We need to sort our finances out!

Kimie

Hi all

I have been lurking on here for a little while trying to face up to the fact that me and DP really need to do as the title says and sort our finances out! We are expecting our first baby in just under 8 weeks and I can't believe we burried our heads in the sand and just let the months creep by with things getting worse and worse... so here I am!

I'm hoping that by making it 'public' just how much of a mess we are in I will be spurred on to get things in order... after all I can lie to myself but I promise not to lie on here and face the truth.

Here is our (sorry!) SOA:

Income:
DP's wages (before tax): £1400.00
My wages (before tax): £1520.83

I am about to go on maternity leave (8th August) so for the first 6 weeks I will get 90% of my salary. After that I go onto SMP of £112.75 a week.

Automatically taken from my wages each month: £46.66 for intrest free travel loan taken out from work. Payments end in September

Outgoings:
Rent: £975 monthly (included - council tax and water)
Electricity: £35.00 (approx a month)
Gas: £46.00 (approx a month)
Telephone: £10.50 (a month but paid every three months by DD)
Internet: £36.00 (monthly and includes Sky)
Mobile phone: £70.00 (combined bill for both me and DP)
Food: £250 :eek: (approx a month includes occasional take-a-ways)
TV Licence: £19.35 (monthly by DD)
Public transport: £94 (monthly combined total for me and DP on top of what I pay out of my wages already)

My Debts:
Student loan - not sure how much I owe on this anymore as I've been chasing a statement for ages but in total I didn't take out more than £9k and I started earning enough to make payments in January 2005.

Credit card 1: £1469.46
Credit card 2: £613.21 (Over limit and 36.00 payment to make immediatly - with collection agency)

Loan payment: £777.77 outstanding. I pay £70.70 each month to my mum as she took the loan out for me. I cannot reduce these payments as it's what she pays each month.

Overdraft: Stands at £1850.00 and limit is reached each month. £1500 of it is interest free as it is a graduate account.

Old Council Tax: £284.00 (Need to pay within 7 days of 21/07/07 to avoid court action and a further £80 on top)


DP's Debts:
Personal Loan: £7455.98 outstanding. Monthly payments of £150.48 - He's been paying it back for a while but is now struggling to make the payments and has missed the last two months payments. It cannot be paid off early.

Credit card: £3598.39 currently £1398.39 over the limit :eek:

Overdraft: Limit is usually £250. Currently it is £600 overdrawn and we don't know how!


(I have seperated the debts just so it's clearer in my mind but they are OUR debts to takle together!)

I know we are not in the worst situation but it feels pretty desperate and causes a lot of tension... we both just want to be debt free (which seems impossible) so we can do the best by our child... after all this is our mess and shouldn't affect them but it will.

DP has contacted someone through his works employee assistance who is going to try and help us out of this sorry mess but I need somewhere else to keep track of it and act as 'the push' to get things sorted!

My aim for the next few weeks is to adopt the Debt-Free Wannabe signature 'Proud to be dealing with my debts'.... at the moment I am too ashamed of myself to be proud of anything money related.

If you read this far thank you it is much appreciated!

Lazy_Runner

Hi Kimie

Welcome to MSE! Well done on taking your head out of the sand.

To take things further:

You need to find out the exact amounts you owe on the cards and the APR's that they are charging you.

Also can you tell us how much pay you get after taxes/deductions?

Will help with the budgeting.

Midnight_Sky_2

Hi and well done for posting your SOA - starting your own diary is a very good idea as it will help keep you on track and you'll get loads of support from everyone on this forum.

As for your SOA - the first thing that springs to mind is that your shopping can be reduced drastically - pop over to the Old Style board for some excellent tips on how to reduce your shopping bill.

It would help if you could work out the interest rates on each of you loans and credit cards - then contact all of your lenders and ask them to reduce the rate. It might sound cheeky, but it does work. Tell them your situation has changed and you cannot afford to keep paying them the amount they are asking for...you can only try and you never know it might save you quite a bit over the course of the month...

Hope this helps and keep posting to let us know how you're getting on.

Midnight

sophiesmum_2

Hi and welcome to the board.
Having a baby really makes you take stock of what mess you are in. The good thing is that you have a few years before your debts will have a noticeable effect on your child. Hopefully by the time your child is noticing what is happening around them you will be debt free and in a position to provide them with the things they want/need.Babies don't care what toys they have etc or what clothes they wear.
Looking at your soa I would say that your food budget could definately be cut to free up some money, knock the take aways in the head too.You could probably free enough from this to pay DP's loan if you tried.

DP's credit card must be clocking up terrible charges if it is so over the limit:eek: I would try and get this down asap.

Not really sure of your takehome pay to work things out with, any chance of posting that?

Will any of the outgoings eg travel reduce when you are on maternity leave? which could free up some money, although appreciate income will also drop.
It would give you plenty of time for batch cooking etc though, this can be really handy when you have a baby to see to, you can just whip something out the freezer ready for tea.

Hopefully more people will be along soon to help you
Good luck
sophiesmum

Kimie

Thank you both for the replies!

Right by the end of this week I will know the interest rates for each of our cards and loans and will be cheaky and ask the banks to lower them! I didn't realise you could ask them to do things like that.... in fact to be honest I avoid talking to my bank at all in case they chase me for money!

I know our food bill is rediculous... and I have no idea where all the money (or food for that matter) goes! I will pop over to the Old Style board and see what I can pick up!

As for our wages after tax... I think mine works out at about £1200 and DP about £1100 but as he gets bonus' and I've done a bit of overtime here and there I never know the 'real' amount!

hypno06

Hello and welcome to DFW! You have taken the first step and you are now on your way to being sorted - that is something to be proud of in itself!

