Please help me get out of this vicious circle

LoisLane16

Thanks again YL, we sound really similar. I too have those same worries, but I know they're MY worries, not the kids'. We've just come back from a holiday abroad, which we did save up for, so I know I can do it, but I didn't budget properly while we were out there & the last couple of days were really tight, & not very enjoyable on my part, so I've learnt from that.... We have raised 3 lovely daughters (10, 7 & 2) and the older 2 very rarely moan if I tell them we can't afford something, which helps The little one moan regardless, serious terrible 2s going on here! :eek: :rotfl:

tealady

Hi
You mention takeaways but say you loke cooking well how about scrapping the takeaways and each week have a "takeaway" you have cooked from scratch. Get the rest of the family to help as well (whether it be shopping, food prep or washing up), there are loads of recipies on the net. Get a family DVD to watch and you could have a great family night in.
HTH

andyfromotley

LoisLane16 wrote: »

Not sure if this is better:
Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary Amount(£)
Total monthly income 3,007.4
Monthly expenses (incl. HP & secured loans) 2,369.79
Available for debt repayments 637.61
UNsecured debt repayments 773.49
Amount short for making debt repayments -135.88

Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 191,000
Total Secured & HP Debt -79,000
Total Unsecured Debt -20,297
Net Assets 91,703

Household Information

Number of adults in household 2
Number of children in household 3
Number of cars owned 1

Income, Expense, Debt & Asset Details
Income Amount(£)
Monthly income after tax 2100
Partners monthly income 715
Benefits 192.4
Other income 0
Total monthly income 3007.4

Expenses Amount(£)
Mortgage 610.3
Secured/HP loan payments 0
Rent 0
Management charge (leasehold property) 0
Council tax 108
Electricity 35
Gas 40
Oil 0
Water Rates 23
Telephone (land line) 23 Too High. you are paying £30.50 pcm for phone and internet. I pay £7.80 for both. Keep track of the best buys on MSE but you can cut this in half easily.
Mobile phone 105 (Whaaaaaat? Get this down as soon as you can!! How many phones is this for. £15 cpm for sim only)
TV Licence 12.12
Satellite/Cable TV 53 (Cancel this. YOU CANNOT AFFORD £636 per year FOR SKY.)
Internet services 7.5 See Landline
Groceries etc. 450 This can be reduced you could lop £50 off EASILY.
Clothing 50
Petrol/diesel 50
Road tax 15.75
Car Insurance 32 Just make sure you drive this down at every renewal
Car maintenance (including MOT) 50
Car Parking 40
Other travel 0
Childcare/nursery 0
Other child related expenses 88
Medical (prescriptions, dentists, opticians etc.) 20
Pet Insurance/Vet bills 0
Buildings Insurance 22
Contents Insurance 15
Life Assurance 55
Other Insurance 0
Presents (birthday, christmas etc.) 100 This is a lot when you are in debt. Know you have three kids, but you are also living beyond your means. You are going to have to stop buying stuff you cannot afford and this applies to Birthdays and Christmas.
Haircuts 20
Entertainment 100 (No, you can't afford this. £7 pm for netflix, everything else you do has to be cost free, don't worry there are tons of things to do.)
Holiday 0
Emergency Fund 0 Do you have an emergency fund? If not you need one of £1000. This stops you resorting to debt at the first hiccup in the road. This should be your first aim whilst making minimum payments on your debt)
Mortgage protection 23.32
Lottery 10 (No, no, no!!)
Bank account fee 17 (What? If you gain ESSENTIAL: benefits form this account that cost more than £204 per year keep it, but i'd like to know precisely what they are. Otherwise Bin)
OD fees & charges 70
Endowment 66.3 (is this good value?)
Windows 4.5
School dinners 24
Activities 30
Total monthly expenses 2369.79

Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 79000 (610.3) 4.7
Secured & HP Debt totals 79000 - -

Unsecured Debt Description Debt(£) Monthly(£) APR(%)
Nationwide loan 3322 302.3 7.5
Barclaycard 8500 233.4 17.5
Natwest CC 2575 61.19 16.9
Lloyds CC 5900 176.6 25.5
Unsecured Debt totals 20297 773.49 -

Asset Description Value (£)
Cash 0
House Value (Gross) 190000
Shares and bonds 0
Car(s) 1000
Other assets (e.g. endowments, jewellery etc) 0
Total Assets 191000

Hi lois,

The bad news is of course that currently you are insolvent. If you carry on as you are you are in a debt spiral that will never end and just get worse and worse. You are in a FINANCIAL EMERGENCY!!! The good news is that you are aware of that and its fairly easily resolved. (on paper at least).

I have annotated your SOA, if you follow my advice there are savings of at least £300 to be made, probably more. This will give you money to get your EF up to £1000 and then have money to pay down your debt. Hooray!

