Advice Needed!!!

ukpobrien31

Hi all, not sure which area to post this one, so please forgive me.
I can't believe that I'm actually doing this - but I'm after some major help please!!!

I guess I'm like thousands of others (or maybe I'm not!!!) that spend beyond their means.

I have fallen into that trap and I'm now worrying big-time about how to get out this hole!!!

Briefly - it started when we bought our first house ten years ago. We had a 35k mortgage on a 50k house (in-laws bunged the rest). Moved three years later and sold for 68k and bought a house for 80k. Over the years since we have increased the mortgage via equity release loans and last year even a 20k loan from Northern Rock.

I was made redundant at the end October of last year and was out of work for 6 months before I found a new job. Fortunately my PPI insurance paid out for the period I was off but that only covered the payments on the mortgage, equity release loans and personal loan. I had to dig into the redundancy money for the remainder of the bills and day to day living expenses.

I'm now at the point where I've been in my new role for only 8 weeks but the joint account is overdrawn (approx. £400) until I get paid this week. (I'm currently earning 27k!!!)

Just to conclude my debts as follows:

Main Mortgage = £122,065.50 Re-payment = £636.23
Equity Release = £18,903.91 Re-payment = £98.53
Equity Release = £24,998.37 Re-payment = £130.3
Personal Loan = was originally £20,000 Re-payment = £218.08

Total debt = £185,967.78
Total Monthly Repayments = £1083.14

The mortgage and the equity release loans are on a straight forward re-payment policy. But when I check the statements, the interest charged is more than the re-payment amount!!! I think I need to refresh my memory with the details of the policies as I can't remember how it all works.

So there it is folks, my current life style laid bare for all to see. If anyone has any help or advice then it really would be appreciated. It's so that I'm not sleeping at night worrying about it!!!

Regards,

Pat.

angelavdavis

Hi, do you have any redundancy money left?

Storm

hi Pat :hello: and welcome to DFW,

Firstly, can you pull together a Statement of Affairs (see southernscousers sticky) listing all your income & outgoings each month - we'll then be able to see if there's areas in which you're currently paying over the odds etc.

You definitely need to have a look at your loans if the monthly payment is not even clearing off the monthly interest as this will be increasing your debt each month and when I read that I went :eek:

Please don't panic though, we've all been through the sleepless nights thing, and at least now you're working again you should be able to come up with a good plan for paying everything back.

Storm

misspoppy

Hi two things but firstly well done for realising you need to change.
1. you need to post a SOA (statement of affairs) details of how to do this are at the top of the previous page under the stickies. This will enable you to see what is going on with your finances are you coping or not? People will then make suggestions about how you can make savings to through at your debt. The problem is that with the debt you have its likely to have high penalties for overpayments or early clearing. You need to find out what your interest charges are these debts and any penalties they will impose and what the current balance is.

2. what is it that you want to achieve? its not clear from your post.

Another good suggestion is to keep a spending diary for a month you and your wife need to write down every penny you spend so you can see where you waste money.

good luck there is lots of support here.

ukpobrien31

Hi All, many thanks for your replies so far.

And apologies for what appears like cross posting, my PC crashed earlier and I didn't think it had worked so I posted here instead.

As soon as I get home I'll download some statements from my HSBC account and drop them into a spreadsheet and total everything up.

I guess I just want to regain control of the finances and to be able to account for every penny and stop things spiralling out of control (he says, thinking it's not already!!!)

No, all redundancy money gone, no savings and only myself working. Other half was part time but no more - currently looking!!!

Serioulsy though folks, many thanks once again for replying.

Regards,

Pat.

GettingThingsDone

Hi Pat,

You're definitely in the right place - there are millions of us overspenders, but luckily we have this place to help us get things in perspective, have our light-bulb moments and generally try and get things back under control.

Just a quick one about repayment (or 'capital and interest') mortgages - initially the payments will mostly be interest, but as more and more of the loan is gradually paid off, the interest will become a smaller and smaller part of each payment. If you really want to see the detail, ask your lender(s) for an amortisation table and it will show the split over the years...

Hope that wasn't too boring!

gtd

ukpobrien31

Well folks, here goes.........

27/06/2007 TV Rental -7.00
26/06/2007 BRGAS-GAS -31.00
18/06/2007 BRGAS-ELECTRICITY -85.50
15/06/2007 Council Tax -106.00
14/06/2007 Life Insurance -14.03
11/06/2007 Phone/TV/Broadband -51.65
07/06/2007 NORTHERN ROCK -218.08
05/06/2007 Home Insurance -17.06
04/06/2007 PPI Insurane -50.74
01/06/2007 Equity Release Loan -130.30
01/06/2007 Equity Release Loan -98.53
01/06/2007 Main Mortgage -636.23
01/06/2007 TV Licence -11.37
01/06/2007 Water Rates -29.45
01/06/2007 Employment Union -12.70
Total -1499.64

Fuel - Work
26/06/2007 Petrol -42.75
19/06/2007 Petrol -44.00
13/06/2007 Petrol -45.15
31/05/2007 Petrol -44.08
Total -175.98

