Really new to this and need help deciding on time frame etc.

Carrie1983

Hi,

I won't bore you with the back story, but in short, my ex husband left me last Halloween, with a house we'd lived in 3 months, having sold our beautiful house with slightly lower mortgage and bought this. We have a 3.5 year old daughter.

I stayed in the house as mortgage is 604 a month and with maintenance and my tax credits, as well as my part time salary, I wouldn't have got much in the way of housing benefit and would have been spending more on rent. Although swings and roundabouts - any repairs wouldn't be up to me, and I'd be less tied, and wouldn't have a house needing so much decorative work.

When he first left, I panicked about being able to afford to finish the house; then I found he'd emptied the bank account of what was left from the sale of first house, so there was no change I could do anything.

I had never really been in debt before, nothing unmanageable, always cleared my credit card monthly as used it for fuel. Now, though, I have accrued about 11k of debt - 6k is on interest free (Virgin) and the rest on LTSB Mastercard. They contacted me a couple of weeks ago to ask why my debt had got so high, considering a previously debt free past, and what had changed. I explained and they asked me to go in to meet with the account manager, which is what made me realise I had to start paying off more than the minimum payments. I haven't had the meeting yet, but I know what I need to do and had already been making plans before the call. I haven't been spending on the cards, but had only been making the min payments, by DD.

Apart from that, I had the student loans company student loan, which I never really think about as it is taken from salary after earning a set amount. And my mortgage is now sitting at about 108k on fixed rate until 2017, with repayments of 604 each month. As soon as I clear most of the debt, I want to start making overpayments on that.

Anyway so here are my monthly outgoings by DD:

Mortgage £604.12
House Insurance (imperative as part of having mortgage) £39.60
Water (rates) £41.71
Council Tax £70 (£83 x 10 months)
TV Licence £12.12
Utility Warehouse Broadband, Phone including phone line and calls, Electricity (average, some months lower, some higher) £80
Mobile £38
Gym (on corporate package with local sports centre, as I work for county/tied in until July) £32.50 (have just managed to get this down to £20)
Daughter's Swim Lessons £18.50 (just got this down to £14.40)
Love Film £5.99 (cancelling)
Car Insurance (fully comp) £33.96
Car breakdown (have used twice this year, so def worth it - full national recovery) £8.36
Lloyds TSB min payment is around £90 (looking into using the 0% on my barclaycard and closing this card, or closing both cards and getting a consolidation loan as advised by bank).
Virgin min payment is £60
Childcare (average and cannot cut this back) £340

Other monthly costs:
Food/Cleaning/Toiletries £150
Fuel (use a lot because my job is mobile, but I get a good reimbursement from employer. This is a guesstimate) £150

So I make the total spend around £1740, taking account of the reductions and cancellations.

Other annual costs:
Car Tax £130
Tyres/Maintenance?
Service?
MOT?
Heating oil (cannot go on gas) £600
Chimney sweep £40
Boiler Service (actually done every couple of years) £100?

Income has recently reduced due to having to lose hours as we are funded (and yes, I am looking for other work, and would also like to go full time, which I've been trying to do for a few months - daughter starts school in Sept and I feel happy that I've managed to stay part time for as long as I have). I have also lost some child maintenance, and some tax credits. I had a recent overpayment of tax credits, which was from the 11/12 year!!!

So my income is:
Salary (22 hours term time only for county council) £685
Fuel reimbursement (average) £100
Tax credits £665
Child maintenance £160
Child benefit £88

So about £1700 a month.

I am already overspending, before even taking into account the annual one off costs. My debt has come from divorce costs, euthenasia of my horse (which I was left with after the divorce), oil for this year, car repairs, and some other costs. I have struggled this year, and a lot of that has been because I have had to get used to losing another full time income. Our household income was nearly £3000 a year, and our costs were similar except had a horse and another car, so as you'll imagine, it's been a big drop.

Now, I have lots I am in the process of selling... about £1500 worth. I have a fuel reimbursement due for several months... about £1000. I am also in the line for several full time jobs soon, one of which will not involve an increase in childcare. So I feel positive I can make big dents in the debt, but I'd like it gone by new year 2015 and a couple of people have said this is really unrealistic. There is currently about £2000 in my bank account.

I am already addicted to finding ways of cutting back, and planning overpayments. I'd like to sell the house at some point before I have to get my ex off the mortgage (by 2017 which is end of fixed rate) and give him his lump sum (12k), but there is a mortgage release fee and I want to continue living with these low housing costs for as long as I can and then when I do sell the mortgage will be less to pay off.

Carrie1983

Also, my phone contract ends in May, and I will be going onto SIM only then.

It is worth me keeping the £20 a month gym membership even beyond July, as I take my little girl swimming a lot, and that would amount to more than £20 pcm.

I will use one of the jobs as an exampe, if I get it, my total monthly income will increase to around £2200 but my expenditure wouldn't really increase, so it would allow for big debt overpayments of 2-300 per month.

