Want to reduce monthly costs.....SOA. Please help.

Debt-hater

Hi all.

Currently I have high monthly overheads leaving things tight at the end of each month. I wanted to consolidate some debts to lower monthly costs but have poor credit currently. I am getting a healthy pay rise on New Year's Eve but still want to reduce monthly outgoings. I currently have no savings, and worry about emergency funds, and am not in a position to save.

Annoyingly at the beginning of the year I had good credit and over 10k in the bank, but then I bought a house and things have gone downhill.

What I really want to achieve is to get rid of the 'personal debts' bit of this, and improve my credit rating in the process.

Here's my SOA:

Monthly income:

Monthly income after tax: £2200 (rising to £2700 in new year)
Rental income: £500
total: £2700 (rising to £3200 in new year)

Monthly expenditure:

House:
Mortgage: 512
Council Tax: 89
Gas + Elec: 54
Water: 25
TV License: 30
Sat TV, broadband and line rental: 50
Total: 760

Personal debts:
Loan: 322 (Balance 10300)
Loan: 151 (Balance 1300)
HP car: 312 (Balance 11000)
Credit card: 160 (Balance 2800, now on 0% BT CC)
Total: 945

Other costs:
Mess Bill: 200
Credit expert: 15
Insurance: 9
Contact lenses: 18
Car insurance: 173
Insurance: 15
Mobile: 60
Fuel: 60
Total: 550

Total Guaranteed monthly outgoings: 2225
Balance: 445

I made a note of every penny I spent last month:

Rail travel: 85 (used this as cheaper than driving, although I travelled much more than normal last month)
Food: 116
Drinks: 65
Presents: 90
Clothes: 67 (again, more than a normal month. I needed some physical training kit)
Total: 423

That leaves me £22 for any other costs.

I have one week until payday and have £7.50 left (of an 800 OD which I also very much want to get rid of as want to change bank accounts)

Can anyone recommend any way of reducing monthly costs / best way of reducing personal debts please.

Thankyou.

Tixy

Hi and welcome to the forum

It might be useful to complete one of the templates for the statement of affairs - as it helps you to remember to budget for costs that you don't pay each month.

E.g. for car don't forget to budget of tax, servicing, tyres etc, plus you can then try to budget an average figure for clothes, presents etc. It also prompts you to include APRs etc so you know which order to tackle your debts.

Do you live alone? or is the rental income a lodger?

Mortgage: 512
Council Tax: 89
Gas + Elec: 54
Water: 25
TV License: 30 how long have you had this? if paying monthly it should drop down to around £14 after 6 months.
Sat TV, broadband and line rental: 50 are you able to drop down to a cheaper package?
Total: 760

Personal debts:
Loan: 322 (Balance 10300)
Loan: 151 (Balance 1300)
HP car: 312 (Balance 11000) is this a recent buy? how soon until you could VT?
Credit card: 160 (Balance 2800, now on 0% BT CC)
Total: 945

Other costs:
Mess Bill: 200
Credit expert: 15 you could cancel this, and just use noddle monthly and buy your credit report for £2 every few months.
Insurance: 9 which ins is this?
Contact lenses: 18
Car insurance: 173 this is the killer in your outgoings - how long until renewal? do you shop around for the best deal?
Insurance: 15 which insurance is this?
Mobile: 60 can you use this less or drop to a cheaper package?
Fuel: 60 is a car essential if you are only using this amount of fuel? could you manage without one and use public transport until your debts are repaid?
Total: 550

Total Guaranteed monthly outgoings: 2225
Balance: 445

I made a note of every penny I spent last month:

Rail travel: 85 (used this as cheaper than driving, although I travelled much more than normal last month) how much is it usually?
Food: 116
Drinks: 65 at home or out?
Presents: 90 was this higher than usual - what is an average amount?
Clothes: 67 what is the average amount you spend?

I assume your £10k savings went for a deposit on the house? What was the £10k loan spent on in the last year? anything you could sell to pay off some debts to reduce outgoings?

