New Girls SOA

pelirocco

HappyMJ wrote: »

Okay simple solution remortgage property for 50% of it's value at 2.5% interest with a follow on rate of 4% on a 15 year mortgage. Clear all the debts reducing rates from 18.9% down to 4% and close all the accounts.

Repayments will be reduced from £3,328.50 to £2,681 after the introductory period on the mortgage has expired. Shortfall of £545 removed now with a £100 surplus and OP is completely debt free in 15 years.

Is it that easy to remortgage ? especially with high credit card debt , and this will of course be moving unsecured to secured which is risky

HappyMJ

pelirocco wrote: »

Is it that easy to remortgage ? especially with high credit card debt , and this will of course be moving unsecured to secured which is risky

With 50% LVR and affordability able to be proven as shown in this SOA yes it's quite easy.

I don't agree with many of the figures myself.

I think petrol is too low. I think car maintenance is too low £30 for 2 cars worth £500 each. I don't think so. That'll just cover tyres, an oil change and the MOT's. Fine for a new car but not one worth £500. Whenever I've had such low value cars the maintenance expenses are much higher.

I think medical is too low. The OP has to pay for prescriptions for 2 adults and non-prescription medication for 5 people, dentist visits every 6 months and optician visits every now and again. £8 a month won't cover that although the children could get dental for free on the NHS.

I think the figure is £20 per month for Entertainment is wishful thinking. They will be spending much more than that on entertainment expenses.

I think holidays allowance is too low. They need holidays to enjoy themselves and de-stress. One is on £50,000 and the other on £27,500 per year. I would imagine they aren't exactly easy jobs. They are going on holiday and £40 a month won't cover a holiday for 5 people even if it's just for one week a year in a holiday park.

Pixie5740

An interest rate of 4.19% APR given your LTV seems pretty high. The 8.19% APR on a secured loan of £70k is pretty eye-watering. If you haven't already I would suggest you go to see a mortgage broker to see if you can get a better mortgage deal and possibly consolidate the secured loan at the same time since that debt is already secured to your home.

I'm not loyal to any utility provider. Every 12 or 18 months (depending when my contract/new customer deal is up) I either phone up to get a retention deal or use Quidco to get a new deal elsewhere plus some cashback. Earlier this year I earned £60 just change from Sky phone and broadband to Plusnet and the Plusnet package was cheaper. :T I do the same with gas and electric, insurance, flights, hotels, holidays, birthday presents and Christmas presents. Just check that buying them through Quidco is cheaper than buying them elsewhere. For example I bought a train ticket yesterday. Using The Trainline through Quidco the ticket was £58.50 plus a £1.50 booking fee and I would get 1% cashback but if I went direct to Scotrail (not through Quidco) it would only be £58.

My household income is a bit higher than yours but since I started using YNAB it became clear how much money I was haemorrhaging each month and I have started to enjoy shopping around for the best deals so that I can spend my money on fun things rather than paying too much for gas or internet.

The £900 groceries bill would seem to be the area you can make the biggest indent immediately with not too much effort.

LittleDutchgirl

Hi Joanna
There is no doubt about it you need to take steps and do something now! You have to stop hemorrhaging money and take control of the situation. You can get the groceries waaay down. Don't try and do it all at once but cut back slowly and steadily. The kids will never notice it isn't premium brand pizza after swimming. And remember if you have to go onto a DMP they won't allow you £900 a month for groceries.
You need to sit down and figure out where you are with all your utilities and other bills. Are you in credit? Can you get a refund and chuck it at a credit card? Can you get utilities cheaper? Treat it like a job and make it a bit of a challenge to see how much you can save. I was chucking so much money away by not looking for the best deals/letting interest rack up etc.
Set up spreadsheets (or YNAB) and keep a note of exactly what you spend. It'll be a real eyeopener I promise.
Try and get the rest of the family on board. It is amazing what kids will let you sell if they can see the money go towards something they want.
Above all hang out on these forums. There are some lovely people with great ideas/experience and while some of this stuff may be a bit tough to start off with we're all here because we were/are in debt.
Keep posting and good luck
LDg

kazwookie

All the credit card debt, what was the money used for?

