My Challenge

frogtastic_2

Hello all,

First time poster, my challenge is similar to many in that I have credit cards/loans/etc but I am self employed and have not put anything aside for my tax bill, in fact truth is the money has been spent half on crap and the other half on moving house. House move is now over, thankfully! My tax bill is £10k and needs to be paid end of Jan 08. So here's my SOA:

Monthly Incomings:

Long term contract - £3750
Casual Call Out work - £1000 (varies - this is an average)
OH Income - £0 (currently training)
Child Benefit - £120

Total - £4870

Monthly Outgoings:

Mortgage/Rent - £1330
Council Tax - £109
Gas - £40
Electric - £40
TV License - £12
Broadband - £29 (high but supports phone lines + business)
Vonage Phone - £40 (inc 2 lines - 1 personal, 1 business)
Mobile - £20
Food - £400
Car Insurance My Car - £45
Car Insurance OH Car - £40
Petrol - £40 (OH Car)
Diesel - £160 (My Car)
Home Insurance - £29

Total: £2334

Capital One CC – Balance £800 (limit £800) APR 29.9% - £20 MIN
Black Horse Sofa Loan - Balance £350 (approx) APR 0% - £61
Black Horse Personal Loan - Balance £1500 (approx) APR 29.9% - £74
Next Mail Order - Balance £800 APR 24.9% ( I think) - £100
Natwest Overdraft - Balance £1000 APR Unknown Interest: £7
Natwest Overdraft 2 - Balance £700 APR Unknown Interest: £6
Inland Revenue Jan 08 tax bill - £10000
Car Loan 1 - £5500 Apr 12% - £136
Car Loan 2 - £2000 0% - £90

Total: 484 per month (excluding income tax bill)

Total Debt: £22550 (12650 excluding tax bill due in Jan 08)

Balance: £2052 surplus

Although that might look like a healthy surplus, I've got to use it to raise £10k by end of Jan 08, pay for Christmas, and any leisure activities. I should also be putting money asside for the tax bill for the following year. Here's what i've done so far:

Ditched BT & Sky and now download anything I want to watch that isn't on freeview, and run my telephone lines over my broadband connection (saved £70/month)

About to start running my car on a mixture of diesel and vegetable oil. Due to change in the law from Jul 07 I can do this legally without any duty due to customs & excise. This should save me 60% on my diesel bill.

Started spending more on food, to make more interesting meals, which is tempting me from getting takeaways, which will save money overall.

We looked at cutting back on two cars, my wife has Post Natal Depression after our 2nd child, and she really struggles at the moment just getting through the day. The car gives her freedom and makes a huge difference. I use my car for work, I'm a mobile computer engineer & IT contractor for the county council.

My plan:
1 - cut back unnecessary spending as much as possible

2 - Save as much as possible to have my tax bill paid off by Jan 31st, or end of Feb at the latest (end of Feb they add a 5% penalty if you don't pay).

3 - From Feb onwards start saving towards my next tax bill, and start paying off the cards one by one in priority (APR) order.

4 - Once that's out the way - start on the mortgage (200k 30 years to go!)

5 - Pension needs to fit in somewhere too!!

I also want to:
-Try growing my own winter veg this autumn (even if I fail miserably, its a cheap activity to do with the kids!!)
-Convert my car to run on 100% waste vegetable which can be procured for free from locally chippies and takeaways - conversion is around £1k, but based on my diesel usage, it would have paid for itself by 7 months or so.
-Open an online shop partnering with my Mum. She's offered to run it, if I do all the web-design/technical aspects and half the profits.
- Take on a couple of guys to work for me evenings/weekends doing computer repair & IT training, take a small cut of their hourly rate in exchange for passing customers to them.

Anyway, sorry for my ramblings, if any of you have any advice, it would be appreciated.

Thanks

frog

frogtastic_2

Anyone any advice...am I on the right track?

Karmacat

Hi frogtastic

Welcome to mse. Just a quick note initially about the food - you don't need to spend *more* on food, not when you're now spending £400 a month for 2 adults and 2 children! Check out the Old Style Moneysaving Board on this forum for billions of ideas about how to cook cheaply and well. Even if you don't take everything on board, you should easily be able to cut £100 a month eventually - try for £20-30 a month, do it gradually, you'll be surprised. Slo cookers and breadmakers seem to be the bees' knees!

I'll check out the other things, and I'm sure others will be along soon.

Lucy1982_2

How many is your food bill feeding? I'm guessing just 2 adults and 2 small children.