Sazzie23

Hi Tixy

Out of interest please could you they'll me what does VT mean?

Tixy

Sorry - voluntary termination. Its the point in the HP contract where you could choose to hand back the car and terminate the agreement owing nothing.

Sazzie23

Oh I see, not actually relevant to me but just wondered ....

Thank you

theoretica

Added up £200 mess +£116 food +£65 drink is a lot for sustenance for one person. Though I suppose the drink probably comes under entertainment rather than sustenance.

wantabetterlife

You are spending £500 per month between car payments and insurance on a vehicle that you don't even use for work..doesn't make a lot of sense

spudsofa

Agreed with wantabetterlife...get rid of car, or downgrade to a cheap runaround. Your insurance for 1 month is almost like mine for 1 year ( I have a honda jazz ).

I use to drive a VW Golf, costed me more on repairs than the car itself !

W

datlex

Debt-hater wrote: »

Monthly income after tax: £2200 (rising to £2700 in new year)
Rental income: £500
total: £2700 (rising to £3200 in new year)

Monthly expenditure:

House:
Mortgage: 512
Council Tax: 89
Gas + Elec: 54
Water: 25
TV License: 30
Sat TV, broadband and line rental: 50 how long have you been in contract with them? Work out what you watch and then if it is available else where. I'm guessing you have a fairly basic package? Once you have evidence of a better deal elsewhere use it as a tool to get a better deal here.
Total: 760

Personal debts: What are interest rates?
Loan: 322 (Balance 10300)
Loan: 151 (Balance 1300)
HP car: 312 (Balance 11000)
Credit card: 160 (Balance 2800, now on 0% BT CC)
Total: 945

Other costs:
Mess Bill: 200 what is this? You have food listed elsewhere and it isn't one of your debts.
Credit expert: 15 total waste of money they are no help
Insurance: 9
Contact lenses: 18
Car insurance: 173 your car insurance is over £2000 a year!! Can you get this reduced?
Insurance: 15
Mobile: 60 seems high have you checked on bill monitor?
Fuel: 60 what do you use your car for? This seems quite high given you have said you use the train for work. Do you drive to the local station?
Total: 550

Total Guaranteed monthly outgoings: 2225
Balance: 445

I made a note of every penny I spent last month:

Rail travel: 85 (used this as cheaper than driving, although I travelled much more than normal last month)
Food: 116
Drinks: 65
Presents: 90 You spend over £1000 a year on presents? Who do you buy for what is your budget for them? You could cut this down and still give presents.
Clothes: 67 (again, more than a normal month. I needed some physical training kit)
Total: 423

That leaves me £22 for any other costs. Such as? You have already listed food, travel etc above.

I have one week until payday and have £7.50 left (of an 800 OD which I also very much want to get rid of as want to change bank accounts) This should have been listed with your other debts

Can anyone recommend any way of reducing monthly costs / best way of reducing personal debts please.

Thankyou.

Well done for coming on board. Some of us have lower incomes than you, some higher. What we have all learnt though to varying degrees is opportunities to release our cash from the hands of people like the supermarket, the utilities companies and the phone companies. I am sure with a little effort you'll be on board doing the same.

chevalier

http://www.stoozing.com/calculator/soa.php

This is the soa calculator that has been talked about. There are a few categories missing from your list above that you can fill in here.

good luck
chev

Jevvers

Hi welcome to the board. Agree with the others that you should look at car insurance and presents. If that £90 is regular then it's unsustainable. Don't feel you have to give presents of a certain ££ value, home made or thoughtful cheaper presents are often loved the best.

Lots of ideas on the Old Style Moneysaving board or the Christmas board. One of my faves I have done in the past is a James Bond martini kit = a martini glass, a vodka miniature, small jar of olives ( optional) in a shoe box filled with shredded tissue paper and then decorate the outside like a dinner jacket & shirt with bow tie - you can print it from a picture if art is not your thing. It's relatively inexpensive but the recipient will like the effort involved and the fun of it. Also no need for extra wrapping paper which also adds up.