As said above, you do need to find out the APRs and balances for everything. Also find out how the limits have been exceeded - check your statements so you know for certain that you have not been scammed anywhere.

Once you have your APRs and balances, go to the snowball calculator on www.whatsthecost.com - this will give you a provisional debt free date and is a starting point for you to focus on.

Start keeping a spending diary - put every single penny that you spend over the next few months in there. It really concentrates your mind on what you are doing.

sign up to the various survey sites, quidco, pigsback.com etc etc - sign up for mystery shopping - every little bit helps towards christmas and birthday presents!

And be proud!

Kimie

Sophiesmum - thank you so much for reassuring me that a baby isn't going to realise what's going on for a few years! This is the thing we have been worrying about more than anything. We have been quite good when it comes to the baby things... we have used ebay quite alot for baby clothing bundles and also vouchers we get from work. There are a few things we couldn't resist but we haven't gone overboard. Also I have made a list of stuff we need and been quite harsh with cutting out things we don't need... ie. we don't need a baby bath... we have a bath already! Same with a baby monitor... I am assuming that a baby will made itself heard in a two bed flat!

We have been quite lucky that we have had most things donated or bought for us too so the initial expence hasn't been that mush of a shock which is why I think we have been able to burry our heads for this long!

The travel expense will reduce drastically when I go on maternity leave. My interest free loan payments from work will stop and I will be just using my pay as you go oyster card for the occasional trips I make. Will also be making full use of the busses as they are cheaper than tubes. I have also started claiming back any fares for delayed tube journeys... I use to accept that I was mre than 15 mins late but recently I have been claiming the odd £3 here and there (only when I have been delayed!) and hopefully this will add up to pay some of DP's travel each month!

As for the food... I looked in the cupboards and fridge last night and I know where the money goes - on food we never eat! Next time we go shopping I think I will make a list of what we already have... some meal ideas and then stuff we need.

Hypno - A spending diary is a great idea! Will make sure DP does one too as we are both terrible for just spending a couple of pounds here and there and it all adds up.

Thank you so much for the replies... after a good cry last night I am feeling better about things - because we are facing them and not hiding anymore!

Still not proud though!

david_hellier

Hi and welcome.

According to my figures you both have £214.74 per week to spend on food, clothes, baby and anything else. I suggest you write this amount in a little book on a Monday (a spending diary) and keep a note of what you spend by deducting and keeping a balance. Carry forward any amount to the next Monday. Set up standing orders for the fixed amounts to the CCs; do not make the minimum payments. In the figures is an amount for the OD payoff, so ignore your bank balance and go by your book. TVL DD seems too high?

Do not use credit cards for any more purchases, use a debit card, but keep a note in your book. Your income has been adjusted to 90% in the calcs. Good luck, the figures:

If you would like the figures in excel format, send me a message.

incomeweeklymonthlyself 1368.75partner 1400.00 total0.002768.75divide by 4.33 £ 638.95 £ 638.95 total weekly incomespendweeklymonthlyrent/mortgage 975.00council tax 0.00elec 35.00gas 46.00water 0.00secured loans 0.00TV licence 19.35fines 0.00phone 10.50internet 36.00mobile 70.00transport 94.00cc1 73.45cc2 28.00loan 70.70od payoff 50.00dp loan 150.48dp cc 179.75 total0.001838.23divide by 4.33 £ 424.21 £ 424.21 total weekly spendStart= income - spend = £ 214.74 per week

Kimie

David - thank you for looking at all that and working out a figure. I wouldn't have known where to start with all that.

When it's written down as 'you have £214.74 a week to spend' I think how could we ever spend that in a week but obviously we do and have been regulary spending more!

DP is going to hate the idea of a spending diary! Means he's going to have to own up to all those little spends.... but so am I so fairs fair!

My credit card 2 has already been cut up... there is no way I can use it to buy anything including online (trust me I've tried!).

Credit card 1 is my weekness... the loan my mum took out for me originally paid it off and then I stupidly went out and reached the limit on it again. I can't believe I was so silly! Technically it is credit card number 2 as I transfered the ballence to a credit card that offered intrest free transfers for 6 months. I have looked into transfering it again to another interest free card but no one wants to touch me with a barge pole. My credit rating is shot to pieces!

As for the TVL - I only have to pay this for 6 months I think not the whole year. I may look into paying the rest off in one go so then it is one less worry. The threat of a £1000 fine is enough to make sure this is paid on time!

Kimie

Well I never managed to find out the APR's on our cards... had a hectic two days at work and ended up having to take a friend to A&E so my good intentions went out the window.

My Credit Card 2 debt has been sent to a collections agency (Mercers) and they want £36.00 straight away which isn't too bad. I can pay that next Friday on payday and it will reach them in plenty of time.

I have £284.00 to pay on my oold council tax bill which I thought had been paid by our old landlord as we never got our deposits back and this was one of the reasons. They need payment within 7 days (letter dated 16/07 but received 21/07) or will take court action and add £80 costs on top. I am going to call them Monday (not open at the weekend) and explain I can't afford to pay all in one go but will they accept a payment plan.

Once it's paid off I'm going after our old landlord for our deposits... the little weasle isn't going to get away with it! :mad:

So although I feel we have taken a step forward this week there seems to be one thing after another dragging us back!

Kimie

Phoned the Council Tax Dept today and explained the situation and agreed a payment plan on the old CT debt:

August 6th - Pay £84.24
September 6th - Pay £100
October 6th - Pay £100

Any problems meeting these payments and I need to phone back.

I know it's a tiny debt compared to the others but this means that court action and fines will be avoided. Also one debt not mentioned on our debt management information sent off last week as I only found out about it on Saturday.