Soa

EssexHebridean

RAS wrote: »

You need to get your head round the fact that you cannot afford to replace the car every three years. It is not going to be an option to renew really.

That's my thinking - hence asking whether it will eventually become as asset or whether it's just a lease agreement. If it's just a lease - at the end of the three years it goes back, and the OP is left having to find money for a replacement...as things stand even assuming that they have been able to keep up the payments in the meantime (by no means certain) renewing will not be feasible.

theoretica wrote: »

You are currently spending about £1800 a year on that car,...

Is it not more than that? I understood that the HP payment at £134 was for the car as well - apologies if I've read that wrong....

PS - I used to do the "renew my car every three years" thing too - although the car concerned was bought outright by me using a loan. No way would I ever have done the "lease" thing as it's just throwing money away, in my view as you end up with nothing to show for it. Then my income dropped - dropped by about 2/3rds, initially, and is now back to around 50% of where I was "way back when" - as a result my current car - which I have indeed owned from brand new - 30 delivery miles on the clock - is exactly 8 years old today. Yes there are ongoing depreciation costs, but a decent car *shouldn't* break the bank to run if taken to a decent (not main dealer, but recommended local) garage. We set aside £155 a month to run both of ours - that's everything excluding fuel. Tax, insurance, tyres (on 12k miles per year i get about 18 months out of a set so I'd say your three years might be optimistic - remember that just because the car doesn't have to have an MoT yet it still needs to be road-legal!) servicing, minor extra repairs, screenwash, new wiper blades, insurance, MoT test...the lot, basically. I'd LOVE to still have a beautiful shiny new toy every three years, but my circumstances no longer allow it and I had to accept that as I wasn't prepared to see myself in debt to fund something totally unecessary.

EssexHebridean

lambda wrote: »

Yes, and I can assure that buying a brand new car and renewing it every 3 years is going to be way more expensive than keeping the car and maintaining it over a long period, or buying a second hand car and maintaining it.

You currently spend £5364 every three years (149 * 12 * 3), with no car to show for it.
My car is 11 years old, it has 107,000 miles on it, I have spent about £1800 in 4 years on repairs on it (including MOT, tyres, brakes and servicing), that's £37.5 a month for 4 years to own and fully maintain a car; that's a lot cheaper. I also own the car outright. Also, new cars depreciate at an insane rate and you still have to buy tyres and service the thing. I would consider at the end of the 3 years either trying to keep it or buying a car that is older and think about maintaining it.

Servicing is apparently included in the agreement according to the OP - which is what makes me think it might be a lease rather than an actual purchase agreement. If someone wants to work that way, and can fund that sort of lifestyle, that's ace, and good luck to them...it's when they can no longer afford it that the problems start.

meer53

How are you planning on paying off " a chunk" of your 0% credit card ? You have a defecit at the moment so where will this money come from ?

I could shop for just me on £25 a week easily, possibly less, even with wine ! Try Aldi/Lidl if you don't already shop there. I'd also suggest getting a part time job, at least until you have paid off the credit card and car. Maybe go without a holiday next year, we only go away when we can afford it, even if it seems to be a cheap holiday.

How much equity is in your property ? Is it worth selling and downsizing ? I know i'm going to struggle when i retire, i'm in a similar position but i have a lot of equity, i'm planning on selling my house to fund my retirement. I'm looking forward to it in a funny way, it will be like starting again !

I hope you manage to make the changes you need to, you seem to be taking action quickly to sort it out so if you take some of the advice offered you should be ok. Good luck x

ViolaLass

I know this question comes a little unhelpfully late but out of interest OP, did you do these calculations before deciding to retire?

lambda

If the car is on HP you can usually just hand it back to the finance company with nothing more to pay. Check the terms and conditions of the agreement. I would seriously consider this.

I think also downsizing your property to release equity is a good move. Is that possible?

lambda

EssexHebridean wrote: »

s it not more than that? I understood that the HP payment at £134 was for the car as well - apologies if I've read that wrong..../QUOTE]

Good point I have no idea. Can the OP please clarify the difference in the SOA between the HP and the car loan repayments? Is the car repayment on a HP agreement?

Brightspark87

Hi lots of great words of advice.

Honestly, if you want to car etc then you will need to earn more income. Sorry to be rude but its true!

I know you are retired but don't forget bus pass for free travel, heating allowance and your state pension all coming soon if not with you already.

Do you know about your state pension? Are you claiming it already? If not when how much etc? If you need to know how much then fill out a BR19 form.

It may be that you only need to increase your income for the next few years until that kicks in.

With regards to food and wine - I was the same. However, since moving on to Aldi (Piont Nior from there is proper lush and £4.39 a bottle!) I honestly have saved a fortune. Also, sainsburys waitrose etc can have really great offers like they do at the moment buying 6 or more bottles and save 25%.

As for golf, both myself and husband play but we pay as you play and try to play at the cheapest times and with the driving range buy a card for 1000 balls at once and then nip up now and again to have a 'cheap' evening play around with 50 or so each. Its a great way to stay active!

With the increasing income, why not try and get a job in a golf club or supermarket where the discount will benefit you as well as the paid income!

Good luck

enthusiasticsaver

petsitter2000 wrote: »

Hi, I'm new to this forum. My income has gone down quite a lot due to retirement and I need help to live within my means.

Thanks in advance.


Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 0.00
Income from Self Employment (before tax). . . . . . . . . . . . . . . . . . . . 0.00
State Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Pension / Annuity Payout. . . . . . . . . . . . . . . . . . . . . . . . 1,416.67
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 0.00
Income From Savings & Investments . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gifts From Family / Friends . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Monthly Expense Details

In Your Home

Mobile phones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
TV licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.12
Internet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.50
Home phone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cleaning products/Cleaner . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Garden maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Household maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.33
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Council tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.00
Overdraft cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Bank account fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Home insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524.00
Plumbing/Boiler cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage payment protection . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Food and household shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 333.67
Drinks for home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86.67

Motoring & Public Transport

Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88.96
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.00
Car maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Rail/Buses/Taxis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Breakdown cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Debt Repayments

Credit card repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200.00
Hire purchase repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 134.00
Personal loan repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car loan repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149.00

Savings & Investments

Pension payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Buying shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cash ISAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Lump sum saving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Regular saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Family

Pet food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School meals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pocket money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Nappies/Baby extras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Laundry/Dry cleaning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Children's travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Baby-sitting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Childcare/Playgroups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Travel insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Entertainment

Satellite/Digital TV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family days out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cinema/Theatre trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Books/Music/Films/Computers . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big days out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Shopping for fun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Hobbies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
IT/Computing (antivirus, etc) . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
DVD rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Drinking out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Eating out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Clothes, Health & Beauty

Complimentary therapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Optical bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.17
Beauty treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Healthcare cash plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dental insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private medical insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Fitness/Sports/Gym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Work clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New children's clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00

Education & Courses

University tuition fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Your courses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Big One-Offs

Funeral expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Wedding expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Sofa/Kitchen/TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.67
Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Winter holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Summer holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.33
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Odds & Sods

Newspapers and magazines. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Tax & NI Provisions (self-employed only). . . . . . . . . . . . . . . . . . . . 0.00
Regular charity donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Meals at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Smokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Coffees/Sandwiches/Snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00


Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,416.67


Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,955.42

As you have a £500+ shortfall each month this is not sustainable in the long run. You can reduce the clothing, food, drink and petrol budget but at best the savings from this will be around £250-£300 each month. My suggestion is that you downsize to clear or at least reduce your mortgage if possible or take in a lodger. Do you need the car or is public transport possible.

Your best friend in your situation is a budget. Allow yourself a bottle of wine a week say as a treat. We only open one on a Friday and it lasts us as a couple until Sunday. Discover some free treats as an alternative to your expensive golf - ie rambling, the library and see if there are pensioner deals on swimming at your local council run pool. Are you old enough yet for a free bus pass? Make sure you are claiming everything you are entitled to - winter fuel allowance, (probably not free tv licence yet) and any special deals on meals for retired people. The national trust is quite reasonable to join (I pay £5 per month) and that gives you access to lots of places to visit as I am assuming you wish to enjoy your retirement even though you are on a shoestring.

The ironic thing is that your pension is not that bad (when does your state pension kick in?) but you have not reduced your outgoings before retiring. If you could just get rid of the debt and the mortgage it would make it much more doable and just emphasizes the importance of preparing for retirement both financially and emotionally. Of course your divorce probably threw a spanner in your life plans but it is much better for you to address your shortfall now rather than try and carry on just getting further and further into debt. Did you receive a lump sum?

enthusiasticsaver

Just as an aside your debt including your mortgage is more than 71% of your income so addressing that is a priority. The rest of the savings is tinkering around the edges.

You have made a good start by reducing the food and drink on a monthly basis but I cannot honestly see how you can make ends meet without either selling up (are you in a house or flat and is there much equity?) or going back to do some part time work at least. As others have said, ditch the car.

petsitter2000

Hi, thanks for all the replies. Hope I have addressed everything below.



UrbanDancer
My total cc debt is 14k
The loan that says car loan £149 is not a car loan its just a loan. There are 3 more yrs to run on it.
My actual car payment £134 per month is for my car which can be given back after 3yrs, I can refinance or walk away. (this car albeit new is just a little 1.0 Fiesta) I pay no rd tax, the insurance is dirt cheap, the deal includes servicing and roadside assistance.
The last car I bought from new and kept for 7yrs but ended up paying a fortune in repairs.
Meer53
I am hoping that I don't have to get a job just yet. But if I have to I will.
I can't downsize as my house is in slight negative equity.
A lodger is a distinct possibility though. That would raise £300 per month at a very conservative estimate.
ViolaLAss
" I know this question comes a little unhelpfully late but out of interest OP, did you do these calculations before deciding to retire?"
Clearly not! But am loving this site and hope to become an avid moneysaving expert!
Brightspark87
I'm not old enough for state pension, bus pass and heating allowance and I can't claim any benefits.
I went to Aldi today for the first time ever and bought a ton of stuff thinking I had spent about £50! My actual bill only came to just under£25. I'm amazed! Its Aldi from now on all the way.
Enthusiasticsaver
I'm not a Pensioner yet. I'm 55. Yes my divorce threw a large spanner in my life plans.
I do need a car.
I did receive a lump sum of £43k I am going to pay this toward my mortgage then it will only be £100k.
Again, thank you for all the helpful suggestions. I really do appreciate it.
PS