SOA first draft - comments welcome

knightley

So I've done my SOA, this is work in progress as I'm sure I forgot things... and apart from bills, spending amounts are not actuals, but where I want them to be - so planned spending. Amounts are rounded up to some extent. Comments much appreciated. My plan is to clear my debt completely by the end of 2016 (with the help of yearly bonuses). Thank you.

[tt]Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 3000 *this is all net income, incl child support and child benefit, not including yearly bonus as that is destined to paying off debt
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3000

Monthly Expense Details
Mortgage................................ 1000
Secured/HP loan repayments.............. 0 *thankfully none
Management charge (leasehold property).. 85 *this includes building insurance and ground rent
Council tax............................. 100
Electricity............................. 40
Gas..................................... 30
Water rates............................. 30
Telephone & Internet ................... 35 *this is Sky and it includes line rental, contract until late 2016
Mobile phone............................ 25 *contract until early 2017
TV Licence.............................. 13
Satellite/Cable TV...................... 7 *this is Amazon Prime
Groceries etc. ......................... 250
Clothing................................ 100
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Travel card ............................ 125
Childcare/nursery....................... 250 *wraparound childcare and holiday clubs
Other child related expenses............ 100 * school lunches, piano, dance, swimming
Medical (prescriptions, dentist etc).... 10
Buildings insurance..................... 0 * included in management charge
Contents insurance...................... 10
Life assurance ......................... 0 *provided as a work benefit
Other insurance......................... 35 *this mortgage unemployment insurance
Presents (birthday, christmas etc)...... 25
Haircuts................................ 25
Entertainment........................... 50
Holiday................................. 50 *this one is low as holiday spend is much higher usually BUT in 2016 we're not doing any holiday except for August when we're staying at my parents and flights are already paid for. So it should be more than enough for 2016.
Emergency fund.......................... 25 *this account is empty, but I need to start somewhere...
Miscellaneous........................... 50 *this is for some stuff I probably forgot, need to check my bank accounts... but also for unexpected stuff (not emergency)
Web hosting............................. 5 *this is for a hobby
Child uni savings....................... 25* I'd really like to increase this one
Total monthly expenses.................. 2500


Assets
Cash.................................... 0
House value (Gross)..................... 365000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0 *I have not included pension pot
Total Assets............................ 365000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 200090...(1000).....2.64 *this is ouch
Total secured & HP debts...... 200090....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Tesco & MBNA CC ...............11650.....117.......0 *ouch again
Total unsecured debts..........11650.....117.......-


Monthly Budget Summary
Total monthly income.................... 3,000
Expenses (including HP & secured debts). 2,500
Available for debt repayments........... 500*this is my target for 2016, to pay £500 each month.
Monthly UNsecured debt repayments....... 117
Amount left after debt repayments....... 383

Personal Balance Sheet Summary
Total assets (things you own)........... 365,000
Total HP & Secured debt................. -200,090
Total Unsecured debt.................... -11,650
Net Assets.............................. 153,260

[/tt]

EssexHebridean

knightley wrote: »

So I've done my SOA, this is work in progress as I'm sure I forgot things... and apart from bills, spending amounts are not actuals, but where I want them to be - so planned spending. Amounts are rounded up to some extent. Comments much appreciated. My plan is to clear my debt completely by the end of 2016 (with the help of yearly bonuses). Thank you.

[tt]Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 3000 *this is all net income, incl child support and child benefit, not including yearly bonus as that is destined to paying off debt
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3000

Monthly Expense Details
Mortgage................................ 1000
Secured/HP loan repayments.............. 0 *thankfully none
Management charge (leasehold property).. 85 *this includes building insurance and ground rent
Council tax............................. 100
Electricity............................. 40
Gas..................................... 30
Water rates............................. 30
Telephone & Internet ................... 35 *this is Sky and it includes line rental, contract until late 2016
Mobile phone............................ 25 *contract until early 2017
TV Licence.............................. 13
Satellite/Cable TV...................... 7 *this is Amazon Prime
Groceries etc. ......................... 250 If you wanted to make savings you could take £100 off this easily enough
Clothing................................ 100 Every month?!
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Travel card ............................ 125
Childcare/nursery....................... 250 *wraparound childcare and holiday clubs
Other child related expenses............ 100 * school lunches, piano, dance, swimming
Medical (prescriptions, dentist etc).... 10
Buildings insurance..................... 0 * included in management charge
Contents insurance...................... 10
Life assurance ......................... 0 *provided as a work benefit
Other insurance......................... 35 *this mortgage unemployment insurance
Presents (birthday, christmas etc)...... 25
Haircuts................................ 25
Entertainment........................... 50
Holiday................................. 50 *this one is low as holiday spend is much higher usually BUT in 2016 we're not doing any holiday except for August when we're staying at my parents and flights are already paid for. So it should be more than enough for 2016.
Emergency fund.......................... 25 *this account is empty, but I need to start somewhere... So you're not currently setting this aside?
Miscellaneous........................... 50 *this is for some stuff I probably forgot, need to check my bank accounts... but also for unexpected stuff (not emergency)
Web hosting............................. 5 *this is for a hobby
Child uni savings....................... 25* I'd really like to increase this one
Total monthly expenses.................. 2500


