Our SOA

ShiftThisDebt

So, here it is, our SOA!

I have to say, I'm not really panicked about our debt as we have a good income these days but me and DW obviously share a desire to get rid of these debts within 2-3 years max so we can really save some money. As it stands we don't really have any savings. I have tried to go for 'worse case scenarios' in terms of spending, obviosuly clothes and things like that alter from month to month,some months we'll spend very littlebut other months quite a bit.

We've only just moved house so a lot of our savings have gone on solicitor fees. This is our first mortgage so we haven't really paid anything off the mortgage yet other than 1 payment.

Also, my income has jumped up to £1400 a month from this month from the past 12 months where I was paid around £1100. So if it appears that we have loads of spare cash each month, but no savings, I was on a lot less cash last year and we also used what we had saved last year for solictor fees etc.

Our additional income of £165 is from my SIL who lives with us now, so again this is 'new money' as we've only just moved house.

So, the main issue I have is what is the best way to tackle the credit cards? Any advice would be warmly recieved.

We've thought about consolidation loans as we really don't use the credit cards anymore so know we wouldn't use them again (they helped us get through a few years where I was studying to retrain which I now have!) We've also considered a 0% credit card balance transfer. We both have good credit ratings, mine is slightly higher than DW's but she earns more and the big credit card balance is on her card. When I have used MSE's soft search for 0% CC's my chances come back as 80% and DW's as 70%. I don't know if they would give a 0% transfer on such a large amount?

The car payment ends in June 2016 (THANK GOD, NEVER AGAIN!!!!!)

Mobile bills are high I guess but that covers 3 phones in the house.

Anyway, any questions then please ask and I'll answer them. Thanks

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 1969
Benefits................................ 192
Other income............................ 165
Total monthly income.................... 3726

Monthly Expense Details
Mortgage................................ 565
Secured/HP loan repayments.............. 252
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 117
Electricity............................. 49
Gas..................................... 49
Oil..................................... 0
Water rates............................. 57
Telephone (land line)................... 0
Mobile phone............................ 110
TV Licence.............................. 12.12
Satellite/Cable TV...................... 70 (sky bundle, TV, Bband & phone)
Internet Services....................... 0
Groceries etc. ......................... 240
Clothing................................ 40
Petrol/diesel........................... 60
Road tax................................ 15.75
Car Insurance........................... 33.16
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 60
Other child related expenses............ 10
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 9.68
Buildings insurance..................... 15
Contents insurance...................... 0
Life assurance ......................... 10
Other insurance......................... 4
Presents (birthday, christmas etc)...... 30
Haircuts................................ 25
Entertainment........................... 100
Holiday................................. 300
Emergency fund.......................... 0
HMRC Repay.............................. 60
Bank Account Fee........................ 7
Gym..................................... 50
(Unnamed monthly expense)............... 0
Union Subs.............................. 20.47
Total monthly expenses.................. 2396.18


Assets
Cash.................................... 0
House value (Gross)..................... 155000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 157000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 139000...(565)......3.92
Hire Purchase (HP) debt ...... 2520.....(252)......9.6
Total secured & HP debts...... 141520....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard 1..................11500.....270.......29.9
Barclaycard 2..................1180......27........24.9
MBNA C/Card....................696.75....25........26.49
Family Loan....................16000.....250.......0
Capital 1......................288.36....8.96......25.65
Total unsecured debts..........29665.11..580.96....-


Monthly Budget Summary
Total monthly income.................... 3,726
Expenses (including HP & secured debts). 2,396.18
Available for debt repayments........... 1,329.82
Monthly UNsecured debt repayments....... 580.96
Amount left after debt repayments....... 748.86

Personal Balance Sheet Summary
Total assets (things you own)........... 157,000
Total HP & Secured debt................. -141,520
Total Unsecured debt.................... -29,665.11
Net Assets.............................. -14,185.11

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

concrete_kid

Sky are currently doing phone, broadband, TV for £35 a month. Ring them to cancal and you should be able to get yours right down, they'll normally always make you an offer to keep your custom.

ShiftThisDebt

Our Sky deal is a 12 month deal which runs until December. The TV part of it is half price on the full package.

HappyMJ

You should put family loan down as an unsecured debt rather than an expense.

Can you negotiate for the repayments to be lowered whilst you attack the high interest charging debts first?

ShiftThisDebt

The family loan was a loan from my brother for our house deposit.

As long as we pay it back within 5 years we can pay it however we want.

The loan is for £16000.

So yes, I could pay less in year 1 and 2 and increase in years 3, 4 5 etc.

DandelionPatrol

ShiftThisDebt wrote: »

The family loan was a loan from my brother for our house deposit.

As long as we pay it back within 5 years we can pay it however we want.

The loan is for £16000.

So yes, I could pay less in year 1 and 2 and increase in years 3, 4 5 etc.

