SOA Help

standing_at_the_edge

Hi all,

I'm looking for some critical help on my SOA. I am struggling with a high level of debt, high over heads, and a highish, but not sufficient income. I've got 5 children, aged 9, 10, 11, 16 & 17, all girls, and lots of clubs and trips to finance on top of keeping a roof over their head. We don't have any assets to speak of and only have the one income at present. We are in the process of moving house to a smaller and more economical place that we can squeeze into (rented).

Appreciate any thought on cost savings (or where people feel I have underestimated costs) (vehicle costs are fairly high as we live in the highlands and everywhere is about 30 miles away with little in the way of public transport) & internet/TV/Phone is all rolled into a single account. Mobile is high as each of the kids has a mobile (a luxury I know but allows them to contact us when needing picking up and for safety).

Thanks in advance

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 5
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 4506
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 425
Total monthly income.................... 4931

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 388.7
Rent.................................... 750
Management charge (leasehold property).. 0
Council tax............................. 132
Electricity............................. 100
Gas..................................... 20
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 12.6
Satellite/Cable TV...................... 0
Internet Services....................... 30.49
Groceries etc. ......................... 650
Clothing................................ 150
Petrol/diesel........................... 303
Road tax................................ 23
Car Insurance........................... 56
Car maintenance (including MOT)......... 150
Car parking............................. 20
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 20
Life assurance ......................... 60
Other insurance......................... 5
Presents (birthday, christmas etc)...... 100
Haircuts................................ 50
Entertainment........................... 100
Holiday................................. 50
Emergency fund.......................... 100
Total monthly expenses.................. 3350.79


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 4000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 5710.....(388.7)....28.3
Total secured & HP debts...... 5710......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Granite........................3423......169.......30.4
Halifax........................3610......97.6......25.95
Lloyds.........................2813......62........14.94
Barclays.......................7885......177.......17.43
Total unsecured debts..........17731.....505.6.....-


Monthly Budget Summary
Total monthly income.................... 4,931
Expenses (including HP & secured debts). 3,350.79
Available for debt repayments........... 1,580.21
Monthly UNsecured debt repayments....... 505.6
Amount left after debt repayments....... 1,074.61

Personal Balance Sheet Summary
Total assets (things you own)........... 4,000
Total HP & Secured debt................. -5,710
Total Unsecured debt.................... -17,731
Net Assets.............................. -19,441

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using other browser.

Bouncybubbles

Welcome others will be much better at this than me but just a couple of things i have noticed
1. £150 a month for car mainatence? that seems high?
2.£650 a month for food seems incredibly high although where you shop may of course be affected by your location
3. do you still have over £1000 left every month? are the debts credit cards or loans?

Pixie5740

Even though there are 7 of you there are a couple of areas you could shave a little bit of money off such groceries and whatever tv over and above the tv licence you are paying for. Car maintenance does seem high but if you are living somewhere fairly remote in the Highlands then it's a good idea to overestimate this as you don't want to without a car.

Do you really have £1,074.61 left over each month? If so then by snowballing your debts you could be debt free in a little over a year without having to cut back on anything in your SOA.

http://www.stoozing.com/calculator/snowball-calculator.php

FBaby

Other child related expenses............ 0

Are you sure, you say you pay a lot for clubs and trips, did you put that elsewhere? Have you taken into account their school lunches, books, sport wear or music instruments, pocket money and the rest?

My kids are 13 and 16 and despite not being spoilt in any way, there is always a need for money. DD did DoE last year, NCS this year, went for a job interview so needed new shoes (as only had sport of her grotty school ones). Then I needed to pay for a new swimming costume and googles because of PE GCSE and three revision books. Then today, DS asked for £5 as his contribution to hiring a football pitch and for a cool drink. There seem to be things like this weekly and it certainly amounts quickly, so can imagine it certainly does for 5!

Happier_Me

I would concentrate first on working out where the £1,000 + your SOA indicates is available for debt overpayment each month is going.

I would look to see if you can shift some or all of your debt onto interest free cards to reduce the interest you are paying each month too.

19lottie82

£1200 a year for birthday presents and Christmas costs for 5 kids and other friends / family. Are you sure this is all you spend?

£50 a month for holidays? What is this?

If you're saving £100 a month into an emergent fund, why do you have £0 under cash assets?

getmore4less

I think a spending diary and a review of the last 12 months might highlight somethings missing or under estimated on the SOA because as it is there is a decent surplus to nail this fairly quickly.

Is this rent the new rent in the smaller space maybe some of the surplus is from that what did it look like before?

If this is the higher rent and it is going down then the review/diary is going to be a valuable tool to understand where the money is going.

enthusiasticsaver

I am guessing this is your desired rather than actual soa and do you actually have £1074 left? How did the debt arise in the first place?

uncreative

I can offer a real bit of advice here - you and I sound pretty close in terms of circumstances. I too am a high earner and OH doesn't work (in paid employment that is!!) to look after 3 kids (ok - not 5 like you but still a challenge). We were renting too and we had about £38k of debt.

The one thing that you and your OH have to do is start budgeting. Trust me, nothing else I tried seemed to make a dent. The philosophy of YNAB has literally transformed our lives - it is that profound.

Me and OH have pretty much the same cost base as you guys in terms of house, bills etc.

I notice that you have savings for holiday fund, emergency fund etc.. but are these in the bank?

