It's time to change things

tea_n_toast

I posted earlier on the OS thread just about wanting to get on top of things and have a bit of financial security under our belts for the kids etc.

Things are so bad at the moment, the way we are living is terrible and I just don't know how to get out of this cycle. A few members recommend writing every spend down so I really am going to try hard with this.

At the moment my partner earns just over £26k before tax and I'm a stay at home mum. Our bills just feel astronomical and I'm scared that things will never get any better. Bills seem to just get higher and we take on more DD thinking oh that's not much but then when you think about it it all really adds up. I feel sick even thinking about our bills and petrol costs compared with his earnings.

We have some debt as well which I'm sort of burying my head in the sand about because I feel like I can't even think about it just now but I know things will only get worse if I continue this way. It's council debt and some has gone to DC agencies and I'm just waiting for more letters to say that the rest has.

Could really just give up right now, I'm 22 and my finances are just shocking.

StrugglingYouth

Write it all down. Once its on paper you will know exactly where you stand. The thought of the unknown is more scary than having a figure.

The figure will also allow you to work out how much you have paid and do a sort of countdown. This will hopefully keep you motivated as the amount reduces.

No amount is insurmountable! People on this forum will help you, by making suggestions and im fairly sure someone out there has beaten a debt amount as high if not higher than yours.

Work out exactly how much you owe.
Complete a Statement of Affairs (Here:http://www.stoozing.com/calculator/soa.php

Once this has been done people here will help you by suggesting things you may not have considered in regard to saving money.

Also keep a spending diary, small notebook wherever you go, document every spend however small as they do add up.

You have taken the first step it seems by realising you need to do something about it.

Tomorrow is another day. You can do this. A little positivity goes a long way!

tea_n_toast

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\outl0\strokewidth0 \strokec2 Statement of Affairs and Personal Balance Sheet\
\
Household Information\
Number of adults in household........... 2\
Number of children in household......... 2\
Number of cars owned.................... 2\
\
Monthly Income Details\
Monthly income after tax................ 0\
Partners monthly income after tax....... 1200\
Benefits................................ 462\
Other income............................ 0\
Total monthly income.................... 1662\
\
Monthly Expense Details\
Mortgage................................ 0\
Secured/HP loan repayments.............. 203\
Rent.................................... 430\
Management charge (leasehold property).. 0\
Council tax............................. 196\
Electricity............................. 110\
Gas..................................... 0\
Oil..................................... 0\
Water rates............................. 0\
Telephone (land line)................... 20\
Mobile phone............................ 50\
TV Licence.............................. 13\
Satellite/Cable TV...................... 21.5\
Internet Services....................... 0\
Groceries etc. ......................... 280\
Clothing................................ 0\
Petrol/diesel........................... 320\
Road tax................................ 0\
Car Insurance........................... 63\
Car maintenance (including MOT)......... 0\
Car parking............................. 0\
Other travel............................ 0\
Childcare/nursery....................... 14\
Other child related expenses............ 0\
Medical (prescriptions, dentist etc).... 0\
Pet insurance/vet bills................. 0\
Buildings insurance..................... 0\
Contents insurance...................... 0\
Life assurance ......................... 0\
Other insurance......................... 0\
Presents (birthday, christmas etc)...... 0\
Haircuts................................ 0\
Entertainment........................... 160\
Holiday................................. 0\
Emergency fund.......................... 0\
Total monthly expenses.................. 1880.5\
\
\
Assets\
Cash.................................... 0\
House value (Gross)..................... 0\
Shares and bonds........................ 0\
Car(s).................................. 0\
Other assets............................ 0\
Total Assets............................ 0\
\
\
Secured & HP Debts\
Description....................Debt......Monthly...APR\
Mortgage...................... 0........(0)........0\
Hire Purchase (HP) debt ...... 11500....(203)......0\
Total secured & HP debts...... 11500.....-.........- \
\
Unsecured Debts\
Description....................Debt......Monthly...APR\
Council........................600.......30........0\
Total unsecured debts..........600.......30........- \
\
\
Monthly Budget Summary\
Total monthly income.................... 1,662\
Expenses (including HP & secured debts). 1,880.5\
Available for debt repayments........... -218.5\
Monthly UNsecured debt repayments....... 30\
Amount short for making debt repayments. -248.5\
\
Personal Balance Sheet Summary\
Total assets (things you own)........... 0\
Total HP & Secured debt................. -11,500\
Total Unsecured debt.................... -600\
Net Assets.............................. -12,100\
\





*gulp* I have no idea if I've done it properly as that's my first time - I don't know the interest on the car payment.

Thanks for the reply and especially the link! Very handy site.

MrsSave

Hi, you're in the right place!

I'm no expert, only just starting on this journey myself, but the things that stand out to me on your soa are:
Council tax. This seems extremely high at £196. If it is correct, could you split it over 12 months instead of 10?

Entertainment - This is very high, especially as you are struggling each month. How about dropping this down to £50 for a while?

£63 seems as lot for car insurance? Have you checked different companies to see if you can reduce it. It could be as you are still young, though?

Can you see about reducing your electricity bill?

Petrol seems very high. Does your partner have a long commute to work? Any chance of moving nearer to his place of work?

Mobile phones - how long do you have left on your contracts? How about a sim only for around £10 a month each?

You really should be putting something into an emergency fund each month, whatever you can afford.

You could probably knock around £50 off your grocery shopping. Our budget is £160 a month for 2 adults and 1 toddler.

Also, are you sure your partner's income after tax is correct? I only ask because I was earning around £27kpa before tax when I worked full time and was bringing home around £1600 a month?