As Happy says, you should put family loan down as an unsecured debt rather than an expense.Because when I and others look at the SoA, we look at how many months income it would take to clear off your unsecured debt. 6 months is the alarm level and this debt takes you from comfortably below that level to substantially above it.

I would say you are wise to set out at £250/month to be sure of paying this back on the agreed terms as it is family, even though the usual advice is to pay back highest APR debt first

ShiftThisDebt

DandelionPatrol wrote: »

6 months is the alarm level and this debt takes you from comfortably below that level to substantially above it.

Sorry, could you explain this in a little more detail please?

I will repost my soa soon with the family loan as an unsecured debt.

Dobbibill

[QUOTE=ShiftThisDebt;69041956
We've only just moved house so a lot of our savings have gone on solicitor fees. This is our first mortgage so we haven't really paid anything off the mortgage yet other than 1 payment.

Congrats on the house move

Also, my income has jumped up to £1400 a month from this month from the past 12 months where I was paid around £1100.

And also on the pay rise


We've thought about consolidation loans as we really don't use the credit cards anymore so know we wouldn't use them again (they helped us get through a few years where I was studying to retrain which I now have!) We've also considered a 0% credit card balance transfer. We both have good credit ratings, mine is slightly higher than DW's but she earns more and the big credit card balance is on her card. When I have used MSE's soft search for 0% CC's my chances come back as 80% and DW's as 70%. I don't know if they would give a 0% transfer on such a large amount?

Ignore the credit scores/ratings. Only you and the CRA's sees this, each lender has their own criteria. It's your credit history that will be important. A little off topic but given that you've recently moved, have you updated the ER with your new address. This will take time to filter through to the CRA's too.


Mobile phone............................ 110

I know you have already mentioned this is for 3 mobiles but have you tried to ring your provider, even if you are still mid-contract and ask for a better deal. I did this and got a better deal for less money, just for asking.

Satellite/Cable TV...................... 70 (Sky Bundle, phone, bband & phone)

I know you've mentioned this too but put it in the diary to ring when it's due. Again asking for a better deal doesn't cost anything.

Buildings insurance..................... 15
Contents insurance...................... 0 nothing at all?

Entertainment........................... 100
Holiday................................. 300

You should look at moving some of this from here.....

Emergency fund.......................... 0

to here

Gym..................................... 50

Can you get rid of this to help with your debts sooner


Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard 1..................11500.....270.......29.9
Barclaycard 2..................1180......27........24.9
MBNA C/Card....................696.75....25........26.49
Capital 1......................288.36....8.96......25.65
Total unsecured debts..........13665.11..330.96....-

[/QUOTE]

Some of my observations I've highlighted in red.

Have you looked at snowballing. This is where you pay the minimum on all your debts and overpay with any spare money on one debt until it's cleared then use the money from that debt to pay the next and so on. Here is the link that will help work out a debt free date for you.
You can do it by balance or interest rate order. Highest interest first will save you the most money but have a play with the calculator to see what works for you.

HTH

DB

ShiftThisDebt

Thanks very much for taking the time to respond. I've responded to each of your red highlights and hopefully this clears one or two things up.

Mobile phones: My wife's phone is up for renewal in November, I think she is going to kep her phone for another yearso her monthly cost will drop. Me and my daughters phone have 15 months to run, I can try getting a deal but I'd be surprised if I got it! I certainly intend to keep my mobile for a 3rd year once my contract expires anyway as I usually do this, so hoping my £40 a month can be halved.

Sky: Yep, I have the date and I know I need to renegotiate in December! Hopefully they'll offer a significant discount again!!

Building and Contents insuance: Sorry the figure in "Buildings" is a combined one for both insurances as it's a single policy

Holiday and Emergency fund: Yes, fair point. The money is purely there for the holiday we have got booked next year which was booked pre-house move (we didn't think we would be moving house this year!!) and so that can indeed be switched once it's paid off.

Gym - This is for a local bootcamp and I'm tied into a 12month contract which ends in April, however I'm not sure I am prepared to give this up anyway as it's been great for me to gain fitness and the coaches know all about my back, which I have had an issue with recently, and so they tailor the excercises to suit it.

DandelionPatrol

ShiftThisDebt wrote: »

6 months is the alarm level and this debt takes you from comfortably below that level to substantially above it.

Sorry, could you explain this in a little more detail please?

It is a rule of thumb. If your unsecured debt is more than 6 months income you are well in debt and you need to take serious corrective action - eg stop sky and cut the entertainment and holiday budget. If it is 3 months then you just need to pay it off and not take out any more.

High earners could probably afford to have more debt [but if they do, you question their money management] those with limited income cannot afford so much [and if they don't have any, you admire their ability to manage].

Given that loan from your brother, you will be in serious bother if you lose an income, so I would suggest you need to take serious corrective action to reduce debt.

Dobbibill

Fresh eyes on a SOA are often just food for thought.

I'm glad a few of the suggestions have been helpful.

I wish you well with your debt free journey.

DB