what a time to get tight!!

redbreast

Hi,
I've been lurking on this forum on and off for a couple of years now... I'll admit I've never been great with money, always choosing instant gratification of buying over staying debt free. I've had and got rid of credit card debt a few times since I left University 10 years ago and I'm tired of the cycle. I have a mortgage now and a house that needs a lot of work doing to it, I need to grow up and get saving!
I've used the budget tool on here and it confirmed I spend more than I earn. I'm always in my overdraft by the middle of the month (tend to use that £300 as an extension of my own money) and recently have gone into an unplanned overdraft once or twice.
So close to Christmas is a difficult time to start this but if I don't I'll use my credit card to get presents and food and end up with another £500+ of debt by January.
I already use the Santander 123 current account and credit card for all my bills and food/petrol and what is left in my First Direct account should be for spending/saving. Unfortunately I usually overspend on food (average £700/month for 2 of us!!) and end up buying things I don't need; usually Amazon purchases or things I convince myself I need.
My fixed rate mortgage needs renewing in January and my broker has (hopefully) got me an extra £10,000 which will pay off my £2000 credit card debt and give me some money to get my house done. I also need to save £170/month on top of the £122/month I pay for my car so I can pay off the bubble in 2.5 years time.
According to my sums I should have £250-600 a month (depending on pay) after bills and food for saving so I've obviously got some cutting back to do!

Any advice welcome, sorry for the rant.

EssexHebridean

Ahh redbreast a big WELL DONE for taking the first step!

I'd suggest doing yourself a proper SOA (link in one of the posts at the top of the board) so you can see in detail, in one place, exactly what goes where, what you owe and what your minimum payments are. Posting it up here also means that people can make suggestions of where savings can be made - although the first one that jumps out at me just from your post above is the groceries - £700 a month for 2 people? Gosh! There's two of us in my house too, and we generally spend under £150 a month - that includes all cleaning products too.

Suggestion on that one is to take a look at the Old Style boards on here - they have some great ideas for meal planning and food budgeting and you'll pick up a lot from them. Also take a look at Martin's Downshift Challenge if you buy a lot of branded goods.

Good luck!

andyfromotley

Ha! you made a terrible typo!!! You put that you you spend up to £700 on food for two of you. Obviously thats impossible right??.............. WHAT!!!!! Gettoutahere!!!

Welcome redbreast,

you are in the right place, fear not.

First thing to do is post up an SOA so we can all have a look at the madness of the current redbreast family spending. ;-} We can also point you in the direction of financial rightousness.

Use this link
http://www.stoozing.com/calculator/soa.php

Oh and as an emergency measure tell everyone that would expect pressies/feeding/entertaining this christmas, 'sorry were skint/saving for the house work, so were having a spend free christmas' they can like it or lump it but you will ariive into the new year in a MUCH healthier position because of it.

northerner999

The good news is that there is going to be plenty of fat to cut form your SOA if you are spending £700 PCM on food and then buying impulsively on Amazon etc! I reckon your monthly food bill is probably equal to what I spend for six months!

Bearing in mind you recognise you are frittering away cash, consider whether adding £10,000 to your mortgage is such a good idea. That is essentially debt consolidation, and what most on here would argue against.

Cutting just your food down to a reasonable £200 PCM would be £500 PCM saved. Control your Amazon frittering and you could have your credit card bill done with by April.

If your house repairs are really urgent then prioritise them, and borrow to fund if your roof is leaking and needs sorting, but do question whether it needs doing this instant or whether it can wait till the summer when you have saved the cash. If you need £8,000 of house repairs then look at what you can domyourself or with the help of friends and family.

Remember that adding to your mortgage means you are adding to the interest you pay, and that may not seem a big concern now while interest rates are low but they are incredibly unlikely to remain so low for the duration of your loan.

redbreast

Well this is a bit scary...
My partner isn't working at the moment so I'm working out all our expenses on the minimum that I earn a month so anything he gets is a bonus. I'm a nurse so depending on the shifts I do I can earn up to £400 more than this but it seems sensible to work things out on the lowest income.
I've tried to be as honest as possible. I was surprised by some figures; like clothes etc, but I went through my last 3 months bank statements and these are the averages.