Cut the food shopping
Are there any items in the house you can start to sell.

You need a major cut back

I would also suggest you keep a small note book and write EVERYTHING you spend down in it, !!! I am sure it is worse than you have posted up.

Good luck

Brightspark87

Hi

I know this part is scary but you have had your light bulb moment so lets make the most of it! You earn good salaries - you can do this! I know when you both work its easy to over spend on the shopping. Do you use online shopping? I spend far less when I shop online and can be more savy whereas when I nip into the shops for milk I end up spending at least £10! Might be worth it? Try Quidco and then look for shopping (most of the big brands have deals for new cutomers). Also, I would look at the fact you live in a VERY amazingly lovely area make the most of it! could you rent your driveway out as parking space? I knew people who did that in London. Good luck! x

sugarcube84

**joanna** wrote: »

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.................... 2

Monthly Income Details
Monthly income after tax................ 3051
Partners monthly income after tax....... 1830
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4881

Monthly Expense Details
Mortgage................................ 1470
Secured/HP loan repayments.............. 860
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 180 as others said is this over 10 or 12
Electricity............................. 76 should be able to reduce gas and elec look at swapping and earning cashback and make a conscious effort to reduce/turn off etc
Gas..................................... 85
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 65 in your situation I would look at cancelling, it doesn't have to be forever. It you cant part with phone internet look at swapping and earning cashback
Mobile phone............................ 30 when is this up for renewal look at a payg sim and keeping your handset
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 900 this can be reduced by half, go down a brand shop at ald1, I know you have drive past others to get to it and your tired (I totally get where you are coming from) but your shop will be done in half the time and its quieter and less stressful. Meal plan, shop with a list and bulk out meals with veg/lentils
Clothing................................ 100 look at reducing this, how about surveys to top this up. I've earned £60 in 3 months from doing surveys which goes toward clothes and prezzies
Petrol/diesel........................... 120 do you buy at a supermarket and use a points card, look at cutting out non essential journeys,
Road tax................................ 70
Car Insurance........................... 70 when up for renewal don't forget cashback
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 0
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 8
Pet insurance/vet bills................. 20 could you look at swapping and getting this cheaper/cash back
Buildings insurance..................... 25 again look at swapping/cashback
Contents insurance...................... 0
Life assurance ......................... 65 again swapping/cashback
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50 look at reducing this with surveys and shopping around/reducing spend for each person
Haircuts................................ 30
Entertainment........................... 20
Holiday................................. 40 put the holidays on hold for the time being
Emergency fund.......................... 10
Total monthly expenses.................. 4428.12


Assets
Cash.................................... 0
House value (Gross)..................... 725000
Shares and bonds........................ 600
Car(s).................................. 1000
Other assets............................ 2000
Total Assets............................ 728600


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 240000...(1470).....4.15
Secured Debt.................. 70000....(860)......8.19
Total secured & HP debts...... 310000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
JLF............................9000......271.......16.9
Halifax........................1500......12.5......7.5
RBOS...........................5500......55........3.5
Barclaycard....................7500......175.......12.9
Nationwide.....................2400......40........12
Nationwide.....................5900......160.......18.9
Barclaycard....................9900......235.......10.9
JLF............................2500......50........16.9
Total unsecured debts..........44200.....998.5.....-


Monthly Budget Summary
Total monthly income.................... 4,881
Expenses (including HP & secured debts). 4,428.12
Available for debt repayments........... 452.88
Monthly UNsecured debt repayments....... 998.5
Amount short for making debt repayments. -545.62

Personal Balance Sheet Summary
Total assets (things you own)........... 728,600
Total HP & Secured debt................. -310,000
Total Unsecured debt.................... -44,200
Net Assets.............................. 374,400

I've made some comments above, I get where you are coming from with husband not really wanting to see the problem, been there done that got the t shirt. It just meant , for me, that I ended up taking control. I think if you make the changes above your SOA will balance which is great news but you need to keep track of every penny. Spending diary, YNAB or spreadsheets whatever works best for you.


