SOA - am I doing it right?

matthewking26

Hi all, having look at other threads for a while on here I'd like some advice please. It's a long one!

Lightbulb moment was my partner becoming pregnant and realising we'd need to clear the debt to provide for the lil'un. It's all my debt and not hers I should point out.

I built up the debt from earning too little to pay rent etc when i broke up with my ex. I had to pay all rent and bills instead of half and it didn't take long for paying for things on my credit card to spiral, No one to blame but myself. Especially as I bought a car to cheer myself up. Doh! You can hit me if you like!

My partner is moving in soon and we think my entire pay will go on bills/debt reduction and leave her having to pay £50 - £100 towards bills and the rest on food and baby things.

Have just started new job at 17079 per year, will get first full pay at end of this month which I estimate is ;
1423 before tax
1050 after deductions inc £85 pension
As it's over 15,000 I think part of its eligible for student loan repayments but until the end of this month i'm not sure by how much.
I'm on an emergency tax code as won't get the P45 from previous job until September.
So tax may be a bigger chunk until thats sorted.
This month I worked three 3 weeks, was paid 1070 but after tax got 760

So should be

Incoming p/m:
£1050 - my income after tax (estimated)
£400 - partners income, going on maternity leave in September, will be £108 p/w (she's not entitled to working tax credit as she's under 25, how is that fair?)
£68 - my working tax credit (valid until at least next April)

Total 1518


Ougoings:
Rent £525
Council tax £95
Water £16
Mobile/broadband £35 (tied into contract until next Aug)
Credit card: £250 (22% total still owing £6965, interest p/m approx £130 at the mo)
Loan: £196 (7464 owing, fixed payment each month)
Food: £150 (down from £200, aiming to get it lower yet)
Landline £13
Gas and electric £40
Interest on overdraft: £10 (overdraft is £1500 but interest rate is low so used to throw at credit card)
Petrol: £50 - (will be 0 when partner on maternity leave)
Total £1379

Leaves £139 for anything else

Total debt:
Loan 7464
Credit card 6965
overdraft 1500 (reach it every month)
Total: £15,929

I know it's less than other people's debt but tis still a scary amount. I'm ignoring the student loan (£15,000 approx) as that's not going to be a priority until this is sorted.

Have I missed anything out? Anything that could be lowered anywhere? I've been squeezing money for a few months to get the credit card down from £8300 to where it is now. But debt repayment is still £450 p/m. A big chunk! We don't go out anywhere unless it's free, we buy from fruit and veg shop instead of supermarkets as much as possible. I'm able to pay the bills on time when they come in as I budget every month and track my spending. I haven't missed any payments or gone over my overdraft limit yet. (though it's been close at times!)

As things stand it doesn't leave much each month to spend on anything at all. the remainder goes on miscellaneous, tv guides, occasional takeaways etc but I must track it more accurately to see exactly where it goes and if it can be cut back.

A big question is once the baby appears at the end of October, will that take a big bite out of things and push us further into debt? We don't know much about child benefit and working family tax credit but think we'll be entitled to something, anyone know what? I tried looking at the HMRC website but it made my brain leak out of my ears.

At the moment the last loan payment will be November 2010 and the credit card paid off in November 2010 as well. After which no more debt, no more credit cards, just save, save, save.

I'm trying to sell the car which I bought for £2600 a few months ago before the lightbulb moment. A stupid stupid purchase I know!!!

wewillbuyyourcar website have offered me £1428 minus collection fee and I don't know whether to accept that or not. There's a dent in the side of it that may cost a lot to fix which is why their offer is so low. My OH's dad thinks there's no interest because no one wants to buy a damaged car and I should pay to get it fixed then sell it. But I'm working full time so when would I have time to do that?

The cars been on fish4 since Saturday and there's been no genuine interest at all so far. Just canvassers. Do I keep paying £9.99 to put it online for a fortnight at a time, pay £35 to put it on autotrader, hoping to get more interest or get rid for a low price with the website and straight away be able to throw the money at the credit card? If I sold it for £1428 I'd be credit card debt free in Jan 2010 instead of Nov 2010.

i've applied for a 3.9% life of balance goldfish card to transfer some cc debt onto if successful but don't know what the credit limit will be or if they'll say no. I last applied for 1 cards and 2 loans 5 months ago whilst in previous job earning 7500 per year and was rejected for each one. Went to a credit ref agency, my credit looks good, never missed a payment etc, am guessing I was rejected because of my income level at the time.