There are many on here who would suggest that this could be cut, and still make interesting meals. Have you check that all of your energy suppliers are the cheapest around?

You have a large surplus income, so you should be able to battle your debts well, you will just really need to watch your spending and make cuts whereever possible.

good luck

Karmacat

frogtastic wrote: »

Hello all,

Monthly Outgoings:
I just lost a massive great post, didn't copy it first as I usually do. Basically, for the mortgage, the gas, electric, broadband, phone, mobile, car insurance, and home insurance, go through uswitch or similar to see that you're getting the best deal. Some of them sound very high; you may begetting the right usage out of them, but maybe not. It could save you a *lot* of money.
Mortgage/Rent - £1330
Council Tax - £109
Gas - £40
Electric - £40
TV License - £12
Broadband - £29 (high but supports phone lines + business)
Vonage Phone - £40 (inc 2 lines - 1 personal, 1 business)
Mobile - £20
Food - £400
Car Insurance My Car - £45
Car Insurance OH Car - £40
Petrol - £40 (OH Car)
Diesel - £160 (My Car)
Home Insurance - £29

Total: £2334

Capital One CC – Balance £800 (limit £800) APR 29.9% - £20 MIN
Black Horse Sofa Loan - Balance £350 (approx) APR 0% - £61
Black Horse Personal Loan - Balance £1500 (approx) APR 29.9% - £74
Next Mail Order - Balance £800 APR 24.9% ( I think) - £100
Natwest Overdraft - Balance £1000 APR Unknown Interest: £7
Natwest Overdraft 2 - Balance £700 APR Unknown Interest: £6
Inland Revenue Jan 08 tax bill - £10000
Car Loan 1 - £5500 Apr 12% - £136
Car Loan 2 - £2000 0% - £90

Total: 484 per month (excluding income tax bill)

Total Debt: £22550 (12650 excluding tax bill due in Jan 08)

Balance: £2052 surplus

The principle on repayment of debts is snowballing - paying first the ones with the highest rates of interest, in your case, Cap1 and BH Personal Loan. With a surplus of £2000 (plus any savings you can make) you should be able to pay those off in a couple of months, and that leaves a lot of money spare for more efficient capital repayment or saving for your tax bill.
Although that might look like a healthy surplus, I've got to use it to raise £10k by end of Jan 08, pay for Christmas, and any leisure activities. I should also be putting money asside for the tax bill for the following year. Here's what i've done so far:

Ditched BT & Sky and now download anything I want to watch that isn't on freeview, and run my telephone lines over my broadband connection (saved £70/month)

About to start running my car on a mixture of diesel and vegetable oil. Due to change in the law from Jul 07 I can do this legally without any duty due to customs & excise. This should save me 60% on my diesel bill.

Started spending more on food, to make more interesting meals, which is tempting me from getting takeaways, which will save money overall.

We looked at cutting back on two cars, my wife has Post Natal Depression after our 2nd child, and she really struggles at the moment just getting through the day. The car gives her freedom and makes a huge difference. I use my car for work, I'm a mobile computer engineer & IT contractor for the county council.

My plan:
1 - cut back unnecessary spending as much as possible

2 - Save as much as possible to have my tax bill paid off by Jan 31st, or end of Feb at the latest (end of Feb they add a 5% penalty if you don't pay).

3 - From Feb onwards start saving towards my next tax bill, and start paying off the cards one by one in priority (APR) order.

4 - Once that's out the way - start on the mortgage (200k 30 years to go!)

5 - Pension needs to fit in somewhere too!!

I also want to:
-Try growing my own winter veg this autumn (even if I fail miserably, its a cheap activity to do with the kids!!) I love this!
-Convert my car to run on 100% waste vegetable which can be procured for free from locally chippies and takeaways - conversion is around £1k, but based on my diesel usage, it would have paid for itself by 7 months or so.
-Open an online shop partnering with my Mum. She's offered to run it, if I do all the web-design/technical aspects and half the profits.
- Take on a couple of guys to work for me evenings/weekends doing computer repair & IT training, take a small cut of their hourly rate in exchange for passing customers to them.

Anyway, sorry for my ramblings, if any of you have any advice, it would be appreciated.

Thanks

frog

Sorry, this is an abbreviated version, I have to go out, but you get the gist. Others will be along too.

