Help - need to tell husband about our debt!

savingmummy

vix1977 wrote: »

Savingmummy - I like the idea of pizza movie night, will have to try that! also like the meal plan idea, that will stop us buying extra cos we fancy it!!! We normally go shopping for a few things and end up paying £100 or more (which ends up on the credit card!!)


Thanks for all your tips! I am so freaked out about it all I don't know how much longer I can keep up the charade of everything being ok!

Its horrible to suddenly stop things and make changes but it works AND once you in a `better place` you can add things back as and if you can afford too!


If you get time look in my diary on the very first page, I made a long post on what I did to help me.


ALSO visit the oldstyle board on here, lots of great tips and recipes for meal plans x

purdyoaten

getmore4less wrote: »

That SOA format does not give the picture needed use this one.

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

the debt section is the important one min payments and APR

Absolutely but, stripping out -

Income £3520

Mortgage, debt repayments and childcare - £2850

Does not leave a lot of room for cutbacks elsewhere.

marliepanda

It sounds awful but the house is clearly way above your affordability.

Is there any way of downsizing, moving to a cheaper area?

How much equity have you got in there?

Keeping_Motivated

With a monthly income of £2800 how do you get £640 in benefits? That seems like a lot of extra help on that income?

We don't receive a penny except the £80 child allowance that everyone gets?

dylan2011

From what the OP has said so far, I think the Benefits may be down to the childcare aspect of tax credits? May be wrong tho.
The big one for me stands out at the grocery shopping. We are 2 adults and 2 young children and ours is 200-250 a month at the moment and trying to cut it further. We eat really well, lots of fruit, veg, meat etc. and my partner can eat for England. lol. We also buy nappies with that budget as well as all cleaning and other household items.
But it still won't balance the budget. Your mortgage does seem really high for such a small family as well. Sorry to say it but it is eating up a HUGE proportion of your income.
Obv the childcare at nearly a 1/3 of income as well is high but I understand that this is expensive in general (altho yours does seem very high). Have you looked for any childminders in the area that are registered to recieve the 15 hours a week benefit as some childminders can do this.
There are all the little bits like takeaway, pub etc as well but to be honest they don't mount up to anywhere near enough to pay the debts etc.
I think personally you need a full financial overhaul, looking at everything in detail because at the moment even a DMP looks like you won't be able to manage as your expenses without the debts are higher than your income. x

whattodo1967

Hi Vix as you will see from my original posts I had to tell my OH about our debts and which were similar to yours. The week or so leading up to telling him was terrible could not sleep eat function! But once I did he was upset but then he said we can sort together
We then contacted stepchange and we are now nearly 2 years in and have reduced our debt to around £32k which I think is a great achievement still away to go but we are getting there.


Cant say its been easier sometimes hard, but the best thing we have ever done.
Good luck on journey

NHS_worker_bee

vix1977 wrote: »

Do you know where I can get the phone line cheaper, this is only for line rental with Sky as we use our mobiles for calls. I am looking at reducing my mobile and will be telling the other half to do his too.

Homephone: We use BT and pay upfront for the line rental saver, this costs £141/year but saves us from line rental price hikes and makes the monthly bill smaller too.

Mobiles: If you don't want to switch to PAYG, call your provider (as soon as your contract is up) and switch to sim-only. Sim-only is so much cheaper than an expensive contract where you are paying for the handset. You can keep your existing handsets too.

Best wishes

datlex

vix1977 wrote: »

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Income from Employment (after tax). . 1,280.00
Income from Self Employment (before tax). . 1,600.00
Benefits (Inc. Child Benefit/Tax Credits & Income Support) 640.00
Monthly Expense Details
In Your Home
Mobile phones . . . . . . . . . 60.00 (I noticed you said could be cheaper- mine is £11.05 a month 900mins unlimited texts plus 500mb data)
TV licence. . . . . . . . . . . 12.12
Internet. . . . . . . . . ......7.50
Home phone. . . . . . . . ......15.40
(I'm guessing your home phone and internet are via sky? Look up prices from alternatives online then ring sky and get them to match them- the disconnections dept are best for this)
Cleaning products/Cleaner . . . 5.00 (products or cleaner?- if products check if you can get them cheaper- if cleaner cancel)
Electricity . . . . . . . . . 31.00
Gas . . . . . . . . . . . 31.00
Water . . . . . . . . . 55.00 (are you on a meter? £55 seems high- if you go to the energy saving trust website and look at this http://www.energysavingtrust.org.uk/Heating-and-hot-water/Saving-money-on-water I think you'll find helpful. It shows how using less water not only means less money but also gives you more time :-))
Council tax . . . . . . . . . 129.00 (is this over 10 months or 12?- If over 10 then ask if can be over 12- will be same over the year but less each month)
Overdraft cost................30.00 (authorised or unauthorised overdraft?)
Home insurance. . . . . . . . . . 35.00
Mortgage/Rent . . . . . . . . . 1,023.00
Mortgage life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Mortgage payment protection . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 (might be worth considering)

