Please help me reduce my outgoings

myteeduck

Hi

Can anyone help? I need to reduce this SOA so I can try to save £7500 for the cost of my car. It is due to run out of the payment I make in June 2015 and I will owe £7500 at that point. I want to try to make inroads into this amount while I have over 12 months until I hit this point.

I can't get rid of the car because Its worth less than I owe on it. In June 2015, I have the option to return the car and walk away (but I will see that as a waste of my money for the last 4 years). I can exchange the car for another one, but I've had this car since the beginning and I know its history, or the option I'm leaning to, is to refinance the car and carry on for a little longer. It is a Mini so its quite a reliable car, I still see the little ones going around!

I want to be able to refinance the car at a less amount than the £7500 so I want to be able to save as big a chunk as possible to put down to reduce the monthly payments. If people can help me to reduce my monthly outgoings then hopefully I will be able to start saving.

Any advice will be welcome.

Thanks you in advance

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1080
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1080

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 236.3
Rent.................................... 345
Management charge (leasehold property).. 25
Council tax............................. 59
Electricity............................. 44
Gas..................................... 0
Oil..................................... 0
Water rates............................. 14.27
Telephone (land line)................... 15.99 - I have a virgin line so installation costs skyrocket prices when looking to switch. (Linked with TV & Internet)
Mobile phone............................ 27.98
TV Licence.............................. 12.12
Satellite/Cable TV...................... 10
Internet Services....................... 10
Groceries etc. ......................... 80
Clothing................................ 10
Petrol/diesel........................... 80
Road tax................................ 20
Car Insurance........................... 31
Car maintenance (including MOT)......... 5
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 6
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1056.66


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 10000
Other assets............................ 0
Total Assets............................ 10000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 10422.9..(236.3)....7.1
Total secured & HP debts...... 10422.9...-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-


Monthly Budget Summary
Total monthly income.................... 1,080
Expenses (including HP & secured debts). 1,056.66
Available for debt repayments........... 23.34
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 23.34

Personal Balance Sheet Summary
Total assets (things you own)........... 10,000
Total HP & Secured debt................. -10,422.9
Total Unsecured debt.................... -0
Net Assets.............................. -422.9

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

pleasedelete

Did you have the same income when you got the car? That is massively irresponsible lending- it is 25% of your income on a car loan. You might need to bite the bullet- you dont have enough income to afford such an expensive car.

Car maintenance only £60 a year? dont you get it serviced? new tyres?

40% of your income goes on your car. The car must have cost more than your annual salary?

pleasedelete

What happens if you cant get a £7,500 loan or even a £5,000 loan. the car will have to be returned next year anyway. with your income a loan of £7,500 may be tricky- could be another 5 years and high amount of interest.

if your car is almost 3 years old (you said 4 year loan ending 2015?) it will need an MOT.

There is nothing to cut from your SOA that wiil save enough to achieve what you want- to have a lower loan than £7,500. You have no luxuries and I suspect a lot missing from your SOA. £6 on entertainment? You would need to be saving £200 a month to make a dent and after your car and essential house expenses there is less than that before you eat etc

Move to a shared room in a house? That might reduce council tax, management charge, water rates and electricity and possibly rent depending on the area that you live in? Move back to live with parents (if they are willing) ?

Lose the car or lose the flat. You wont be able to refinance the car in 2015 as you want at the moment and if you do then 5 more years to pay.

Or get another job?

Do you have any other debt or overdraft etc?

Scritti

I take home almost twice as much but would never think of driving around in a 10k+ car.

Good luck to you but I really don't understand it at all. Maybe it's because I'm not really bothered about cars but - on my salary at least - I couldn't justify spending any more than about 4 or 5k. And, even then, I would either save and buy outright or, worst case scenario, save as much as I could and use as little credit as possible.

myteeduck

Thank you for your replies up to now.

My income is more than it was when I got the car, but my living arrangements changed. My parents wanted to sell there house and move to a bungalow, and they came into some money so they bought my house.

My rent is the mortgage that my parents pay. I have it over a total of 17 years and I am 2 years into this. The house will be signed over to me in stages as I pay the mortgage. So after 5 years of being here, I will own a third and so on. Im classed as a renter at the moment though until the first chunk is signed over.

I couldn't get on the property ladder as I am single and as you can see, my wages are pitiful. This is the only way I am likely to own a house. I may decide in a few years to up and leave and hopefully if this place sells, I may walk away with a decent deposit for another house (If I meet someone). My parents didn't want me to throw money away renting and this seemed like a good option at the time.

The £6 on entertainment is a Netflix subscription. All my friends are married with children so I spend a lot of nights in the flat with my cat, so I get a lot of use out of this. I went on a night out last week and spent only £1.49, because as I am not a big drinker (wheat and alcohol makes me sick), I took the car and in return my friends paid my entrance fees (later on) and bought me several Colas to keep me going.