Mobile Phones
18/06/2007 Pay & Go -10.00
11/06/2007 Contract -25.89
Total -35.89

Children's Savings
01/06/2007 -10.00
01/06/2007 -10.00
01/06/2007 -10.00
Total -30.00


Cash
27/06/2007 Cash -20.00
24/06/2007 Cash -30.00
18/06/2007 Cash -20.00
09/06/2007 Cash -30.00
Total -100.00

Groceries
26/06/2007 OCADO -110.01
25/06/2007 ASDA -39.65
22/06/2007 SAINSBURYS -25.43
18/06/2007 M COOP RETAIL FOOD -10.31
18/06/2007 MARKS SPENCER -146.19
14/06/2007 MARKS SPENCER -27.66
13/06/2007 SAINSBURYS -15.38
12/06/2007 MARKS SPENCER -34.67
11/06/2007 M COOP RETAIL FOOD -9.17
06/06/2007 ASDA -19.00
06/06/2007 TESCO -94.39
04/06/2007 M COOP RETAIL FOOD -13.47
01/06/2007 M COOP RETAIL FOOD -17.69
Total -563.02

Misc
26/06/2007 BEATTIES -14.77
26/06/2007 THE BODY SHOP -7.65
22/06/2007 Cheque -30.00
22/06/2007 Cheque -22.70
19/06/2007 Cheque -57.75
18/06/2007 VIRGIN RETAIL -28.00
18/06/2007 WOOLWORTHS -16.69
14/06/2007 BOOTS -42.40
11/06/2007 HOMEBASE -11.97
07/06/2007 Cheque -9.00
05/06/2007 Hairdressers -70.00
05/06/2007 Carpet Cleaning -39.98
05/06/2007 Cheque -80.00
04/06/2007 BOOTS -19.64
Total -450.55

Grand Total -2855.08

Salary & Other Incoming
31/05/2007 Salary 1743.00
20/06/2007 Tax Credit 226.38
18/06/2007 Child Benefit 169.20
Total 2138.58

Man that is scary when I read it back!!! But that is it for one month.
Thankfully I've never used a credit card in my life and I don't intend to start now.

Would it be worth me contacting my bank in order to try and consolidate the mortgage and the two equity release loans? Is that something that they would do?

I've just contacted Northern Rock and the current balance of the personal loan is £23,770.72. The APR is 5.7%. However if I settle up before 24/08/07 the figure would be only £18,816.89.

I think that is everything. By all means if anyone has any questions then please do not hesitate to ask.

Many thanks once again.

Regards,

Pat.

hypno06

Hi, and welcome. I think that you need to look carefully at your food shopping - there are lots of trips to M&S which are not cheap. Use the alternatives, and head over to the Old Style board here to get cheap ideas for eating really well on a budget. Your grocery shop can come right down.

Also the odds and ends - cash out of the machine and all those things you have written cheques for, hairdressing, virgin retail etc - were they all for absolute essentials or were they really for things you didn't need but are in the habit of buying, even when you can't afford them?

You are obviously keeping a reasonable track of what you are spending but you need to keep a detailed spending diary to get on top of all those extra payments - see where your money really goes and cut back where possible.

Good luck.

angelavdavis

Hi There and welcome to DFW!!!

My Comments below

ukpobrien31 wrote: »

Well folks, here goes.........

27/06/2007 TV Rental -7.00 - Can you not buy a second hand TV to get rid of this? Possible saving £7

26/06/2007 BRGAS-GAS -31.00 This is high - see below. Possible saving £5.

18/06/2007 BRGAS-ELECTRICITY -85.50 This is really high - have a shop around using a comparison site to lower this. I reckon you could save £20 here
15/06/2007 Council Tax -106.00
14/06/2007 Life Insurance -14.03
11/06/2007 Phone/TV/Broadband -51.65 Can you lower the Sky package? Possible Saving at least £16
07/06/2007 NORTHERN ROCK -218.08
05/06/2007 Home Insurance -17.06
04/06/2007 PPI Insurane -50.74 - I know this has paid out previously, check it will again and is still worthwhile. Many policies aren't worth the paper they are written on
01/06/2007 Equity Release Loan -130.30
01/06/2007 Equity Release Loan -98.53
01/06/2007 Main Mortgage -636.23
01/06/2007 TV Licence -11.37
01/06/2007 Water Rates -29.45
01/06/2007 Employment Union -12.70
Total -1499.64

Fuel - Work
26/06/2007 Petrol -42.75
19/06/2007 Petrol -44.00
13/06/2007 Petrol -45.15
31/05/2007 Petrol -44.08
Total -175.98
This is a heck of a lot of petrol - can you reduce this in any way? Possible saving £50.

Mobile Phones
18/06/2007 Pay & Go -10.00
11/06/2007 Contract -25.89
Total -35.89


Children's Savings
01/06/2007 -10.00
01/06/2007 -10.00
01/06/2007 -10.00
Total -30.00

Pointless saving in any way if you are in debt, you are better of settling debts and increasing these when you can afford it.


