How shocking is this?? My SOA

getmore4less

Tommy81 wrote: »

Thanks for posts folks.


We do have a healthy surplus although I admit that we often spend the £900 on unnecessary items!! I Know that I should use this towards the debts but then part of me thinks that at least I can make relatively large payments and have some money left to do things with my son etc.

I think I will look at using more of the surplus to pay down debts though as I would love to get rid of them asap!

I think this is your problem, you just don't plan/Budget.

£900pm not planned remember that is on top of the £30k accumulated debt, so the total of just spent on something is probably in the region of £50k-£60k if this has gone on for a number of years.


Look at a full years income and allocate it to the categories so every penny is accounted for.

Allocate all the income to something on an annual basis, the SOA is just a snapshot year/12.

Know in advance how much you have to take the little one out rather than make it up as you go along, decide how much you want to allocate to presents, allocate some money to keep the car going etc.

Do the annual totals it gives a much better picture of what you are spending. Normalizing on a year shows the relative cost and you can judge value better

As long as your food/house budget is not more than £250(keep a spending diary) I would look at the other things first much easier and bigger reductions to allocate to debts for much smaller effort, once the easy stuff is done then look at the food.

I think I would adjust the SOA to include the real costs of all the things, up your wife contribution to reflect the totals.

Now given what you probably have left after the excess gets eaten up by things you forgot a two year plan is probably a good starting goal


I think I would do a reverse planning SOA based on a Debt free date of end of March 2016 two years away.

You can probably do it quicker but this gives some room for errors emergencies and oops I forgots

Work out the debt repayment needed to clear the debt in the two years.

Then work out how you want to allocate what's left to each category, if there is something you spend on not on the list add the category.

Include a emergency fund with house and 2 cars you need this as well as car replacement funds.

Then track to the plan with a spending diary or a software tool if you keep tot he budget/plan debt free in two years(or less) and then the debt payment can go to the mortgage.

I use MSMoney it's free, has loads of features to help with the budget planning and tracking.


The trick with budgets is they need to be realistic, achievable, and still give some life.

Extream budgets can work, a few months might be a good idea to see what you really miss you can always add things back if you decide they are more important than the debt going on a bit longer.

If the tracking is showing you are struggling with the targets make them a bit bigger and reduce the debt repayments might need a 2.5 year plan, if under spending, increase the payments or the emergency fund first.

A good example of a plan would be to do clothes audit, work out what you have and what you will really need over the next two year, budget for that and you can then keep an eye out for the things you have planned to buy in sales you can buy stuff early/cheaper then the budget for the 2 years will go further. I do things like grab jeans for £2 from Tesco or pants/socks when cheap/reduced, I know I will need them as older ones wear out.


Read up on snowballing debts.


Planning then tracking is the key to success.

getmore4less

Tommy81 wrote: »

Our entertainment budget is fairly random and some weeks we will spend nothing! We are definitely trying to reduce this outgoing!!

Plan what you want to spend over the year, then you can decide lots of little going outs or a few nice ones or just for specials £25pw average for 2 adults over a year is quite reasonable if it includes the odd party, meals, pubs Sunday lunches etc.

Another category we have is takeaways track these separately from the groceries.

getmore4less

£2937pm take home is a gross of around £48.5k.

I would review and consider pension contributions or other sacrifice options to get out of the 40% tax bracket. Especially if your employer matches and you are not taking advantage.

getmore4less

£89000 1.5% £497pm works out at 203months just under 17 years.

Probably not much you can do here even extending the loan to 25 years would be £356pm freeing up £141pm

If you deal with the debt in 2 years then allocate £1kpm to the mortgage it will be gone in 9 years if you allocate the full £1184+current £497 making a total of £1681 the mortgage will be gone in 6y 1m(from now).

Just think about that as a motivation Totally debt free in 6 years WOW.

getmore4less

Tommy81 wrote: »

Description....................Debt......Monthly...APR
Mortgage...................... 89000....(250)......1.5
Total secured & HP debts...... 89000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
tesco loan.....................5800......364.......7.8
Barclaycard....................6000......120.......0
Barclaycard....................4000......200.......6.9
overdraft......................2000......25........13.9
very...........................416.......45........18.9
Creation.......................7000......230.......0
MBNA...........................5000......200.......16.9
Total unsecured debts..........30216.....1184......-
Amount left after debt repayments....... 899.2

Seems to be a couple of warnings about creation not read them in full just noting that they get a mention on here for problems.

Also need to factor in the 0% ending.

http://www.whatsthecost.com/snowball.aspx
A quick snowball based on min payments with what you are paying now.

has it done in 28 months probably quicker when you factor the min payments properly.

To get down to end March 2016 you need to add another £200pm from the £900 that is free(ish).

I think that's a good target while you stabilise the budget if you find more savings you will nail this much quicker but build ups some emergency funds and make sure you have everything on the SOA, think of everything you will be spending in the next 2 years.

I would

Just pay Very off now

throw as much as you can at MBMA,

Look for some zero% options I quite like spend cards they don't have charges and can divert the cash to the high rate debts.
The BT card have fees but might be worth it take over the OD and MBNA to reduce the interest probably reduce the OD as that can be used for cash flow depending on how that is charged.

Long term cards are probably the ones to go for even if they will be lower credit limits at the high rate debts will be gone fairly quickly anyway.

look out for the 0% finishing.

Factor in the OH debts as you need to pay off the highest rates first, no point usung her 350 to pay of you 0% if she has some with interest.

thecassman86

Hi Tommy :wave:

Tommy81 wrote: »

Of course it would be a different scenario if she was out running up further debts but this is not the case. I don't think that having a joint account would have made any difference to our current financial predicament

I just wanted to add my two-penneth to this... My Wife and I kept our finances separate for a while, it "worked for us" too... But then we started to lose track of money and got into debt and things just got a bit on top of us (as it has for you) and we decided to sort things out.

We now have joint finances. My salary goes into one account which all of the bills go out of. I have surplus income now after bills so i leave some of it in there (emergency fund) and transfer the rest into our other account which is where my wife's money goes... And we ONLY spend from that account. We never have to worry about bills coming out of there and therefore we always know what money is available. Easy.

I always said that separate accounts "worked for us", but they didn't. Trust me, combine your finances and everything becomes infinitely easier to follow.

Buffythedebtslayer

Hi Tommy


I am rubbish at SOAs etc but just wanted to say hello and welcome, I am so impressed with the replies to your post, people here are quite amazing doing all the maths and working out interest.


amazing!


Lots of luck with working out a plan and paying off the debt


xxx