I've calculated a personal loan would lower my monthly payments but would either finish in 2010 anyway at an afforable level or 2009 at an expensive level each month. I don't think it's worth it as if things get really tight when the baby's born we could always pay lower monthly amounts on the credit card whereas with a loan it's a fixed payment.

And lastly how can I stop getting demoralised as the debt free November 2010 date seems a very very long way away? Sometimes it seems an impossible task! But I've made a significant step I think by getting the credit card down by over £1000 so far.

Can anyone answer any of these questions? Or should I stop whinging?

emzig123

Heya, try www.entitledto.co.uk to check the extra money you will get when the baby is born. Only thing to suggest on your SOA is can you get a credit card with lower APR, even if it's only part of the debt that is accruing less interest it's better than nothing!

learning_to_save

I don't normally post on here so someone who knows a lot more will be along to help some more. I just wanted to say about the emergency tax situation your new employer should give you a P46 to complete to sort your tax out untill you receive your P45 from your old job. You should contact your new employers and ask about it.

Hope this helps LTS

ltm07

Stop whinging ,just kidding. You seem very well organised. Don't know if this is much help but about the miscellaneous,takeaways etc. We stopped buying newspapers & now read them online,saving us over £25 a month. Also with takeaways,this has been our downfall over the years. We still have the odd takeaway but it's very rare. Now we buy the supermarket ones,which work out alot cheaper. Asda are doing Indian meals for 2 for £4 if the offer's still on & 3 large pizzas for £3. I will never pay to have a pizza delivered again,and i certainly never pay to have a pizza delivered on my CC again !! Good luck with the baby. All the best.

RAS

Welcome and we done for starting to reduce you debt. Until you know the outcome of the low rate application, it is hard to tell you what to do but as a start.

matthewking26 wrote: »

Incoming p/m:
£1050 - my income after tax (estimated)
£400 - partners income, going on maternity leave in September, will be £108 p/w (she's not entitled to working tax credit as she's under 25, how is that fair?)
£68 - my working tax credit (valid until at least next April)

Total 1518


Ougoings:
Rent £525
Council tax £95 - if you pay 10 months ask if you can go 12 to help you budget
Water £16
Mobile/broadband £35 (tied into contract until next Aug) - can you reduce this in the mean-time?
Food: £150 (down from £200, aiming to get it lower yet)
Landline £13
Gas and electric £40
Petrol: £50 - (will be 0 when partner on maternity leave)

total £874 (from September)


Leaves £644

Credit card: £250 (22% total still owing £6965, interest p/m approx £130 at the mo)
Loan: £196 (7464 owing, fixed payment each month)
Interest on overdraft: £10 (overdraft is £1500 but interest rate is low so used to throw at credit card)

Leaves £139 for anything else - you need to know exactly what is going in here

join www.freecycle.com for all the baby gear and clothes. Other will recommend various scheme which companies run and that offer free samples.

Also use freecycle if you need to replace whitegoods

Total debt:
Loan 7464
Credit card 6965
overdraft 1500 (reach it every month)
Total: £15,929


As things stand it doesn't leave much each month to spend on anything at all. the remainder goes on miscellaneous, tv guides, occasional takeaways etc but I must track it more accurately to see exactly where it goes and if it can be cut back.

Cut out the TV guides etc, budget for one takeaway or maybe a 2 for 1 deal in a local restaurant every month. This money could make a big hole in your debts.

A big question is once the baby appears at the end of October, will that take a big bite out of things and push us further into debt? We don't know much about child benefit and working family tax credit but think we'll be entitled to something, anyone know what? I tried looking at the HMRC website but it made my brain leak out of my ears. - go to www.entitledto.com and check your situation. they have a calculator.

I'm trying to sell the car which I bought for £2600 a few months ago before the lightbulb moment. A stupid stupid purchase I know!!!

wewillbuyyourcar website have offered me £1428 minus collection fee and I don't know whether to accept that or not. There's a dent in the side of it that may cost a lot to fix which is why their offer is so low. My OH's dad thinks there's no interest because no one wants to buy a damaged car and I should pay to get it fixed then sell it. But I'm working full time so when would I have time to do that?

Can you take a few days leave and sort it out?

matthewking26

Thanks so much for the advice so far. It’s not often I get called organised! But I'd had enough of red reminders for bills and transferring money from credit card account into debit account. Can't keep doing that! Only other way was to organise.
Have emailed HR with:

“I hope you can help.
I started work here in July and when my pay slip came through last week I noticed I'm on an emergency tax code. I've yet to receive a P45 from my previous job as my last day there was July 2nd for which I will be paid at the end of August and presumably I'll receive a P45 after that date.
I've been informed if I fill in a P46 from yourselves this will resolve the emergency tax code until the P45 is available.
Is this correct or will I have to wait for a P45?”

