altogether

Cinema/Theatre trips. . . . . . . . . . . . 18.00
Books/Music/Films/Computers . . . . . . . . . 7.99

Pet costs . . . . . . . . . . . . . . . . . 7.50

Eating out. . . . . . . . . . . . . . . . 51.00 can you cut back here until your finances are in a better position


Support children at University. . . . . . . . . . 160.00 how long will this continue?
NUT union subs. . . . . . . . . . . . . . . 21.16

Birthdays . . . . . . . . . . . . . . . . . . 25.00

Summer holiday. . . . . . . . .. . . . . 83.33 could you stop this until your debts are repaid
Christmas . . . . . . . . . .. . . . . . . . . . 66.67 can you reduce this?


Meals at work . . . . . . . .. . . . . . . . 30.00 can you take from home?
Coffees/Sandwiches/Snacks . . . .. . . . . . . 20.00

Does this include your partners debt repayments or just yours?
Is this all of the household bills? What else does he spend the remainder of his earnings on?

foxgloves

Hi there,
From a quick look, it does seem that there is room for freeing up some money. Everyone's perspective is slightly different. I can only talk about what I would do from experience of paying off around 30K of debts & now living debt-free. First, cancel the tv package. £60 a month is £720 a year that could much more usefully be spent on debt repayment. We switched to freeview & don't miss a single channel. £400 a month on groceries is high & it's really £420 if you include the 'drinks for home'. We spend £250 a month inc drinks, but you would expect to budget a bit higher than this if you still have a child at home. Try knocking it to £350 for a month or two, then see if you can do £300. Be prepared to cook more from scratch, shop around, use local markets for fruit & veg, etc, move down a brand or two, try Aldi/Lidl if you haven't already, batch cook to get extra meals in the freezer for another week, all the tips that you'll find over on the Old style forum. Plan your weekly meals & only put on your shopping list what you need to buy. Watch out for sneaky top-up shops......things like 'We've run out of crisps'......if sufficient crisps were bought for everyone who wants one to have a packet a day, then tough, crisps don't get bought again till next week's list. Could you go a couple of years without a holiday if it meant your debts would reduce more quickly? It's not an essential (tho admit it often feels like one!) but £83 a month is a sum that would be more appropriately used to pay down debt at the moment. It's a good idea to put money away for Christmas, but you're perhaps not really in a position to be spending £792 a year on this at the moment. There's no shame in reducing what you spend on people's presents. We've done this quite significantly & I don't think anyone would be able to notice. We put more time & thought into choosing instead. I've also started making lots of gifts as well. They seem to be well-received & I can be working on those all year. £30 a month for 'meals at work' also jumped out at me. Could you not take packed lunches? This can be a good saving. For the two of us, we reckoned we saved almost £2000 a year when we started taking our own food to work instead of popping into M&S food hall 5 days a week! As people with lots of debt have often had a lifestyle of buying lots of things, do you have things you no longer want that you could sell on ebay? For instance, my partner & I have lost lots of weight & we sold lots of our big clothes on ebay & made over £300. Last thing is if you haven't already, go & investigate some of the pound shops. I used to be a bit snobby about them, but now use them regularly for certain products....i.e the brand of toothpaste we like is 99p for a full size tube, so why would I pay over twice as much somewhere else? Ditto Aldi's perfectly good tinned tuna for 49p. The way you need to look at it, is that every £ saved or made is an extra £ off your debt total. It sounds obvious, but we found that every little bit really does add up. Nothing in this reply is intended as judgemental......we've been in a lot of debt ourselves in the past & I wouldn't offer advice had we not managed to turn this around through changing our bad habits. I bet you'll get lots of other people offering their thoughts too, & I wish you all the best with starting your new DFW life x

OCS_Fan

Mr_Mink wrote: »

If you want to work out the income from the new job easily, http://www.thesalarycalculator.co.uk/ is a great site to do this and has a pro-rata calculator.

Thanks for this - I will check it out.

OCS_Fan

Does this include your partners debt repayments or just yours?
Is this all of the household bills? What else does he spend the remainder of his earnings on?

Just mine Tixy. I have only included £500 he transfers into my account to help with joint house hold bills. Internet, home phone and cable tv are included under TV. He has a phone contract that is £36 a month but he often goes over I have noticed. He has recently started smoking again but is trying to quit. He pays for his lunches and entertainments, e.g. occasion trips to the cinema, a drink with a friend, trip to see family/ friends an hour drive away, the odd football match.

ruth2

Everything Tixy and Fox said is exactly what I would have suggested. I don't want this to come over as overly critical, but there does seem to be a lot of 'fat' in there that could be trimmed quite quickly.

I don't like to read and run, so just to add my 2 pennies:

If you hypothetically saved say £300 from random bits and pieces here and there (e.g. £45pm from savings, £40pm from downgrading tv, £40pm from downgrading holidays/xmas, £100pm from being more savvy about food shopping, etc...) and paid it directly off your overdraft, you could be overdraft free in 10 months easily.

Then that'd free up a further £6 spent in usage fees, £21 in interest, and potentially even £25 in account fees (assuming you could move to a free banking account?) - which is ~£50 a month that you didn't have before for very little effort.

It's always easier to focus on overpaying one debt at a time (usually the highest APR or most urgent/dangerous debt), and then when you've paid that off, move on to the next one. Speaking from experience, I've cut my debtors to just two now, and it feels like I have a way better handle on things. Just be sure you're not creating new debt with fees when you're consolidating.

Also (this is just a personal preference thing) one example is that you currently have 2 credit cards with 'smallish' amounts on them. If your credit limit would allow it you could combine them into one, just so that it's easier to keep track of your debts? You may even be able to look into stoozing if you're feeling confident :-)

Good luck going forward x

OCS_Fan

Happy MJ - the £45 goes into an account for my son (child trust fund) to save towards university fees etc. I have two children from my marriage who are 22 and 20. One is just about to start second year of university course in London and other has just finished university and looking for a job. She has said I can stop paying her £80 a month as soon as she gets some work, even temporary. I could stop saving £45 for time being. It seems a drop in the ocean though.

ilovelondontown

I agree with others, there are PLENTY of opportunities to cut back here and there, in ways that won't feel like they make a difference day to day.

Given how much you owe you do need to trim back on "luxuries" Everything on this list that isn't a bill needs to be cut, some by half. You cannot be in this much debt and be spending £60 PM on Cable tv.

£400 pm on food is ALOT. Added to this another £20 on drinks for the house and £51 eating out? I'd be willing to bet there is a lot of waste food in the bin. Go down a brand where possible and only buy what you need- plan ahead and use the freezer for yellow label shopping - the only thing you'll notice is the extra change in your pocket at the end of the shop.

And while it's another factor altogether, is staying with your partner for the financial benefit really the right thing to do? Emtionally or morally?