Statement of Affairs

Spirit_2

The family finances are out of control. We are going on holiday in August and I cannot face spending money we do not have

Outgoings
Home+Mortgage1912
Insurance 120
Food/Groceries 666
Cars 484
Loan repayments373
Savings & Investments 671
Tennis subs 28
University 750
Hair & Nails 65
Total £5068

Income
Salary 4000

Salary OH 2150
Total £6150

Debts today
Capital One 0% 2402
M&S 0% till Jan 08 5445
Tesco loan 17140
Standard Life 26000
Overdrafts11500
Lloyds TSB CC OH 832
Amex OH 206
Barclaycard 751
Total £64276

Sea78

Hi

Well done for posting your SOA - scarey isn't it? Firstly, it'd be helpful to know how many are in your family? I'll have a go at going through your SOA, but I think you'll need to include a little more detail.

Outgoings
Home+Mortgage1912
Insurance 120 Is this house? Car? Life? It's VERY high - have you investigated cheaper options?
Food/Groceries 666 This is really high - for a family of 4 (with one in nappies and baby milk) I can spend about £250 for high quality, good food. It just takes a meal plan and a bit of effort, but the results can be dramatic. Others manage to do it fro MUCH less.
Cars 484What does this cover? Car payments? Ins? Petrol? Mot? etc. Could you break it down a little please.
Loan repayments373Is this what is outlined below?
Savings & Investments 671Sorry, but if you can't meet your outgoings and have the large level of debt, this is an excessive amount to be saving. You could make a huge difference to the level of debt and the time it's going to take you to pay it off. In the very short term, it'd more than cover the issue about holiday spending money.
Tennis subs 28
University 750
Hair & Nails 65I don't think I need to say about this - if you can not cover basic outgoings, you can't afford this much on hair and nails. Is there anyway you can cut back here?
Total £5068

Income
Salary 4000

Salary OH 2150
Total £6150

Debts today
Capital One 0% 2402 Need minimum payments for each debt and also the interest rate for each one too to see how much you have to pay each month on debt.
M&S 0% till Jan 08 5445
Tesco loan 17140
Standard Life 26000
Overdrafts11500
Lloyds TSB CC OH 832
Amex OH 206
Barclaycard 751
Total £64276


Also, there is no mention of presents, holiday savings, clothes, etc.

How much have you got in savings? Could this go towards paying off some of the more expensive debt?

Sea xx

Karmacat

Hi Spirit

Welcome to mse! I'm glad you're starting your own thread - I've just been looking at your other posts, and it sounds like, altho you've taken some action already, *this* is your real LBM, starting your own thread, and really focussing, as you say, not being able to bear to spend money you don't have any more. Good for you.

So. This is a lot of debt, of course it is. You've already mentioned, elsewhere, about getting things onto better interest rates. I think you can see the results below, you've got a couple of 0% rates there, well done. Is there anything that can be done about the rest? Are the loans at fixed rates?

Outgoings
Home+Mortgage1912 what does that mean? Mortgage plus repayment vehicle? Is it on he best rate?
Insurance 120 A month? This seems very, very high. I pay perhaps a third more than that for the whole year, and I live in one of the most expensive towns in the country for house prices.
Food/Groceries 666 Sorry, again, this is huge: how many of you are there? With the level of debt you've got, and spending more than you earn, some cutbacks are inevitable. I know it can't all be done at once, but if you aim to reduce this amount by 10% a month, you'll get down somewhere feasible soon.
Cars 484 Cars plural. How many? Are they completely essential? They're certainly convenient, I know, but are they essential? Have a think about it, deeply.
Loan repayments373 Are these for the amounts listed below? Does it include the credit cards and all debts?
Savings & Investments 671 Ummmm, when you're this much in debt, why are you putting by this amount of money for savings? What you're doing, effectively, is paying out high interest and getting back low interest. Much better to put some of these savings toward paying off some of the debt, IMHO.
Tennis subs 28 I know its not a huge amount of money, but its not essential, and everything has to be up for grabs. It may well have to go.
University 750 What does this mean? Who goes to university? A son or daughter? Can this amount be negotiated downwards, or does it include fees? Can't assess what might help without info, sorry.
Hair & Nails 65 As a monthly figure, with this amount of debt and being income negative, that can't go on, I wouldn't think. I know you may need to look good for your job, but I've seen talk of DIY nail kits, for instance, that save a fortune.


Total £5068

Income
Salary 4000

Salary OH 2150
Total £6150I'm presuming this figure is net, because otherwise you also need to allow for tax and NI.....

Debts today
Capital One 0% 2402
M&S 0% till Jan 08 5445
Tesco loan 17140
Standard Life 26000
Overdrafts11500
Lloyds TSB CC OH 832
Amex OH 206
Barclaycard 751
Total £64276

There are fixable things in here, and I think you'll certainly be able to get things under control. I see Sea has already made some of the same comments (I was previewing to check the code!), but it always helps to have more feedback, so off it goes to you. Hope it helps.

hypno06

Hi there, yes it is a lot of debt but lots of us have been there, and we are slowly getting through, so stick with it and you will soon be able to go on holidays stress free.