But we both know that this isn't really the problem. Anyone with a calculator could have worked that out. The problem is that i suspect that you won't implement any of those changes. Will you really have got rid of sky by the end of the month? I doubt it. You need to completely re adjust your thinking on money. What constitutes essential? What does our budget look like? How can we save even more? How can we live on the absolute minimum and get rid of the debt? This is big stuff and you need to consider these things. Once you have this shift your debts will sort themselves out quickly. (i get that doing it alone is not easy, demand (yes demand!!) as much assistance as you can from your hubby even given his problems. Its time he got better with numbers. Were not talking quantum physics here just simple arithmetic.)

I found YNAB an enormous help for budgeting.
Dave Ramsey and Mr Money Moustache have helped me enormously with how i view debt and spending.

Do not turn personal debt into debt that is secured on your house!! Particularly when you haven't sorted out your personal finances and spending. Its a dumb thing to do!!

You know what you have to do Lois, get to it girl!!!!

Pixie5740

LoisLane16 wrote: »

And also the right tools to help us - I have looked at YNAB, but it says something about costing $60, is that right?

You get a 30 day free trial with YNAB and some posters have been successful in winning a free licence by attending the free webinars. $60 is about £40, less than you spend on satellite television every month. I've certainly made the £40 back over the course of using YNAB to improve my budgeting as have many others on the forum.

It's not for everyone though but since the trial is free it's worth having a go. It can get a bit addictive. There's something very satisfying about reconciling your accounts and everything balancing. Budgeting is the new shopping.

andyfromotley

You can usually pick YNAB up on steam for £30. Either way i promise that it will save you more than that in your first month alone if it works for you. (you will know this by trying it out free for a month.) if you are student you get it for free.

FireWyrm

You have to speculate to accumulate as the saying goes.

Yes, YNAB seems expensive but then so are Clarkes shoes for children, but they last 3 times as long as cheap pressed paper crap for £15 a pair. YNAB costs £40 to buy, you may be lucky and score a freebie or a cheap version off Steam, but frankly, it is worth every single penny of the full price. You will make the money back in a month with savings and then, in about 3 months you will see a total shift in perspective when it comes to money. Once you start seeing results, there is no going back and you will wake up one morning as a total fully paid up member of the tight-wads club. Part of rehabilitating your finances is the ability to understand the psychology behind what we do. Why do you think that there had been and explosion of credit cards in the last 30 years? Because it is convenient for the 'user' to not carry around cash? Wake up! Credit cards are incredibly lucrative for the banks. They know that spending on a card is less painful than using cash. They know for a fact that if you buy it in a credit card, you will be willing to part with around 30% more for the same merchandise and if you can't afford it up front, well, there is this convenient but stupidly expensive line of credit you can call on. They know that 86% of those who balance transfer debt will go on to spend once again on the old card and on the new one into the bargain earning them huge amounts of interest. Those ridiculously long balance transfer deals are a sprat to catch a mackerel.

So, while YNAB appears to be expensive, ask yourself this...would you pay £40 for a decent nights sleep and the certain knowledge that your bills are ALL paid and your debt is under control? I think you know the answer. However, with most things, there comes a price and that is commitment. 100% , total, blinkered commitment. You must not take your eye off the ball ever again. You can't decide not to pay attention one month and you absolutely have to decide what is a luxury and what is necessity. Personally, TV is a luxury, eating is not.

Do you want to change your life or not? Choose, now, today. If you do, cancel that SKY, download YNAB and start on the path.

QueenBeruthiel

Make lists. Inventories. Start with fridge, freezer and store cupboard. Concentrate on using up those items approaching the use buy date. Plan meals around them.

Next is your toiletries cupboard. You'll probably find that you have shower gel and shampoo to last until 2037. Don't buy any more until you have used up what you have got. Same applies to make up.

Move on to clothes, to various cupboards, to under the stairs, the shed and the garage. Use it or sell it, via gumtree or ebay.

QueenBeruthiel

Make more lists, of what you need. If you have staples in - pasta, rice, tuna - you can always produce a meal. £450 is a lot for groceries. I could feed the street on that. Meal plan and, if possible, batch cook. Make optimum use of your freezer.

£50 is a lot for clothes. Again, what do you need? I mean need. Can someone buy you that item for your birthday or Christmas instead of smellies and useless tat? Plan ahead and buy in the sales, rather than at maximum (profit, for retailers) price.

sourcrates

As others have said, your grocery bill is a bit high, I don't know where you shop, but I`m a recent convert to Aldi & Farm foods.
I would spend about £50 odd quid at Morrison's, a week, just for myself, by splitting the shop between the "budget" shops, I saved £23 a week.
Farm foods are great for frozen stuff, and thing like sauces and other basics, a lot cheaper than one of the major supermarkets, and Aldi`s prices for veg and meat are unbeatable, and all great quality too, just an idea for you.

ReadingTim

What is mortgage protection and do you need it? And even if you think you need it, will it pay out? Read the T&Cs very carefully as these products have a nasty tendency not to pay out.

You could also ditch the window cleaner, or perhaps pay one of the kids to do it if they're not happy about the cuts you should also be making to the sky TV, entertainment and birthday/xmas presents...