Money problems - HELP please - what can I do?

EssexHebridean

Comments in red...

Jay442 wrote: »

Thanks everyone again for the advice, I've been pretty busy so only had chance now to go through the SOD, I would call it a draft SOD as I need to go through it with my partner who can no doubt correct me on a few things. I'm obviously going wrong somewhere because according to this we should have some money left over! Start a spending diary - this shows you where your money is really going, the SOA just shows you the theory of what *should* be happening!

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary Amount(£)
Total monthly income 2,670.98
Monthly expenses (incl. HP & secured loans) 2,232.12
Available for debt repayments 438.86
UNsecured debt repayments 0
Amount left after debt repayments 438.86
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 2,000
Total Secured & HP Debt -0
Total Unsecured Debt -0
Net Assets 2,000
Household Information

Number of adults in household 2
Number of children in household 2
Number of cars owned 1
Income, Expense, Debt & Asset Details

Income Amount(£)
Monthly income after tax 2240.98
Partners monthly income 0
Benefits 430
Other income 0
Total monthly income 2670.98
Expenses Amount(£)
Mortgage 0
Secured/HP loan payments 0
Rent 825
Management charge (leasehold property) 0
Council tax 99.12
Electricity 23
Gas 23
Oil 0
Water Rates 40
Telephone (land line) 18
Mobile phone 16
TV Licence 12
Satellite/Cable TV 0
Internet services 12
Groceries etc. 400 Yes you can definitely get this down - no question. Start by knocking £100 a month off, meal plan, and write and shop to a list. Try to avoid top-up shops.
Clothing 100 If you'#re struggling this is an easy way to cut your expenditure -do you REALLY need to be spending over 1k a year on clothes?
Petrol/diesel 50
Road tax 15
Car Insurance 11
Car maintenance (including MOT) 20 Are you actually setting this aside?
Car Parking 10
Other travel 30
Childcare/nursery 80
Other child related expenses 60
Medical (prescriptions, dentists, opticians etc.) 50 If this is for prescriptions consider a pre-paid certificate?
Pet Insurance/Vet bills 0
Buildings Insurance 0
Contents Insurance 12
Life Assurance 0
Other Insurance 0
Presents (birthday, christmas etc.) 60 £720 a year on presents is a fair old chunk out of your budget. It's lovely to be able to buy things for people, but sometimes your own financial wellbeing has to come first.
Haircuts 6
Entertainment 200 Again you can consider cutting this back a wee bit if expenditure is tight.
Holiday 60
Emergency Fund 0 You need to prioritise building this up. Aim for £1000 for a start.
Total monthly expenses 2232.12
Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 0 (0) 0
Secured & HP Debt totals 0 - -
Unsecured Debt Description Debt(£) Monthly(£) APR(%)
Unsecured Debt totals 0 0 -
Asset Description Value (£)
Cash 0
House Value (Gross) 0
Shares and bonds 0
Car(s) 2000
Other assets (e.g. endowments, jewellery etc) 0
Total Assets 2000

Spending diary is a priority - as is bringing your budget in line with the above which I presume it's not currently. You're showing £20 a month for car maintenance but no cash asset so where is that money going? Ideally in the long term aim towards being able to pay your car insurance and road tax up front - to do this you need to work out some realistic annual costs and then divide by 12 and start setting that amount aside every month. There is a good saving to be had by paying insurances in particular up front. (And home contents is a good one to start with there, too - you should be able to get that for under £100 so set your sights on that).


You asked about money saving resources earlier in the thread - 2 on catch-up TV for you - Eat Well for Less and Right on the Money - both come up with some brilliant ideas and are well worth a watch.

Jay442

Thanks for the tips!..

I think personally the spending diary is going to be a bigger help, then to do a more thorough SOD, there's no way we spend £720 a year on presents, I guess I'm just trying to balance out with other expenditure we have that isn't shown in that list, you know, the odd £4 magazine for my daughter, the odd bunch of flowers for my partner, I understand that's it's the odd things that need to be cut so important that I sit down with my partner and allocate our monthly income with everyrthing that is necessary. I am honestly looking at that list and seeing things, like £100 a month of clothes which I know isn't really true but then last month it was as we needed some things, school clothes etc, necessary things.

I know for a start that I can make my lunch at home and bring it in, lunch normally costs £3 a day, so at most £60 a month.. or £720 a year!.. sounds a lot more when it's put like that - though in truth it's not as much as I still need to buy food to prepare..

Jay442

I said in my first message that I went to a bank manager who advised me to open a new 'clean' account that hasn't got an overdraft facility, that account would be my 'living' account and the other one would just contain the overdraft and I would try monthly to reduce it. I've decided that is costing me money so is pointless, as normally my salary would clear it and for at least those days I'm in plus I wouldn't be charged, with an account that has an overdraft I will be being charged daily - unless I'm wrong it would seem like crap advice.. right?