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2000

Monthly Expense Details
Mortgage................................ 525
Secured/HP loan repayments.............. 122
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 37.5
Gas..................................... 37.5
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 17
Mobile phone............................ 34
TV Licence.............................. 13
Satellite/Cable TV...................... 34
Internet Services....................... 0
Groceries etc. ......................... 700
Clothing................................ 50
Petrol/diesel........................... 120
Road tax................................ 10
Car Insurance........................... 35
Car maintenance (including MOT)......... 17
Car parking............................. 5
Other travel............................ 5
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 15
Life assurance ......................... 28
Other insurance......................... 27
Presents (birthday, christmas etc)...... 30
Haircuts................................ 27
Entertainment........................... 120
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2189


Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 18000
Other assets............................ 0
Total Assets............................ 158000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 105770...(525)......4.49
Hire Purchase (HP) debt ...... 7268.....(122)......6.9
Total secured & HP debts...... 113038....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2000......20........0
Car Saving (bubble)............5000......170.......0
Total unsecured debts..........7000......190.......-


Monthly Budget Summary
Total monthly income.................... 2,000
Expenses (including HP & secured debts). 2,189
Available for debt repayments........... -189
Monthly UNsecured debt repayments....... 190
Amount short for making debt repayments. -379

Personal Balance Sheet Summary
Total assets (things you own)........... 158,000
Total HP & Secured debt................. -113,038
Total Unsecured debt.................... -7,000
Net Assets.............................. 37,962

Brightspark87

OK so loolking at this, basically if you cut down the food (even if its £379 a month to start with!) you will sort this this deficit.

Turning unsecured debt into secured (by re mortgaging ) is always a worry to me. Firstly, you may more interest over the long term and secondly, if you fall behind you can lose your home.

If you tweeked things a little you could pay off your credit card, save up for your bubble payment and get sorted!

Plus, if your partner isnt working is there any benefits they can claim? Any help with anything else? Even £100 a month makes a huge difference. What are they doing with their time? Could they earn money using swagbucks and other sites to earn points and then vouchers?

EssexHebridean

OK - just at a quick look:

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2000

Monthly Expense Details
Mortgage................................ 525
Secured/HP loan repayments.............. 122
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100 Is this over 10 months? If so remember you'll have Feb & March when that £100 can be paid across to debts
Electricity............................. 37.5 Read your meter in case you're in credit!
Gas..................................... 37.5 Read your meter in case you're in credit!
Oil..................................... 0
Water rates............................. 35 Look into having a meter fitted and you may save on this.
Telephone (land line)................... 17 Is this an "All in one" TV/Phone/Internet package? Are you still in contract? If not ring and barter them down a bit - I'm currently paying just under £40 for Sky - unlimited broadband, evening & weekend calls, line rental & TV - although that doesn't include sports or movies
Mobile phone............................ 34
TV Licence.............................. 13
Satellite/Cable TV...................... 34 See above
Internet Services....................... 0
Groceries etc. ......................... 700 Meal plan, shopping lists, cook from scratch, use what you have in fridge, freezer & cupboards. You can hammer this down!
Clothing................................ 50 Can probably be cut down to essentials only for a few months at least?
Petrol/diesel........................... 120
Road tax................................ 10
Car Insurance........................... 35
Car maintenance (including MOT)......... 17 Are you actually setting this aside each month? It doesn't seem like much to cover depreciation, servicing etc?
Car parking............................. 5
Other travel............................ 5
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30 This is quite high - if one of you is getting regular prescriptions check out Martin's guide to pre-paying.
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 15
Life assurance ......................... 28
Other insurance......................... 27
Presents (birthday, christmas etc)...... 30 Are you actually setting this aside every month?
Haircuts................................ 27 Can this be reduced at all at least for a few months?
Entertainment........................... 120 Can you think about reducing this at least a bit for a few months?
Holiday................................. 0
Emergency fund.......................... 0 Need to think about building this - seriously.
Total monthly expenses.................. 2189


Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 18000
Other assets............................ 0
Total Assets............................ 158000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 105770...(525)......4.49
Hire Purchase (HP) debt ...... 7268.....(122)......6.9
Total secured & HP debts...... 113038....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2000......20........0
Car Saving (bubble)............5000......170.......0
Total unsecured debts..........7000......190.......-


