HELP! Rubbish at this!

WannabeRich

Hello everyone.

I'm 45, and only just now getting to grips with my money. Isn't that awful? I've been self-employed for 22 years, NO PENSION, NO LIFE INSURANCE, and am behind with my National Insurance.

I've always been hopeless with budgeting, and just relied on earning more to get me out of tight spots. But I've finally got a mortgage and that has REALLY focussed my mind on sorting out my cash.

My SOA is below. Recently, one of my regular clients cut my hours by 50% so my money has halved. I'm also married now, and don't get the Tax Credits anymore (in fact, I have an overpayment to repay). I have £2,790 on a Barclaycard that will lose its 0% next month. I applied for an MBNA 40mnths 0% card, and I got it, but only for £1,500.

BUT I recently stopped smoking and that's saving me over £250 a month.

I have a tax bill (2014/15) to pay soon (don't know exact amount, accountant is calculating it, maybe £3k), plus everything you see below. Then I'll have another, larger, tax bill (2015/16) to find.

I feel sick. This budget below is bare bones -- I have NOT been spending this little, I think I must have been overspending for most of my life.

What do I do? Where do I start?

Oh -- I have a husband, but we haven't merged our finances. He pays me £489 a month, which is 50% of our shared household bills (mortgage, Council Tax, etc).

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1379
Partners monthly income after tax....... 0
Benefits................................ 137.6
Other income............................ 680.17
Total monthly income.................... 2196.77

Monthly Expense Details
Mortgage................................ 735.8
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 131
Electricity............................. 69.5
Gas..................................... 69.5
Oil..................................... 0
Water rates............................. 24
Telephone (land line)................... 0
Mobile phone............................ 48
TV Licence.............................. 12.12
Satellite/Cable TV...................... 22
Internet Services....................... 5.99
Groceries etc. ......................... 200
Clothing................................ 45
Petrol/diesel........................... 10
Road tax................................ 15
Car Insurance........................... 35
Car maintenance (including MOT)......... 17.5
Car parking............................. 0
Other travel............................ 70
Childcare/nursery....................... 90
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 14
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 100
Holiday................................. 50
Emergency fund.......................... 50
Total monthly expenses.................. 2051.41


Assets
Cash.................................... 1500
House value (Gross)..................... 330000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 500
Total Assets............................ 333000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 132700...(735.8)....2.99
Total secured & HP debts...... 132700....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................2790......64........22
Tax Credit repayment...........2700......91.11.....4
Dad............................7000......167.5.....0
Total unsecured debts..........12490.....322.61....-


Monthly Budget Summary
Total monthly income.................... 2,196.77
Expenses (including HP & secured debts). 2,051.41
Available for debt repayments........... 145.36
Monthly UNsecured debt repayments....... 322.61
Amount short for making debt repayments. -177.25

Personal Balance Sheet Summary
Total assets (things you own)........... 333,000
Total HP & Secured debt................. -132,700
Total Unsecured debt.................... -12,490
Net Assets.............................. 187,810

Reproduced on Moneysavingexpert with permission, using other browser.[/i]

WannabeRich

PS: My husband's £489 is included in the Other Income amount. As well as my ex husband's meagre child maintenance.

[Deleted User]

Hi,

Welcome to the forums, they're a friendly bunch here.

Pm02
x

WannabeRich

Thanks Looking forward to sorting this mess out once and for all.

Moneywhizz

At first glance it doesn't seem like your husband is contributing to half the bills. I can see that there are some things in the soa that would be personal to you, but household expenses come to a lot more than £1000. It also looks like there are a lot of things you could cut back on, eg, presents, mobile phone and your gas and electricity seem very high. As it stands you need to find ways of balancing your budget, either by increasing your income, or cutting back your expenditure. Good luck, you will get lots of support here.

tacpot12

Well done on stopping smoking. That will really help with the finances, but don't do yourself down;
being self-employed for 22 years is an achievement.

Your finances are not that badly out of kilter. You have some scope to reduce expenditure. Your first priority should be to clear the Barclaycard debt down zero, after having moved the amount you can to the new card.

Then focus on paying you Dad back, finally clear the new card.

As you have children and a mortgage, you should fix the life insurance issue as a priority. A level term policy should be relatively cheap, and will provide for more for your family as the mortgage is cleared.

Once the debts are cleared, you can direct the cash towards saving for a pension.

Keep updating the SOA, and avoid incurring any new expenses apart from the life insurance premium.

Good luck

WannabeRich

Thank you both SO MUCH for your replies. You were both so helpful and nice. I still feel so bad about being hopeless with money for so long, I think I expected a beating!

Yes, husband needs to up his contribution! We did speak about that this morning.

The gas/elec is high because I put us into the MSE cheap deal with Eon, but the direct debit didn't actually cover the amount we used, so we managed to unknowingly rack up a £450 bill! That is thankfully cleared now with yesterday's payment, so I can look into reducing that monthly payment again.

THANK YOU for saying that self-employment for 22 years us an achievement! I have earned a lot in that time, it's just that I spent even more.

Life insurance, yes - will do that ASAP. Might be cheaper now I don't smoke.

Thank you so much again. I hope that facing up to the reality of the money situation really IS the hardest step - looking face-on at my finances has actually been really depressing. I could kick myself. Really really hard!

Houseplant26

Hi!

I echo the comments about being proud of yourself being self employed for so long. It is a real achievement.

Having a glance through your S.O.A I'm a little loathed to comment as our situations are so different (I have no dependants, I rent etc) however my gut is that you could consider cutting down on things like cable and entertainment for some cheaper options. I know entertaining kids can be really reall expensive but with more shopping around or more free days out perhaps this can be reduced. What about creative days at home with whatever you can find in the house, picnics outdoors, watch DVDs you already own with homemade popcorn, walks, free museums and art galleries etc etc

Your mobile phone also seems expensive but it's this because of work? I know it is entirely possible you use it a lot as part of your business.

Houseplant26

Also could presents be lower?
£1,200 a year seems a lot even with children.

WannabeRich

I like your replies! Never think about not posting! :-)

Yes, I could cut back on entertainment - at least till I'm out of the woods. It's summer holidays right now so it's costing more than normal. During term-time, we could probably spend £60 a month on entertaining them - maybe less.

YES PRESENTS!! I don't know what to do about this. That's presents for everyone, whole year, birthdays and Christmas. There are 6 people I buy for mainly - my parents, brother, husband and my 2 kids.

... Yikes. I don't really know how to cut that down. I have such good intentions, then I really feel pressured to buy Christmassy stuff, and usually set a budget for birthdays then feel guilty and go and panic-buy more stuff!

Hence my debts. :-/

WannabeRich

The mobile phone bills are actually for 2 phones - mine and my eldest son's. He's 13.