Will see if they reply. Thanks for the suggestion, I had no idea. I’ll have a look on entitledto as well thanks.

We have cut down on takeaways, am trying to cut them out entirely but may try the supermarket method! I do know the shame of paying for a takeaway on a card though! Never again. We never get newspapers, I read them online but OH does like her TV guides/soap guides.

And on the optimistic side I finally posted my childrens book to a literary agent this week after finishing it two years ago whilst unemployed then leaving it in a drawer! Was persuaded to send it by OH the star! So keep all those fingers and toes crossed for me! After all the worst they can say is ‘no’

matthewking26

Council tax £95 - if you pay 10 months ask if you can go 12 to help you budget
Ooh, didn’t know about this, will ask the council

Mobile/broadband £35 (tied into contract until next Aug) - can you reduce this in the mean-time?
Not sure, as the offer was £35 unlimited calls to mobiles and landlines with free broadband. The catch was free broadband only with minimum £35 call plan. Broadband is important for my work. will ring and ask them though.

Leaves £139 for anything else - you need to know exactly what is going in here
That’s true. Am going to keep complete spending diary starting today.

join https://www.freecycle.com for all the baby gear and clothes. Other will recommend various scheme which companies run and that offer free samples.
We already have got most of our baby stuff through relatives or freecycle including cot, travel system, etc etc. More clothes than we’ll probably ever need but can ebay them once they’re grown out of.

Can you take a few days leave and sort it out?
Not really as have only been in the job a month and am trying to save up leave for when the baby is born.

Cut out the TV guides etc, budget for one takeaway or maybe a 2 for 1 deal in a local restaurant every month. This money could make a big hole in your debts.
That’s a really good idea, finding the self discipline is tough sometimes though with a pregnant partner! Hormones can be dangerous! Will try to rationalise it with her though, scrimp now, relax later rather than the other way round.

Thank you though for taking so much time to pick through everything. Much appreciated! Feels better to have shared it all tbh

learning_to_save

I have to vouch for Asda's pizzas 3 for £3, straight to the oven from the freezer, 16 or so minutes later gorgeous pizza they have a few different types so you don't have to buy 3 cheese and tomato I do a mix n match.

I hope th HR section can help you out with yor P46.

As for when the baby arrives don't go buying loads of clothes, they grow so quick, I had bought stuff for my son but he grew so quick he only wore things once!!

I also got bits throughout my pregnancy so I didn't have to buy it all in one go. I just added an extra couple of items to the shopping each month so it didn't make much difference to the shopping bill. I also now use Asda's own baby shampoo and body wash much cheaper than Johnson's and I can't personally tell the difference except in the price.

Good luck with everything LTS

Satampra

Best of luck!

With regards to your student loan, you will repay 9% of everything over £15,000. Your salary means you will be paying back £15.59 per month.

david_hellier

Hi,

According to my calcs you have £56.94 per week to spend on food and anything else each week. You od will never reduce if you exceed this.

I suggest you write this amount (£56.94) in a little note book on a Monday (a spending diary) and keep a note of what you spend/withdraw by subtraction. The figure assumes you incomes are at present levels and, £20 per month SL and £20 od payoff. Please note the others' tips on cutting back.

Also, set up SOs for the CC payment not DDs. Never make the min payments as CCs reduce your purchasing power. When you partner take maternity leave you will need to increase income or make further reductions in outgoings.

Good luck the figures are as follows:

incomeweeklymonthlyself £ 1,050.00 partner £ 400.00 cbwtc £ 68.00 total0.001518.00divide by 4.33 £ 350.31 £ 350.31 total weekly incomespendweeklymonthlyrent/mortgage £ 525.00 council tax £ 95.00 elec £ 20.00 gas £ 20.00 water £ 16.00 secured loansTV licence £ 11.25 fines £ - mob £ 35.00 cc £ 250.00 loan £ 196.00 landline £ 13.00 od payoff £ 20.00 petrol £ 50.00 sloan £ 20.00 total0.00 £ 1,271.25 divide by 4.33 £ 293.37 £ 293.37 total weekly spendStart= income - spend = £ 56.94 per week

calleyw

matthewking26 wrote: »

£68 - my working tax credit (valid until at least next April)

I would get this checked out as couples with out children who earn over £15K a year don't get tax credits at all.

I know once the baby is born you are entitled to earn up £55K a year and still get something.

So make sure the Tax credit people know about the higher earning job.

Also you should be able to pay your water over 12 months with a budget account.


All the best.


Yours


Calley