After my lightbulb moment I concentrated on reducing monthly spend on d/d so insurances/utilities etc then looked at reducing grocery shopping, then looked at upping my income (surveys/cashback) then started selling everything I accumulated that i didn't need.


Holidays/entertainment went by the wayside the first year until we were comfortable with our new budget then we introduced treats slowly when we could afford it, a sun holiday was the first thing, then internet at home, then a cheap gym membership, but these were only introduced when we were in a position to regularly overpay our debts. The way we looked at it was cancel everything and then decide what we really needed/missed and take on when we could afford it.

Have a look at snowballing as well.Good luck you have taken the first big step coming here.

Playing_with_Fire_2

Steps for saving time and money on grocery shopping:

Meal plan. Cooking from scratch is generally cheaper. Do you have a slow cooker? Could you borrow one. Put cheap ingredients in in the morning, cook during the day and eat delicious food in the evening.

Plan shops - do a big online (Use a voucher code, I'd suggest Tesco or Asda) or Aldi/Lidl shop for basics, depending on your cashflow and storage space once every couple of months. Costco? Can you get to a Lidl and use the £5 off voucher? Look on the old style board for some amazing delicious ideas. Start with everything from the value range, and avoid packaged meals. Eat less meat and more vegetables/lentils/rice. Then do little weekly top up shops, with a list, for things that you need (should be mostly milk and fresh fruit and veg). Spend less time shopping, and use this time for cooking. By shopping less frequently, it will be less stressful and you/SO will have more time to think about buying value and what you need, rather than what you want or what you are used to. If pester power is a problem stick to online shops (with a voucher) or split shopping and childcare with SO.

Expect some comments from the family on the new food and mostly ignore or rephrase them. The eating will be more healthy, everyone will be learning more cooking, some foods will taste different, and everything will come in white labels. Your partner will also need to cook/prep/wash up more. These are good and exciting things for a family. They are necessary for a family in debt

Only go into Waitrose for a free takeaway coffee.

Watch 'Eat well for less.'

Good luck

andyfromotley

HappyMJ wrote: »

It's not that bad and we're supposed to be non judgemental. You wouldn't want to see my SOA it looks much worse than that.

Although they are adding £545 to the debt each month they are paying £3,328.50 off their debts each month so it isn't as bad as you make out. Their net worth will be increasing each month.

An easy way to reduce outgoings would be to refinance the debt to reduce overall payments by £545. Although that isn't recommended it will reduce outgoings and make the SOA look balanced and nothing has really changed.

Hi MJ,
as usual we don't agree on these SOA's where people have high incomes but are effectively cash insolvent.

I wasn't being judgemental, just highlighting what the op had put on her SOA and OP.

It is exactly as bad as i make make out. she is currently overspending by £550 pcm. to suggest that that is ok as her net worth is increasing is ridiculous.

I highlighted instant savings which would put her back in the black within a month. Refinancing options which will save her £1000 pcm and debt shifting which could yield hundreds of pounds more each month. Hardly unhelpful.

leeroy2009

also whats going on here I suspect that they are throwing so much money at the min payments to the credit cards, but as there aint any actual cash left over, the credit cards come back out again as they have to use the cards as theres no cash left over hence the over spend.


its only going to take a few missed payments to the cards to set the alarm bells ringing at the banks, as once the computers get the updates then they credit limits will be cut, as soon as they make the min payment the computers will reduce the limits leaving no room to spend, then what happens is the computers see these customers as high risk and increase the aprs automticaly on the cards - then that's it game over the house becomes at risk (as theres no cash and no available credit available)


ive not commented on gas phones etc as theres no point, any savings here will not pull this family out of debt, I think she understands this and knows its about to get worse.