Right, apart from the fab stuff from Sea and Karmacat, I would suggest two things:

- a spending diary so you can see exactly what you are spending, what you are wasting, and what can be cut out without actually being missed!

- put your debts, aprs and payments etc into the snowball calculator at www.whatsthecost.com and get an initial debt free date. Now start playing around with it -if you reduce the amount you put in investments and chuck it at the debt instead, how much does the debt free date come forward by? Now see how much difference would be made if you reduced your groceries by £200 a month....now see what would happen if you cashed in one or more savings/investment plans?

The snowball will act as a wonderful motivator and you can soon see how realistic it is to become debt free relatively quickly with a little bit of effort.

Oh and third bit of advice is to keep posting. The support here is amazing and I know that I would not have reduced my debt by so much without these boards.

Good luck x

poppyjay

hi have you tried ebaying and carbooting things you dont need good luck

taxi73

Hi there...would it be possible to break down the insurance costs...household costs and investment costs as these are where you can make big savings...I know it's a pain to write them all down individually but it will give a clearer picture where cuts can be made....just changing suppliers can really help..

Spirit_2

Thankyou everyone for being interested. I have found it hard to go back to the detail. The debt and spending looks quite mad - thinking about why it is like this has meant turning over old memories. We are a family of 3. One daughter at University; a dog; a cat;chickens and a rabbit. Horse on loan (just ending - not included in SOA) ; pony out on loan. We live 3 miles form the nearest shop; there is no public transport. I work long hours 30 miles from home and my husband 12 miles (in the opposite direction). Both employed full time.

Home+Mortgage1912 - Repayment Mortgage 1225 Nationwide fixed for 3 years @ 4.79%. 8 years left to run. Council tax 178. BT Phone & Broad band 75. Oil 75. Electricity 62. House insurance 68.

Insurance 120 - I used the MSE budget categories so house insuranc eis not in this - see above. Standard Life Endowment 47 matures May 2008 . Life assurance 58. Dog insurance 15.

Cars - 4 in total. Have recently almost halved our insurance bills. Old sports car we have had for 24 years - only on road in summer. Very sentimental hung on to through thick and thin. OH 10 year old 4x4 - Deisel 35wk; 7 year old 998cc hatchback for me petrol 35wk; hatchback for Daughter (we pay her insurance & tax).

Loans - Tesco 223; Standard Life (interest) 150. SL will be repaid on endowment maturity May 2008. No cc repayments in SOA.

Savings & Investments - OH (old Pension provider - I'm not sure why) 36. Share saving scheme 100. Interest only mortgage on flat for elderly relative 535 (its complicated).

Tennis - OH social outlet.

University - For Daughter - Fees 3000 pa; Accomm 3600 pa; 200 month towards expenses.

Hair and nails - alternate month haircuts for OH and I. Nails - a treat (in the last 3 months).

Biggest debts (Standard Life & Tesco) taken on during 2 years of OH unemployment.

I feel worn out now and will finish off the cc analysis when normal energy resumes.

Sea78

Spirit- it is really hard and well done for sharing so much. I'll come back to the new figures, but honestly, you can make huge savings easily and just keep posting You can do this I promise.:)

petetidball

Has your daughter applied for a student loan? Even with your incomes being above the threshold for anything major, she should get the minimum which works out around £200 a month during term time. This could free up your £200 that she's getting. If you've got to tighten your belts, she'll have to as well.

Phone and broadband seem high, but if you're in an out of the way area, it may be hard to change.

Stick with it. It seems overwhelming at first, but once you have an idea of where you can make savings and see a light at the end of the tunmnel, it gets better. Honest!!:o

slowlyfading

what's the £200 a month you're giving your daughter for expenses? Does she get a loan? if she does - there's no way she needs the £200 from you as well. I'm at university and get a loan and i work in the holidays - its enough well done for posting your SOA though, its a scary step! x

Spirit_2

Thankyou again, for listening. Daughter has applied for loans - and they in joint savings. The funny bit is we do not want her to get into debt but have tried to link effort/reward. The deal is - if she studies the savings will repay the loans, if she does not, it is mum and dad's and she has the debt.

I will do the snowball and look at the food. What is a sensible household budget for 3 adults in a 3 bed semi-detached cottage?
Food
Oil (cook, hot water, heat)
Electricity
Telephone/Broadband

Credit Cards - M&S & More 0% until Jan 2008 5445, minimum per month 135. This also has a payment protection fee of 40 per month. Should I cancel this protection?

Capital One - 2402 0% (cannot find when this ends -think it is soon) minimum 78 per month. Small interest accruing 4 - on a purchase in the balance at 1.24% per month .

Lloyds - 832 was a platinum but has mysteriously changed to an airmiles duo card this month. No sign on the internet statement of minimum payment or interest rate, just balance transfer! OH abroad (work) so I will have to ask him when he phones. Usually try to pay off in full.

Barclaycard - 751, of which 434 is due by 3rd, minimum is 9 per month and interest rate is 19.9%. Since reading mse I always pay this in full as the interest rate is horrendous and acts as a deterent. Used for presents/one offs/work expenses (can reclaim not usually much but 270 to claim in August to pay by Sept 3rd) (goal - would like to be able to shop out of current account).

Amex - OH uses for one offs/fuel - always paid in full, charge card not CC.