Help from the experienced on here

Direction-unknown

Hi MSE!,

I have been a long term lurker on the boards here, and although not in great trouble at the moment I feel it might be heading that way. I have a very good job and earn good money but we are very silly with it. We have been racking up credit card debts and actually running out of money at the end of the month, I know its not on my SOA and to be honest I actually dont know where it goes. I have attached my SOA for some advice on where we should be cutting back. I know for one eating out must stop, we do it alot and it defo adds up (looked at my last Bank statement)

Should I start a spending diary... worried we will fall into a debt trap! If we haven't already. Advise would be greatly appreciated. Should I sell shares and settle loan?

Very embarressed about putting this on public forum.

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................ 4600
Partners monthly income after tax....... 600
Benefits................................ 0
Other income............................ 1300
Total monthly income.................... 6500
Monthly Expense Details
Mortgage................................ 577
Secured/HP loan repayments.............. 1005
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 129
Electricity............................. 50
Gas..................................... 0
Oil..................................... 60
Water rates............................. 0
Telephone (land line)................... 35
Mobile phone............................ 50
TV Licence.............................. 28
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 600
Clothing................................ 100
Petrol/diesel........................... 200
Road tax................................ 20
Car Insurance........................... 48
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 200
Childcare/nursery....................... 0
Other child related expenses............ 200
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 15
Buildings insurance..................... 19
Contents insurance...................... 0
Life assurance ......................... 15
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 0
Entertainment........................... 700
Holiday................................. 150
Emergency fund.......................... 0
Total monthly expenses.................. 4226

Assets
Cash.................................... 0
House value (Gross)..................... 420000
Shares and bonds........................ 9300
Car(s).................................. 30000
Other assets............................ 8000
Total Assets............................ 467300

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 124500...(577)......0<
Mortgage 3 (rental)............74500....(400)......0<
Mortgage 2 (rental)............94500....(605)......0
Total secured & HP debts...... 293500....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Audi Finance...................33000.....400.......5.6
Credit card....................4500......100.......0
Unsecured loan.................11500.....375.......0
Total unsecured debts..........49000.....875.......-

Monthly Budget Summary
Total monthly income.................... 6,500
Expenses (including HP & secured debts). 4,226
Available for debt repayments........... 2,274
Monthly UNsecured debt repayments....... 875
Amount left after debt repayments....... 1,399
Personal Balance Sheet Summary
Total assets (things you own)........... 467,300
Total HP & Secured debt................. -293,500
Total Unsecured debt.................... -49,000
Net Assets.............................. 124,800

Townses

Hi. I'm in the same sort of situation as you although with not quite your level of income sadly!!

I haven't done a soa yet but have started to become more aware if where our money goes by taking part in the weekly spend challenges, it's quite an eye opener as I would of said I don't impulse but much but then last week I spent nearly £50 of which half was unplanned. It's definitely making me more aware of my spending habits.

Maybe try a couple of the challenges?

~Beanie~

Direction-unknown wrote: »

Groceries etc. ......................... 600 - That is HUGE for 2 adults and a child, can easily be cut
Entertainment........................... 700 - Wow, massive. Is this the eating out that you are planning on cutting back on?
Holiday................................. 150 - That doesn't seem much for a family holiday imo
Emergency fund.......................... 0 - Need something here

Don't worry about being embarrassed, nobody here knows who you are and you are in the right place to come for help.

To be honest, with almost 50K of unsecured debt I think you are already in a debt trap!

I would definately keep a spending diary, your SOA shows a surplus of £1400 yet you say you never have any left at the end of the month? You need to find where that goes, thats more than my monthly wage that can't be accounted for!

I have made comments on a couple of things in your SOA, overall I don't think it looks too bad but you definitely need to work out where that surplus is going.

R_P_W

What have you spent the loan and credit card money on?

33k of car finance? Wow. What is the balloon payment at the end?

You obviously have a very healthy income (about the same as my wife and I) but you are just squandering it!

EchoDelta

Definitely keep a spending diary for a while to see where the money is actually going - make sure you put absolutely everything in it! It was a real eye opener to see what I was spending with nothing much to show for it.

Tixy

Hi and welcome to the forum. Posting your SoA is a good first step.

Whilst there are definitely places you could cut back the items listed on your SoA I would focus on what isn't on there. You have more than £1400 spending a month that you haven't been able to allocate to anywhere.

If you could pay the whole of the £2274 towards your debt (even if you didn't make any further cutbacks) then you could get all your unsecured debts paidin 18months.

If you don't make changes and don't find out where this significant amount of money is going then you will continue to rack up debts to the point that you won't be able to turn things round easily.

A spending diary is really essential to find out what is missing from your expenditure.

Some possible missing costs
Have you accounted for tax on your rental income anywhere?
Is your council tax right? it looks low for the value of your house.
Do you not pay water? (or is this in with council tax?)
Car maintenance (servicing, tyres etc)
Is that really all you spend on presents for a whole year (christmas, birthdays, add hoc items like weddings, births etc)
Nothing on haircuts? medical? opticians? dentists?

tallyhoh

Wow, I mean like wow:eek:

Agree with keeping a spending diary to see where the surplus is going.

Do you eat out a lot as your grocery bill is £600? ours was £165 for 3 adults last month & included wine. There's definitely scope for saving there. How about setting a daily allowance for food per day, £10 for example, you could easily feed 3 people for that.

What is the £700 a month on entertainment, do you have expensive hobbies?

theoretica

Looking at past bank statements is a good way of seeing where your money has been going - and a spending diary sounds a good idea for you so you can target your spending to where you appreciate it most. I think you probably need to think more about money - not worry about it, but just keep a better watch on it and make plans and check they add up rather than leaving it to care for itself.

If you had less debt and no shares would you take out a loan to buy the shares? If no, then I think that is an argument for selling them.