Monthly Budget Summary
Total monthly income.................... 2,000
Expenses (including HP & secured debts). 2,189
Available for debt repayments........... -189
Monthly UNsecured debt repayments....... 190
Amount short for making debt repayments. -379

Personal Balance Sheet Summary
Total assets (things you own)........... 158,000
Total HP & Secured debt................. -113,038
Total Unsecured debt.................... -7,000
Net Assets.............................. 37,962

Definitely not the worst we've seen - LOTS of wiggle room here. Things like clothes, haircut etc, I'd suggest you cut back as far as you can then review quarterly. The grocery spend I'll issue you a challenge - you've got £100 to see you through the remains of November...go on, I dare you!

redbreast

Thanks for your replies.
My friend is my mortgage broker and I trust his expertise. He reassured me that this is the cheapest money I can borrow at the moment, as well as being less per month than I'm paying now. As long as I concentrate on living well within my means and saving as much as I can I can overpay up to 10% on my mortgage payments and once the 3 years fixed rate is up I will decrease my term and pay more each month.
My partner does get a little money from benefits at the moment and he gives me £200/month but I am trying to work things out without this included just in case his circumstances change; hopefully they will soon, for the better.
I know I spend way too much on food etc. I shop at Ocado and get weekly Abel and Cole deliveries as well as the odd trip to Sainsbury's to fill the gaps. I like food and cooking. I do meal plan but I guess I must plan extravagant meals. I like to buy free range meat and try to eat exciting, healthy food (though I need to lose weight too so that's not going so well) so I can't see myself buying huge quantities of really cheap meat. I'm trying to think of yummy, healthy vegetarian meals so I can buy good meat only a few times a week.
I'll get there eventually... It just makes me sad that I can't have all the things and the lifestyle that I'd like

redbreast

Hi EssexHebridean, thanks for your reply.
My metre readings are up to date as of yesterday. I'm over £200 in credit but only reduced my DD slightly as I imagine it will go up over winter.
We have TV with Sky and Broadband and phone with Virgin; it worked out cheaper and better internet that way. I'm not sure it is now but my boyfriend is taking over the Virgin bill as I think £40/month is a bit much but he wants the better speed.
I didn't think I bought many clothes but I averaged my spending over the last 3 months and that's what I came up with :-/
Medical/dental and haircuts is again an average of my recent spending. It's worked out on if I have 6 monthly dental and hygienist check ups and if I get my hair cut & dyed every couple of months. Neither of which I'm very good at but I allowed for it.
I don't put anything for car maintenance, presents or house maintenance at the moment but I'd like to be saving each month so I don't have huge annual outlays.
Entertainment outlay has been quite big over the last few months as we went to London, theatre, restaurants etc. but will reign it in from now on!

andyfromotley

redbreast wrote: »

Well this is a bit scary...
My partner isn't working at the moment so I'm working out all our expenses on the minimum that I earn a month so anything he gets is a bonus. I'm a nurse so depending on the shifts I do I can earn up to £400 more than this but it seems sensible to work things out on the lowest income.
I've tried to be as honest as possible. I was surprised by some figures; like clothes etc, but I went through my last 3 months bank statements and these are the averages.