Townses

Look into Autoaid breakdown cover. Think it's about £38 for the year. Only difference is that you pay initially for the recovery etc and then claim back but we've had to claim a couple of times and it's really quick.

sam_in_leeds

£40 a month seems quite high for home insurance?

You need home insurance, but you might not need to get it from your mortgage provider.

Might be worth a look?

newmum1

Just a question if your ex husband cleared out the bank account and you are paying the mortgage alone at present can you not reduce the 12k lump sum that is due to him?

Also does he support your daughter financially?

pennypusher

Would you be better off on a water meter? Can you pay your council tax over 12 months instead of 10. Do you have a spare room you can rent out or do you live in an area where you can rent out your drive?

haycorns

Are you able to get/ using childcare vouchers though your employer?

also you can ask to pay your coucnil tax in 12 payments rather than 10. Won't save you money , but will make it easier to budget in future.

Carrie1983

Hi all,

Thanks for advice. Yes I can ask for CT over 12 months; although I don't struggle to pay, it will make budgeting a lot easier.

The mortgage is 107k at the moment and the house, in its need of decoration, has been valued at 160k, the 12k figure was reached when the mortgage was still at about 109k and the mediator guessed that after fees and a realistic quick sale value, we'd achieve 40k equity (when being sat on there is 53k equity), so the 12k does seem quite fair. I'd feel uncomfortable cutting that, and also the more mortgage payments I make, the lower the mortgage left, but his chunk will never increase from 12k.

My home insurance is through barclays and this is 2nd year with them. I can shop around in April as it renews in June. I think I could get it for about 30 maximum pcm.

I will look into the water meter, but we are on a shared main so it may not be possible, and I am looking into getting a lodger so rates may be better for the time being.

I can get childcare vouchers but already get 70% paid by tax credits and can't claim both. Tax credits is by far the better deal.

The other way I am going to try to save is by cancelling my home phone outgoing calls (will keep the line and number as looks better all round if I have landline, plus I have broadband on same line), as I have my mobile and never seem to use the home phone to make calls!

AlexLK

Carrie1983 wrote: »

Anyway so here are my monthly outgoings by DD:

Mortgage £604.12
House Insurance (imperative as part of having mortgage) £39.60 Far too expensive, shop around.
Water (rates) £41.71 I reckon you can get this cheaper by going on a meter.
Council Tax £70 (£83 x 10 months)
TV Licence £12.12
Utility Warehouse Broadband, Phone including phone line and calls, £?
Electricity (average, some months lower, some higher) £80
Mobile £38Get this cut down to a £10 / £15 SIM Only deal.
Gym (on corporate package with local sports centre, as I work for county/tied in until July) £32.50 (have just managed to get this down to £20)Ask about cancelling early.
Daughter's Swim Lessons £18.50 (just got this down to £14.40)Any reason you cannot teach your daughter to swim?
Love Film £5.99 (cancelling)
Car Insurance (fully comp) £33.96Worth shopping around.
Car breakdown (have used twice this year, so def worth it - full national recovery) £8.36
Lloyds TSB min payment is around £90 (looking into using the 0% on my barclaycard and closing this card, or closing both cards and getting a consolidation loan as advised by bank).
Virgin min payment is £60
Childcare (average and cannot cut this back) £340

Other monthly costs:
Food/Cleaning/Toiletries £150Is this honestly all you spend?
Fuel (use a lot because my job is mobile, but I get a good reimbursement from employer. This is a guesstimate) £150Keep a diary, seems low to me.

So I make the total spend around £1740, taking account of the reductions and cancellations.

Other annual costs:
Car Tax £130
Tyres/Maintenance?
Service?
MOT?
MOT = £50 per year, service - do it yourself and budget £400 per year for maintenance.
Heating oil (cannot go on gas) £600
Chimney sweep £40
Boiler Service (actually done every couple of years) £100?I've never bothered.

So my income is:
Salary (22 hours term time only for county council) £685Without meaning to be rude - what is your current job? Only interested as you said you are looking to move / go full time.
Fuel reimbursement (average) £100
Tax credits £665
Child maintenance £160
Child benefit £88
Anything else you can do to up your income?

Please find my suggestions in red "ink".

Carrie1983

Hi Alex,

Thank you for your suggestions. All of the areas you have said to shop around - I intend to when I can, which will be when they are due for renewal (most between April and June).

I am intending to get the mobile onto a £10 sim only deal when it renews in May.

I want to keep the gym membership because at £20 a month (because I get wtc), it makes it more affordable to take my daughter swimming than payg which is £4.50 a time here (plus extra for her). Her swimming lessons at £14.40 also entitle her entry to the swimming pool for swims with me, and are the only activity she does.

My Utility Warehouse bill is stated as an average of £80, but this will go down a) when I drop the outgoing calls and b) if/when I work full time as I won't be in the house so much, and I also work from home some of the time.