Assets
Cash.................................... 0
House value (Gross)..................... 365000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0 *I have not included pension pot
Total Assets............................ 365000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 200090...(1000).....2.64 *this is ouch
Total secured & HP debts...... 200090....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Tesco & MBNA CC ...............11650.....117.......0 *ouch again
Total unsecured debts..........11650.....117.......-


Monthly Budget Summary
Total monthly income.................... 3,000
Expenses (including HP & secured debts). 2,500
Available for debt repayments........... 500*this is my target for 2016, to pay £500 each month.
Monthly UNsecured debt repayments....... 117
Amount left after debt repayments....... 383

Personal Balance Sheet Summary
Total assets (things you own)........... 365,000
Total HP & Secured debt................. -200,090
Total Unsecured debt.................... -11,650
Net Assets.............................. 153,260

[/tt]

Assume you're just looking for where small savings can be made to add to your already reasonable amount surplus for debt repayments?

The two things that stand out to me are your clothing spend which is very high indeed, and also your food. The other thing that set alarm bells ringing is that there is £25 included on the SOA for emergency fund but you say the account is currently empty - this begs the question as to where all the extra the SOA says you should have is going. Do you currently have £383 a month left over and spare in your account at the end of each month? If not, you need to think about where that's going.

If it were me, I'd start a spending diary as a first thing, to see exactly where the money is going. I'd also aim to knock that groceries bill down by £100 a month and also cut out buying clothing aside from essentials for a few months. The next two months set aside £500 to the emergency fund, then reduce that monthly amount to £25 as you've planned and start throwing everything you can at the debt.

An alternative way of doing it as your CC is currently at 0% is to throw every spare penny into an ISA and continue with just the minimum payment to the card until the 0% is up - that way the money you're setting aside to pay the debt will be earning interest for you in the meantime. Do make sure you remember when the 0% is finishing though, and pay in good time, and this method will only work if you have the self discipline to leave the money sitting there!

knightley

Thanks!

Re groceries, I'm including all food and toiletries there, work lunches as well - which I've recently started to bring from home. I'm not sure how I can possibly cut more...

On clothing - it's for both me and my child and it includes school uniform. It does seem high, so will check spending there and possibly shift some budget to emergency, perhaps £25 of it).

Re emergency (and holidays and presents fund) - I have not contributed so far at all - but plan to do so.

Just to clarify, all bills and regular spending (childcare etc) are actual amounts, but the spending is just my estimate/attempt at budgeting.

knightley

EssexHebridean wrote: »

where all the extra the SOA says you should have is going. Do you currently have £383 a month left over and spare in your account at the end of each month? If not, you need to think about where that's going.

If it were me, I'd start a spending diary as a first thing, to see exactly where the money is going. I'd also aim to knock that groceries bill down by £100 a month and also cut out buying clothing aside from essentials for a few months. The next two months set aside £500 to the emergency fund, then reduce that monthly amount to £25 as you've planned and start throwing everything you can at the debt.

An alternative way of doing it as your CC is currently at 0% is to throw every spare penny into an ISA and continue with just the minimum payment to the card until the 0% is up - that way the money you're setting aside to pay the debt will be earning interest for you in the meantime. Do make sure you remember when the 0% is finishing though, and pay in good time, and this method will only work if you have the self discipline to leave the money sitting there!

The "extra" money went to overdraft and CC debt - however I was doing it the wrong way. Not budgeting, making CC payments that were too high at pay date, then running into overdraft again.

Yes you are right, that is what I need to do, record all spending in a diary or app.... and budget, and ensure I don't go into OD again (this is actually the first month when I didn't).

Regarding ISA and savings, it would be a good option except my fixed mortgage rate ends mid next year and my goal was to bring credit card debt to £5K by end of July - so that I don't have too much debt at the time of switching to a new deal/remortgaging.

My credit card 0% rate ends May 2017 and I hope to pay off all debt way before that (goal is Dec 2016).

EssexHebridean

The method I was suggesting with the ISA will make no odds to the level that the debt will be at by then - if it's at 0% simply save everything you can to an ISA between now and July, then take out all bar your £1k emergency money and whack against the CC's. The amount you're paying off will then be boosted by the interest earned on the money while it's sat in the ISA for 7 months - see? You're paying the same amount in the long run, it's just it's working for you in the meantime.

Food - all I'll say is that there are two of us in my household as well - MrEH is a sizeable chap with a large appetite, and we budget £150 a month for food, and all cleaning materials, plus the basic toiletries...we eat good quality and cook from scratch - the only food that isn't included in that is the odd meal out or takeaway. Taking lunches from home is definitely a winner!

Budgeting is the way forwards - well done for working towards it! :T

knightley

Thanks. Yes I know it makes sense to put it in ISA and get some interest on it but I also know myself. I've done that before and I ended up going on holiday with savings and the CC was left unpaid. By paying CCs off and closing them I just feel 'safer' and less tempted... not sure if it makes sense to you.

I'll look at my food bill... once I start tracking expenses it will prob be clearer if I can cut or not. As of right now I just cut work lunches, packed makes a difference.