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2000

Monthly Expense Details
Mortgage................................ 525
Secured/HP loan repayments.............. 122
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 37.5
Gas..................................... 37.5 Pretty good for both of these but when did you last switch? Comparison sites should yield some savings.
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 17 About right if it icludes internet. Use MSE best buys as you can get it down. I pay £7 pcm with plusnet for phone and internet.
Mobile phone............................ 34 Are you on a contract? when is it up? When it is do not upgrade - switch to pay monthly from £8pm with 3.
TV Licence.............................. 13
Satellite/Cable TV...................... 34 - Unless you get your other spending under contro; you cannot afford £400 per year for sattelite tv.
Internet Services....................... 0
Groceries etc. ......................... 700 I am speechless at this. i note your comments about being a foodie but really? Two adults can eat well, really well on less than half of this. (and MUCH less if you really wanted to scrimp.) Head over to old style MSE board for tips.
Clothing................................ 50 I,m guessing that you could easily live without ANY new clothes for at least a year.
Petrol/diesel........................... 120
Road tax................................ 10
Car Insurance........................... 35 - Comaprison sites to drive it down at renewal.
Car maintenance (including MOT)......... 17
Car parking............................. 5
Other travel............................ 5
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30 i assume that this is mainly dental?
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 15 £360 is a lot. I pay £109 per year for a four bed house. Strip out any add ons and drive it down at renewal.
Life assurance ......................... 28 No kids? is this necessary?
Other insurance......................... 27 What is this?
Presents (birthday, christmas etc)...... 30 Who for?
Haircuts................................ 27
Entertainment........................... 120 You are currently overspending by nearly £400 each month but spend this each month on entertainment. Find free stuff to do.
Holiday................................. 0
Emergency fund.......................... 0 you need money in here. Build it up to £1000 until you are debt free. It stops emergencies becoming a credit problem.
Total monthly expenses.................. 2189


Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 18000
Other assets............................ 0
Total Assets............................ 158000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 105770...(525)......4.49
Hire Purchase (HP) debt ...... 7268.....(122)......6.9
Total secured & HP debts...... 113038....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2000......20........0
Car Saving (bubble)............5000......170.......0
Total unsecured debts..........7000......190.......-


Monthly Budget Summary
Total monthly income.................... 2,000
Expenses (including HP & secured debts). 2,189
Available for debt repayments........... -189
Monthly UNsecured debt repayments....... 190
Amount short for making debt repayments. -379

Personal Balance Sheet Summary
Total assets (things you own)........... 158,000
Total HP & Secured debt................. -113,038
Total Unsecured debt.................... -7,000
Net Assets.............................. 37,962

Hi red,

please see mu notes. I see your comments about extra shifts and contribution from your partner.

The good news is that you can easily resolve this by implementing the cuts listed above. With your 'extra' income you could shift it pretty quickly.

When your partner finds work you will switch into overdrive and have this debt gone in a flash and have the money for your balloon payment.

HOWEVER..... i suspect that you are generally just a bit rubbish with money and it comes in.. it goes out.... bits here and there. If you fancy something you'll buy it.... can always squeeze the money from somewhere or stick it on the credit card? A tenner here? A couple of coffees there?

Well my friend you need a budget! Myself and many others on here were in exactly your position and found that using a budget where every single pound you earn is accounted for as soon as you get it revolotionised our spending habits.

Tons of us on here use a budgeting program call 'YNAB' (you need a budget) but there are plenty of others about. Check it out, it worked for me, (and i like you was terrible with money!!) As of this second i have £463 in my current account. Big deal i hear you say! But i can tell you what every single pund of that is earmarked for. Can you do the same?

Stick around you will soon have this sorted.

thriftylass

redbreast wrote: »

I know I spend way too much on food etc. I shop at Ocado and get weekly Abel and Cole deliveries as well as the odd trip to Sainsbury's to fill the gaps. I like food and cooking. I do meal plan but I guess I must plan extravagant meals. I like to buy free range meat and try to eat exciting, healthy food (though I need to lose weight too so that's not going so well) so I can't see myself buying huge quantities of really cheap meat. I'm trying to think of yummy, healthy vegetarian meals so I can buy good meat only a few times a week.

That definitely does explain the 700 quid grocery bill. If cheap meat isn't your thing, could you go to your local butcher, will be cheaper than fancy meat from Ocado or Sainsbobs. Also despite what you think Aldi and Lidl (at least up here in Scotland) sell good quality fresh fruit and veg at a fraction of the price. Abel and Cole charge 2.10 for a squash and 1.50 for an iceberg salad!!! Really? As a cheaper alternative to your current shops again find a local green grocer (but beware of overpriced farm shops etc). For exotic ingredients and some meat find a halal or world food store. Again way cheaper than the little spice mixes in the supermarkets. So without reducing you food standards you could save at least half I would think.

Good luck on your journey.

BTW we did the same added 10000 to the mortgage when we remortgaged and actually took a year off and pay less monthly then before (fixed 4 years). As long as you do it the way you and I did I think it's fine. Your mortgage payments are very manageable they seem.