Anyway, I thought I could still make use of the 2nd account, possibly use it only for food and general day to day payments, therefore budgeting for what we need in there and only having that available, does that sound sensible?..

Anyone who might also be able to help with my query about the crediit card, I didn't really want to open a new thread

lhead123

Jay442 wrote: »

If anyone has any comments on my 'draft' SOD that would be appreciated.

I've been looking into putting my 1800 overdraft onto a credit card, or at least half of it onto a 0% interest credit card, I checked which ones I'm eligible for but I don't really know what I'm looking for with the small print etc, any tips?.. is it possible for me to put images into the thread, I was going to put in a few screengrabs with the results of that search - this was the text for the top one in the results:

MBNA - up to 40 months 0%, 2.79% fee
LONG 0% BALANCE TRANSFER CARD
Is this card right for you?
Will you be pre-approved? For this card our eligibility calculator can tell people if they're pre-approved; that means subject to ID and fraud checks you'll definitely get the deal offered. If you get a 100% chance, acceptance is yours.Balance transfer length & fee: Up to 40 months, 2.79% feeMinimum payment: Greater of 1% of balance plus interest, or £25 Min income: N/A | Card issuer: Visa | Balance transfer time limit: First 60 daysWill I definitely get the full 0%? This card is an 'up to' card, meaning that some will get fewer months at 0%, or a higher fee/interest rate. However, if you're shown as pre-approved, you will get the exact deal shown. A nonsense piece of regulation means we have to tell you if you were to spend £1,200 at an annual interest rate of 18.9% (variable) your Representative APR would be 18.9% (variable).

You can't use a balance transfer to 'move' an overdraft as that's just for credit card -> Credit card transfers.

You want to look for a money transfer card with a 0% deal (Tesco have one that you can't do the eligibility check on mse for, or there's a brilliant virgin one too among others). These allow you to transfer the cash into your overdraft account and pay it off.

Alternatively you can get a 0% on spending card, and use that for all of your spending. You then move the equivalent amount of money in your current account into the overdraft.

Hope that makes sense.

Jay442

Sorry that's what I mean, not to move the overdraft but to pay it with the card - the bank manager I saw told me that I could do it with my Barclaycard, I have an £800 limit on it and 0% interest for a year, is that not a credit card?.. or is it also a money transfer card? - the reason I didn't want to use that card was because I am trying to built up my credit score which I think (you might tell me differently) is achieved with regular use.

I don't really understand the difference between the 2 types of card, on a credit card do you not just pay for things?.. as in would it not just pay off the overdraft the same way a money transfer card does?

nkkingston

Generally, if you have an overdraft you can't get out of, the advice is what your bank manager told you: to open a new basic account and close the old one. The overdraft then becomes an unsecured loan, with fewer fees and possibly lower interest, which you can pay back at a rate you can afford while taking into account your other credit commitments. If you think you can get out of your overdraft and stay out, it might not be the best solution for you, but generally it sounds like your bank manager is pretty switched on when it comes to debt advice - especially if he told you to open the basic account with another bank (which is the correct advice).

Jay442

He advised me to open a new account with the same bank, so I have 2 accounts with Barclays - the other account hasn't been closed, it's open and just has the overdraft in it. I don't understand why having an overdraft sat in there up to its max in one account is better than using that account for my salary. If that overdraft is up to £1k it's 75p per day, if it's between 1000-1800 I get charged £1.50 a day - the interest on it stays the same - if I have my salary in there I am in plus for at least a part of the month, therefore less charges

sourcrates

Jay442 wrote: »

He advised me to open a new account with the same bank, so I have 2 accounts with Barclays - the other account hasn't been closed, it's open and just has the overdraft in it. I don't understand why having an overdraft sat in there up to its max in one account is better than using that account for my salary. If that overdraft is up to £1k it's 75p per day, if it's between 1000-1800 I get charged £1.50 a day - the interest on it stays the same - if I have my salary in there I am in plus for at least a part of the month, therefore less charges

Yes but you will never actually repay the overdraught will you ?

The idea is, as others have mentioned, to repay what you owe at a rate you can afford, you should ask the bank to stop charging interest altogether to allow you to do that.

Also your new basic account should be with another bank with whom you have no debt, as the right of set off is something Barclays may choose to use, basically, within limits, they can take money from one account held with them, to repay a debt on another account within the same group.

Don't always trust what your bank manager may say.

Jay442

Is it possible to have an £1800 overdraft without them charging interest?..it's worth asking but I don't imagine the bank will do me too many favours.

sourcrates

Jay442 wrote: »

Is it possible to have an £1800 overdraft without them charging interest?..it's worth asking but I don't imagine the bank will do me too many favours.

If your in financial difficulties they are expected to treat you fairly.

Prolonging the time it would take to repay the debt by adding interest may not be treating you fairly !!

Don't ask, you don't get !!