I shop at A**I so my groceries are £10 if I don't need much and £20 per week if I do. My freezer is tiny and filled quite willingly by my mother. I don't meal plan (which I plan to change) but I am quite good at living on next to no food in my fridge. I went from March payday until this weekend with absolutely nothing in my fridge bar a bottle of milk and 4 potatoes.

My car recently had 2 new tyres which I had managed to save up for and I have a 5 year servicing package which means I will only have to pay the MOT when it is 3 in June. I have my car tax payment and my MOT currently saved up waiting.

I do miss out on a lot of luxuries and I have done for about 3 years, while I had a credit card, but that is now gone and I had a couple of months blow out where I didn't care what I was spending, but I came to the realisation quite quickly luckily, that I probably wasted more money and that I preferred living on a budget saving every spare £1 or 1p that I had.

I know my original question is a big ask and I will seriously have to look at my options in 2015 but if I can squirrel away even £500 by then, at least I know I can.

Thanks

getmore4less

You have very little room to save much money

if this was a 5 year deal with balloon this was a very expensive car option and you don't use it that much
once the 5 years is up there will be the monthly payment saved but then the maintenance goes up another 5 years is probably going to cost about the same again.

£236*60 is over £14k + the 7500 balloon that's a £20k car!

With the save money option being very tight the other is to look at upping income.

Extra work, bar, clubs, that compliment your current jobs hours
New job that pays more
Job during your holidays


how big is the place you have

Lodgers

Is it in a region that would attract short term holiday lets(see airBnB) more money per night and short term so you have the place to your self more than a regular lodger, some people rent out there living room for odd nights.

Back to the car, you have already lost the money you cant get it back,

What you have to do is look forward, at what your transport options are and what they would be costing.

£230pm + the other running costs is a lot of public transport, many places have travel cards at much less than this a month.

How much is the car going to be worth?

The only place you have to save is your phone, internet, TV. at £78pm
Might be worth looking at a 4G package for the lot.

Summary
Focus on your TV, phone internet costs
Rethink your car and transport needs
Look for income opportunities


One other thing, if you are paying the mortgage that your parent have.

Are they declaring the interest component they need to pay tax on that if you pay it
When they transfer the house to you they need to do a CGT and SDLT assessments.

Typically on a 17 year mortgage at 4% paying 345pm would be £51000 after 5 years you have paid off 11600, about 23% not 33% unless your parents are gifting you some of the house?

FBaby

Is the car is perfect condition (not scratches etc...) and you've stuck to the mileage allowance? Those company will deduct as much as they wish if you haven't.

Are you sure the car is due to devalue by another 2500 by next year? Do you do a lot of mileage?

I had a car on the same lease arrangement than yours 3 years ago and was very worried as due to a change of work office, I had gone significantly over the mileage allowance and the car had a fre scratches so expected to have to repay £1000-£2000. In the end, I decided to sale it. I was pleased to find out that this type of lease meant that I was the actual owner of the car, so could actually put it for sale and just give the money back. It was a success, I sold it for £500 more than I owed, so instead of being £1000 out of pocket at best, I was £500 in profit.

I don't think there is anyway you will be able to save the money you need in 14 months time unless you take on an addition job, so might have no choice to return the car or sale it.

PasturesNew

You don't earn enough to afford the car. It seems to me that the best way forward is for you to get a 2nd job called "The car job" then to use that income to save as much as you can until the end of your current financing deal, while speaking to your parents about them lending you the balance when that date comes round.

Show the commitment now to them to get that debt paid down and they're bound to support you and lend you the money to keep it next year.

double_mummy

is there any way to up your income? a second job such as bar work or something at the weekends? if you work 2 8 hour shifts for 2 nights a week you will have over 4000 in a year from now or go and look at the up your income board

19lottie82

I wouldn't say you earn enough to live alone, let alone, live alone AND pay for / run your car.

You may see it as a "waste of money", but IMHO you have no option, but to hand it back ASAP.

What would happen if you need to shell out for repairs? You say minis are "reliable" cars, but I know a few people (including my OH, who is a mechanic), who would disagree with you.

Can you not look for a another job with better wages? Or an evening / weekend additional job?

At the moment you are living a champagne lifestyle on lemonade wages, I'm afraid!

pleasedelete

I dont think that anyone will give you a £7.5k loan. I dont think they will give you a £5k loan. The only possible way is a very long term which will have high interest overtime. You will be paying for the car long after it has died a death.

Best option. Find out what the car will realistically sell for now. If it is close to or even less than the loan value sell while you can. Even if you get £1000 less than loan value that is only 2 months car costs.

Then live without a car - £80 petrol suggests you dont use it much. get a bike? or get a cheap less than £1k banger.

You will have to sell it anyway when the next finance payment is due as you wont be able to afford to refinance it.

You also cant really afford the flat. If interest rates go up you will be stuffed. Your parents haven't really done you a favour unless it is a very rising market- it is a millstone for you really.There was a good reason that you couldnt get a mortgage in your own right. Is the flat on a fixed term interest deal? What happens if rates go up?

Looking back on your threads you were advised all of this 3 yeas ago- about both the car and the flat.

sell the car or sell the flat