You need to look at the principals of YNAB. Its a change and takes a bit of time to get your head around it but it is so much better.

From the second month after starting it we have had AT LEAST £1,000 a month added to savings pot. We managed to buy a house 10 months after starting it, and now have a decent cash buffer building up and are debt free.

Its all in the upfront planning each month. Here's what we will do TODAY for April:

Total time is 45 minutes.

1) sit with OH and roll forward the budget from March into April in YNAB
2) we will look at areas where we overspent in March and adjust April if required
3) we will take into account any 1 off large items - such as our car tax is up and needs paid on 1 April, and this month will take a bit more planning as its the school holidays and we need to do a budget for clubs, activities etc.. and add them all to the budget
4) we will set our goals for the April Grocery Challenge (£150 per week, say)
5) we will then lock down our budget and the excess becomes our savings for the month (this gets moved into savings literally on pay day to remove any temptation to spend it!)
6) we will do a meal planner to cover the first 2 weeks in April and this will become our shopping
7) we will look in the cupboards and see if anything that is longer term is running out

If you do that routine at the start of every month it makes such a huge difference. It should take a maximum of an hour, the hardest part is starting it.

You should put the debt into the snowball calculator, start properly budgeting and get control of your finances. Based on your income and level of debt it is possible for you to turn this around in 12 to 18 months.

enjoyyourshoes

Reconcile your bank account balance every day with all purchases/DD/SO credit card payments.


Save for annual , 1/2 yearly bills etc (transfer money calculated to cover these into highest interest bearing account)


Don't pay for insurances etc monthly as pesky banks get you with credit charges (interest)


Produce excel spreadsheet to plan how to pay off CC starting with the highest % age APR but also taking into account any discounted APR's and what date they may increase. (if you can transfer to 0% ensure you don't ever use the card and can pay off it in full before the 0% finishes)


Discuss monthly with partner where you are both up to with your financial objectives


Radically over hall/challenge/question all costs/expenditure/DD/SO/Bill etc and use MSE to get best deal or live without (its amazing what one does not really need !)

You are both overspending, so the simple (but surprisingly difficult) thing to do is stop spending ! This will need plenty of discussion, negotiation and pain, but to get a clear (jointly agreed and committed to) financial objective is paramount.


Great and good luck keep the communication and clarity going between the two of you as this can scupper things easily

andyfromotley

standing_at_the_edge wrote: »

Hi all,

I'm looking for some critical help on my SOA. I am struggling with a high level of debt, high over heads, and a highish, but not sufficient income. I've got 5 children, aged 9, 10, 11, 16 & 17, all girls, and lots of clubs and trips to finance on top of keeping a roof over their head. We don't have any assets to speak of and only have the one income at present. We are in the process of moving house to a smaller and more economical place that we can squeeze into (rented).

Appreciate any thought on cost savings (or where people feel I have underestimated costs) (vehicle costs are fairly high as we live in the highlands and everywhere is about 30 miles away with little in the way of public transport) & internet/TV/Phone is all rolled into a single account. Mobile is high as each of the kids has a mobile (a luxury I know but allows them to contact us when needing picking up and for safety).

Thanks in advance

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 5
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 4506
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 425
Total monthly income.................... 4931

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 388.7
Rent.................................... 750
Management charge (leasehold property).. 0
Council tax............................. 132
Electricity............................. 100
Gas..................................... 20
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 12.6
Satellite/Cable TV...................... 0
Internet Services....................... 30.49 A bit high, most people can get it for around £15
Groceries etc. ......................... 650
Clothing................................ 150
Petrol/diesel........................... 303 Do you have to live in the middle of nowhere? You are paying quite a premium to do so
Road tax................................ 23
Car Insurance........................... 56 high ish drive it down at renewal
Car maintenance (including MOT)......... 150 This cannot be right
Car parking............................. 20
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0 With 5 kids you must have missed stuff in here
Medical (prescriptions, dentist etc).... 0 Nothing? Ever??
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 20
Life assurance ......................... 60
Other insurance......................... 5
Presents (birthday, christmas etc)...... 100
Haircuts................................ 50
Entertainment........................... 100
Holiday................................. 50 (Bravo)
Emergency fund.......................... 100 Stop when you get £1k i.e after one month of all of your surplus
Total monthly expenses.................. 3350.79


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 4000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 5710.....(388.7)....28.3
Total secured & HP debts...... 5710......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Granite........................3423......169.......30.4
Halifax........................3610......97.6......25.95
Lloyds.........................2813......62........14.94
Barclays.......................7885......177.......17.43
Total unsecured debts..........17731.....505.6.....-


Monthly Budget Summary
Total monthly income.................... 4,931
Expenses (including HP & secured debts). 3,350.79
Available for debt repayments........... 1,580.21
Monthly UNsecured debt repayments....... 505.6
Amount left after debt repayments....... 1,074.61

Personal Balance Sheet Summary
Total assets (things you own)........... 4,000
Total HP & Secured debt................. -5,710
Total Unsecured debt.................... -17,731
Net Assets.............................. -19,441

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using other browser.

See my annotated comments. This needs a bit of rejiggling.

However if broadly accurate then you are in a good position if things stay the same. Use the snowball method and kill those debts.

If the problem is that you dont have £1k spare then you have a budgeting problem. As above I agree that Ynab will solve this for you.

Once you kill these debts you can then save hard for a house(if applicable) car replacement and kids university expenses.