Cash
27/06/2007 Cash -20.00
24/06/2007 Cash -30.00
18/06/2007 Cash -20.00
09/06/2007 Cash -30.00
Total -100.00

What are you spending this on? Start a spending diary and track what this is being spent on. It will help highlight areas where you can cut down.

Groceries
26/06/2007 OCADO -110.01 What?!
25/06/2007 ASDA -39.65
22/06/2007 SAINSBURYS -25.43
18/06/2007 M COOP RETAIL FOOD -10.31
18/06/2007 MARKS SPENCER -146.19
14/06/2007 MARKS SPENCER -27.66
13/06/2007 SAINSBURYS -15.38
12/06/2007 MARKS SPENCER -34.67
11/06/2007 M COOP RETAIL FOOD -9.17
06/06/2007 ASDA -19.00
06/06/2007 TESCO -94.39
04/06/2007 M COOP RETAIL FOOD -13.47
01/06/2007 M COOP RETAIL FOOD -17.69
Total -563.02

????What! How many people is this for? This is crazy spending and to be honest, looks like impulse buying from the regularity. How much is being thrown away? How full are the fridge/freezer/cupboards? Please please go over to Old Style and look up tips for cutting back such as making sandwiches for lunch, meal planning, storecupboard challenges, etc. Truth is, many of us did this before our lbms. There is a lot of room for reduction here. Possible saving £200+.

Misc
26/06/2007 BEATTIES -14.77
26/06/2007 THE BODY SHOP -7.65
22/06/2007 Cheque -30.00
22/06/2007 Cheque -22.70
19/06/2007 Cheque -57.75
18/06/2007 VIRGIN RETAIL -28.00
18/06/2007 WOOLWORTHS -16.69
14/06/2007 BOOTS -42.40
11/06/2007 HOMEBASE -11.97
07/06/2007 Cheque -9.00
05/06/2007 Hairdressers -70.00
05/06/2007 Carpet Cleaning -39.98
05/06/2007 Cheque -80.00
04/06/2007 BOOTS -19.64
Total -450.55

OK, so this is £450 spent on what? Its almost all obvious luxuries - this is all money over and above what you earn so all of it is just adding to the debt! Again, a spending diary will highlight this.

Grand Total -2855.08

Salary & Other Incoming
31/05/2007 Salary 1743.00
20/06/2007 Tax Credit 226.38
18/06/2007 Child Benefit 169.20
Total 2138.58

I reckon you could save £800ish on your outgoings, although some are missing (annual payments - Car Tax, MOT, Servicing, opticians, dentist, etc)

Man that is scary when I read it back!!! But that is it for one month.
Thankfully I've never used a credit card in my life and I don't intend to start now.

No, you are spending on an overdraft! What is your overdraft rate?

Would it be worth me contacting my bank in order to try and consolidate the mortgage and the two equity release loans? Is that something that they would do?

No no no, please no more consolidation - it hasn't helped you in the past! It only helps if you stop spending!!! There are plenty of people who would agree that consolidation is NOT the answer - NOT SPENDING is the answer - particularly for someone like yourself with more than enough money to live on and lots of areas to cut back!

I've just contacted Northern Rock and the current balance of the personal loan is £23,770.72. The APR is 5.7%. However if I settle up before 24/08/07 the figure would be only £18,816.89.

Then overpay it - by cutting back and adding the £100 onto the payment

I think that is everything. By all means if anyone has any questions then please do not hesitate to ask.

Many thanks once again.

Regards,

Pat.

Pat, sorry if I have been too straight - I don't mean to be overly critical - but the impulse buying needs to stop here if you aren't to get in more trouble. You have the facilities to sort out the situation although probably not in the timescale you would like.

Credit cards aren't bad if you are clever about how you use them. Using 0% to spread payments over a period for an item means you only pay the initial 2% admin fee. If you were (for example) to use a cashback card for £400 worth of groceries every month and pay it off completely, you will earn a minimum of £4 (£16 with some special offers) - just for using their card instead of a debit card. Secured debt that you have generated is probably the worst type tbh.

Can your OH get a job to help increase the income?

ukpobrien31

Hi,

Not too critical at all - it's just the kick up the backside I need me thinks.

The phone/tv/broadband is with Virgin Media - when Sky pulled the channels I rang up to complain and got my package reduced - I was paying nearly £80!!!

The petrol is a must - I work in Rugby, so that's a 64 mile round trip each day.

As for the other comments, I have to totally agree with you.

I've got some homework to do!!!

I can't thank all you guys enough!! It's glad to know I'm not alone.

Cheers,

Pat.

angelavdavis

No you are not alone at all. Post away, there is always someone around to help out.

£80 for TV - that's scary! Its worth looking at Martin's tips for this as there are always special offers going.

Could you arrange to work from home one day a week. I also used to work about the same round trip from home, but I negotiated working from home (OK, I admit not everyone's job fits this one, but it saves the cash if you can).

In spite of my comments (I think I was empathising with your shock! ), this is doable for you without too much sufferance!

Here is my post from last year that kind of brings things into perspective - as mentioned, I was there too before my lbm!

Good luck Pat.