Hope this helps x

MrsSave

Also (I'm going to sound mean now), if you are short every month, can you really afford sky?

StrugglingYouth

I have had a brief look over the SOA:

You're spending nearly £250 more each month than you bring in so things need to change.

My thoughts:

If your council tax is spread over 10 months at the moment changing it to 12 will save you £32.67/month. You can request they change it at your local council offices.

Do you NEED the paid TV channels? I assume Sky? Bit of a luxury.

Fuel costs are high, possible to car share? Insurance is also but I assume thats down to you being quite young.

You can probably chop a bit off the groceries too, if you batch cook and stick to lists. I always go shopping after I have eaten so I dont impulse buy things. Or do it online and stick to a pre made list.

Unfortunately the £160 a month entertainment is a luxury you can ill afford at the moment. I think this is where most of your sacrifices need to be made.


Things you probably spend money on but arent included:

Medical? Prescriptions, eye tests, dentists?

Emergency fund, you should have something here, even if its a small amount.

Road tax? Are both cars exempt?

Clothes? Not even for your children. I dont know how old they are but surely they grow out of current clothes? The same with haircuts?

Do you know how long is left on the Hire Purchase for the car? You also need to find out the interest rate for this too so the SOA is accurate.

Those are just my thoughts. Others will be along soon to suggest other things.

Welldone for taking the first step! :beer: From here the only way is down for the debt and up for your family!

ShirePiskie

Well done on making the first step by realising you need to do something about your spending - at first glance it does seem that it's spending rather than debt repayments that are crippling you.

My first thought are £160 for entertainment - what is this for? At the moment you can't afford this so it needs to be cut right back/ out altogether. Likewise cable/ satellite is a luxury you can't afford as things stand.

How old are the children in your house? With menu planning and batch cooking you could reduce your grocery bill.

You need contents insurance, and money in the kitty for car repairs/ MOT put aside each month.

Is you council tax over 10 months as spreading it over a year could bring it down.

Nothing for presents? Christmas?

Ideally you need an emergency fund, even if it only starts off being £5 a month put aside.

Can you look at working, perhaps a couple of evenings a week when your partner is at home to look after the children?

So save £160 in entertainment, £50 from the grocery bill, £21.5 for the TV package and that's already £231.5 a month saved... You just need to 'find' another £17 a month and you're breaking even (not taking into account where you need to ADD money to your SOA).

tea_n_toast

Hi everyone thanks for the replies. Will try and reply as well as I can but got two toddlers around my feet fighting over hair clips (give me strength).

In regards to OHs income it could well be less than the £26k, it's an hourly rate and when he started the job and had quite a lot of hours that's what I calculate it up to be but now his hours seem to be dwindling and £300 is a good pay week.

Cars - we have one each, one on HP and one bought outright so the insurance is for both of them so I'm thinking it's not too bad. We'd love to just have the one but we live remotely with poor transport links and only having one really isn't an option ATM, he doesn't work far from home but a I say we aren't in the town so buses aren't an option and his starting time varies every day. I do the nursery run and take the kids out etc with my car. I wouldn't feel comfortable not being able to get to the kids in an emergency either.

Sky, probably a silly mistake! Was in the run up to Xmas, good deal, you get the drift! The contract will run out just before Xmas again and we won't take it out again.

Phones again we are just idiots and don't think things through enough, '£25 a month yep we can pay that' then it's never just £25 and that's you locked in for 2 years.

Entertainment is just takeaways and days out with the kids really. Obv one of the first ports of call to try and cut back!

I'm definitely keen to get on the batch cooking bandwagon, I always try and meal plan but wit the way things are ATM I've not had the money to do a big shop and going in every day is such a recipe for disaster.

Presents/car repairs etc are just things we kind of pay for and then scrimp for the rest of the month when it happens. At the moment there's no organisation to that.

Thank you all again so much for your replies. I really don't want to sound like I'm saying 'can't do this, can't do that' because I see it so much on other forums I use so I've tried to explain where I can the areas I don't feel ATM can be changed eg the car/sky/phones but as I say won't be continuing sky contract and phones but that's a wee bit off.

Will most def be keeping note of spending, cutting down on the likes of takeaways and silly spending in shops as I know that our spending is our real issue.

There was a month awhile ago where I somehow managed to put 1/4 of our bills away every week and I just couldn't believe the difference it made, somehow we DID have money left over even after I'd taken that away. But one bad spell and were back in the overdraft and tomorrow's wage will ever so kindly take us back to zero with nothing to spare.

Thanks again

MrsSave

Have a rummage around your food cupboards and see what you already have. Could you then plan the next week's meals around that and only buy what you need. Use aldi for fruit and veg. We buy value pasta and rice, and then a big bag of potatoes, and that's the carbs sorted for the week. I buy quite a bit of frozen veg, find there is much less waste and we get more of a variety.

MrsSave

Sorry, finished too early!

For protein, we do like our meat, very rare we have a meal without. 500g mince in tesco at the moment is £2. I have recently started to use lentils to bulk out meals so the last time I made a mince dish (chilli it think), the 500g made 8 meals. I try and buy as much chicken as I can yellow labelled. I them portion it ready and freeze.

tea_n_toast

I'm awful with food shopping I have to admit MrsSave. I hope that even getting to grips a little in that department will help greatly. Silly question but how do you keep your potatoes, I am well known for having multiple half finished bags in the cupboard because I use them for one meal, they sprout then just lay there. If I could spend one or two mornings a week on the cooking I think I'd feel great about it.