Food and household shopping . . . 500.00 (seems high how many of you- I'm guessing at least two children)
Drinks for home . . . . . . . . . 60.00 (what do you drink- can you get it else where? Getting an optic for spirits for example can make them last longer and save you money. For example a bottle of Malibu is currently £13 a litre whereas Kokomo is only £7.43 a litre- you can make quite large savings here if you are not brand proud)
Motoring & Public Transport
Petrol/Diesel . . . . . . . . . 200.00
Car tax . . . . . . . . . 23.33
Car insurance . . . . . . . . . 35.00
Car maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Rail/Buses/Taxis.. . . . . . . . . 10.00 (which is this for?)
Breakdown cover . . . . . . . . . 0.00 (do you have this included in your car insurance?)
Debt Repayments
Credit card repayments ...500.00
Personal loan repayments. . . . . . . . . 435.00
Savings & Investments
Pension payments. . . . . . . . . 0.00 (have you opted out or is the company not yet due to enrol?)

Family
Pet food. . . . . . . . . 15.00 (can you save here?)
School trips . . . . . . . . . 5.00
Nappies/Baby extras . . . . . . . . . 15.00
Childcare/Playgroups. . . . . . . . . 850.00 (are you getting the childcare vouchers- this is a huge amount of money http://www.childcarevouchers.co.uk/Parents/HowItWorks/Pages/default.aspx
Pet insurance . . . . . . . . . 35.00
Entertainment
Satellite/Digital TV. . . . . . . . . 23.00 (make a list of what you watch and see where else you can get it- eg freeview ondemand tv, Netflix etc then if you can get it all elsewhere cheaper cancel this- you'll still get the free things via the dish)
Family days out . . . . . . . . . 50.00 (trip to park/beach is much cheaper than this)
Eating out . . . . . . . . . 43.33 (this can be cut back)
Clothes, Health & Beauty
Optical bills . . . . . . . . . 21.00
Haircuts. . . . . . . . . 20.00
Dentistry 5.00
New children's clothes. . . . . . . . . 10.00
Birthdays . . . . . . . . . 10.00
Christmas . . . . . . . . . 20.00
Tax & NI Provisions (self-employed on . . . . . . . . . 100.00
(are you self employed or a limited company? Might be worth investigating if you could be better off as a limited company)

Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,520.00

Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,444.69

It seems to me that you are hardly covering your expenses at the moment let alone your debts. Even with cut backs I don't think you'll raise the money you need. It seems to me that the childcare plus travel costs take up most of one of the salaries which seems mad to me. Surely this could be reduced?
I hope you get things sorted soon must be a big worry.


I think you need to talk to the debt providers.

Sazzie23

Its going to be a tough call, even if you did go to DMP?

Do you have any equity in the house, whilst I'm defo not a fan of consolidation loans, clearing some of the debt that way could be an option, but only if you get the repayments down significantly. And only then if you actually changed your ways and lived to means so your debt didn't keep increasing.
My best advice would be to get clarity - what you owe, what it costs, what you repay, what you spend. Spreadsheets are motivational, I look forward to getting my bills so I can see the totals going down...too much time spent on MSE (lol).

Cutbacks, fuel - try to walk more, those short trips are fuel guzzlers.
Phones, - see previous advice
Groceries - try some of the thread challenges to see what you save by menu planning and budgeting.
Sell stuff - old Cd's, car boot toys and kids clothes or ebay , anything left to you ?

Childcare - more drastic, could you change your hours so that you don't need so much paid childcare, work later or start earlier ? Any chance of unpaid relative help, even if only for one day a week, say a Friday afternoon might help you out, although I get that the childminder charges even if child not there might still be a problem.

Increasing income = may only be worth it if you don't lose equivalent in benefits.

Eating out - cut it down to once a month for takeaway, use clubcard vouchers or ask for tokens for presents?

I saw optical costs are £21 per month, have you tried glasses direct...or similar, you do need your prescription though. I think if you are a vdu user your firm has to pay something towards glasses...have you looked into this...I know its a small amount, but the key to this type of problem is that the small savings can add up.

Haircuts, local colleges & training salons often do cut priced sessions, save the full priced ones for special occasions.

If you do decide to go DMP, make sure its a fee free provider, check out the DMP support thread before you decide if its for you.

Good luck telling OH but having a plan often makes the news less scary and therefore more palatable. Its not just your debt, don't let it become just your problem.

getmore4less

purdyoaten wrote: »

Absolutely but, stripping out -

Income £3520

Mortgage, debt repayments and childcare - £2850

Does not leave a lot of room for cutbacks elsewhere.

The issue is Debt repayments are just a number no indication of what they are how big rates etc. critical to understanding the options of what you do with them.

Are any of the debts business related?

Mortgage but no idea of house value and other assets not identified. clearly important as you canot consider some options without this information

The other thing is that the income is from self employment and child related care costs are enormous for the amount of income.

It may be that an adjustment could retain some of the income and remove much of the childcare. or replace some of the income with benefits.

eg if you assume a 40hr working week £1280pm the hourly rate is £7.38

takeaway the child care £850 and the rate is £2.48ph

They really need to review there current working choices

I also think there self employed money management may be mixed in it with the personal, as there is a tax/NI saving and fuel seems high when you would have all work related costs as part of the business.