Yes, my food/toiletries bill is low (if I don't spend at local shop). It's only me and my daughter only lives with me 70% of the time and eats many of her meals at nursery/preschool. I rarely do big shops. Although I don't have a precise figure.

My fuel: My car does 450 miles to a tank, and a tank costs £70. I only do about 200 miles a week maximum. My employer reimburses most of my travel as I am home/local school based.

I am a qualified Teacher but moved from that shortly after training due to lack of jobs. I have worked in education as well as social care ever since, and my career has always been in this area. I had my daughter, and after that I had a year off on maternity (I could because my husband earned an OK amount), then went back part time; I have been part time ever since and she is now 3.5 years old. I am looking to go full time because she starts school in September, and I feel there is now no need for me to be part time anymore, and I can be earning much more: the jobs I tend to do, allow some flexible working as well so I can still be there for my daughter around school/preschool. At the moment I work in an area of outreach education with a sector of society, through county council. My salary is, to be frank, pants, but this was a job I took before my husband left, and in the year since then I have had a lot to deal with so it's only been the last two months or so that I have taken job searching really seriously. I can double this take home salary by moving to full time. Tax credits would decrease but not by a huge amount.

If I stayed part time, I was going to take on one overnight in a local care home each week (they were advertising), but for my sanity and fairness to my daughter, I couldn't do this if working full time.

I think I've answered all your queries. Oh, servicing - is it really OK to do this myself? I do the oil, tyre pressures, screen wash, antifreeze myself, and if a light comes on then I take it to Halfords as they will sort it usually (for eg, a bulb - I buy it and they fit it for free).

AlexLK

Carrie1983 wrote: »

Hi Alex,

Thank you for your suggestions. All of the areas you have said to shop around - I intend to when I can, which will be when they are due for renewal (most between April and June).

It's worth ringing up the companies to see if you can cancel early or reduce your contracts.

Carrie1983 wrote: »

I am intending to get the mobile onto a £10 sim only deal when it renews in May.

Good, good

Carrie1983 wrote: »

I want to keep the gym membership because at £20 a month (because I get wtc), it makes it more affordable to take my daughter swimming than payg which is £4.50 a time here (plus extra for her). Her swimming lessons at £14.40 also entitle her entry to the swimming pool for swims with me, and are the only activity she does.

My wife and I take our son swimming once a week and it does mount up. However, if you took your daughter 4 times per month that would cost you £18.00 for yourself plus the child's rate for your daughter. It would not come to £34.40 per month (your gym plus swimming lessons).

Carrie1983 wrote: »

My Utility Warehouse bill is stated as an average of £80, but this will go down a) when I drop the outgoing calls and b) if/when I work full time as I won't be in the house so much, and I also work from home some of the time.

Sorry, did this count for your electricity too?

Carrie1983 wrote: »

Yes, my food/toiletries bill is low (if I don't spend at local shop). It's only me and my daughter only lives with me 70% of the time and eats many of her meals at nursery/preschool. I rarely do big shops. Although I don't have a precise figure.

OK, do try to work out an exact amount, as other MSE'ers will be able to show you how to save more.

Carrie1983 wrote: »

My fuel: My car does 450 miles to a tank, and a tank costs £70. I only do about 200 miles a week maximum. My employer reimburses most of my travel as I am home/local school based.

Still sounds cheap to me but that's great if you can get 450 miles to £70.

Carrie1983 wrote: »

I am a qualified Teacher but moved from that shortly after training due to lack of jobs. I have worked in education as well as social care ever since, and my career has always been in this area. I had my daughter, and after that I had a year off on maternity (I could because my husband earned an OK amount), then went back part time; I have been part time ever since and she is now 3.5 years old. I am looking to go full time because she starts school in September, and I feel there is now no need for me to be part time anymore, and I can be earning much more: the jobs I tend to do, allow some flexible working as well so I can still be there for my daughter around school/preschool. At the moment I work in an area of outreach education with a sector of society, through county council. My salary is, to be frank, pants, but this was a job I took before my husband left, and in the year since then I have had a lot to deal with so it's only been the last two months or so that I have taken job searching really seriously. I can double this take home salary by moving to full time. Tax credits would decrease but not by a huge amount.

If I stayed part time, I was going to take on one overnight in a local care home each week (they were advertising), but for my sanity and fairness to my daughter, I couldn't do this if working full time.

Sounds like you've got work sorted and your plans for the future.

Carrie1983 wrote: »

I think I've answered all your queries. Oh, servicing - is it really OK to do this myself? I do the oil, tyre pressures, screen wash, antifreeze myself, and if a light comes on then I take it to Halfords as they will sort it usually (for eg, a bulb - I buy it and they fit it for free).

No reason not to do basic oil services / spark plug changes / brakes etc. on your car yourself. Plenty of information on how to do. Depending on the age of the car you'll need a tool to reset the service indicator but you can buy those from eBay.