Good luck!!!:T

OberonSH

frogtastic wrote: »

Hello all,

First time poster, my challenge is similar to many in that I have credit cards/loans/etc but I am self employed and have not put anything aside for my tax bill, in fact truth is the money has been spent half on crap and the other half on moving house. House move is now over, thankfully! My tax bill is £10k and needs to be paid end of Jan 08. So here's my SOA:

Monthly Incomings:

Long term contract - £3750
Casual Call Out work - £1000 (varies - this is an average)
OH Income - £0 (currently training)
Child Benefit - £120

Total - £4870
Take it this Is too high for child and working tax credit.

Monthly Outgoings:

Mortgage/Rent - £1330
Council Tax - £109
Gas - £40
Electric - £40
TV License - £12
Broadband - £29 (high but supports phone lines + business) Try shopping around, or phoning your supplier to see if they have a better deal.
Vonage Phone - £40 (inc 2 lines - 1 personal, 1 business)
Mobile - £20
Food - £400 This is pretty high, head over to oldstye board for some ways to cut down. We spend 160 for 2 adults (1 preggers) and a child. I use my slow cooker a lot - can get away with cheaper cuts of meat, and by shopping at my loal market the veggies including 5lbs of local pots only ever comes to a fiver. More interesting doesn't man more expensive, plus might give OH a boost to try new recipes.
Car Insurance My Car - £45 Have you tried to get these down? Shop a round a bit - don;t fogrget to go through a cashback site!
Car Insurance OH Car - £40
Petrol - £40 (OH Car)
Diesel - £160 (My Car)
Home Insurance - £29 Again, worth checking to make sure you're still getting the best deal

Total: £2334

Is there any child care? If so, look at childcare vouchers through your employer - saves everyone tax as it comes out your wages before tax is deducted.

Capital One CC – Balance £800 (limit £800) APR 29.9% - £20 MIN
Black Horse Sofa Loan - Balance £350 (approx) APR 0% - £61
Black Horse Personal Loan - Balance £1500 (approx) APR 29.9% - £74
Next Mail Order - Balance £800 APR 24.9% ( I think) - £100
Natwest Overdraft - Balance £1000 APR Unknown Interest: £7
Natwest Overdraft 2 - Balance £700 APR Unknown Interest: £6
Inland Revenue Jan 08 tax bill - £10000
Car Loan 1 - £5500 Apr 12% - £136
Car Loan 2 - £2000 0% - £90

All your cards seem pretty high interest - why not see if you can do a balance transfer to a 0% card - then 100% of your money will go on the balances not the interest. Get paid off uicker, and the extra money can be snowballed onto your Tax Fund

Total: 484 per month (excluding income tax bill)

Total Debt: £22550 (12650 excluding tax bill due in Jan 08)

Balance: £2052 surplus

Although that might look like a healthy surplus, I've got to use it to raise £10k by end of Jan 08, pay for Christmas, and any leisure activities. I should also be putting money asside for the tax bill for the following year. Here's what i've done so far:

Ditched BT & Sky and now download anything I want to watch that isn't on freeview, and run my telephone lines over my broadband connection (saved £70/month)

About to start running my car on a mixture of diesel and vegetable oil. Due to change in the law from Jul 07 I can do this legally without any duty due to customs & excise. This should save me 60% on my diesel bill.

Started spending more on food, to make more interesting meals, which is tempting me from getting takeaways, which will save money overall.

We looked at cutting back on two cars, my wife has Post Natal Depression after our 2nd child, and she really struggles at the moment just getting through the day. The car gives her freedom and makes a huge difference. I use my car for work, I'm a mobile computer engineer & IT contractor for the county council.

My plan:
1 - cut back unnecessary spending as much as possible

2 - Save as much as possible to have my tax bill paid off by Jan 31st, or end of Feb at the latest (end of Feb they add a 5% penalty if you don't pay).

3 - From Feb onwards start saving towards my next tax bill, and start paying off the cards one by one in priority (APR) order.

4 - Once that's out the way - start on the mortgage (200k 30 years to go!)

5 - Pension needs to fit in somewhere too!!

I also want to:
-Try growing my own winter veg this autumn (even if I fail miserably, its a cheap activity to do with the kids!!)
-Convert my car to run on 100% waste vegetable which can be procured for free from locally chippies and takeaways - conversion is around £1k, but based on my diesel usage, it would have paid for itself by 7 months or so.
-Open an online shop partnering with my Mum. She's offered to run it, if I do all the web-design/technical aspects and half the profits.
- Take on a couple of guys to work for me evenings/weekends doing computer repair & IT training, take a small cut of their hourly rate in exchange for passing customers to them.

Anyway, sorry for my ramblings, if any of you have any advice, it would be appreciated.

Thanks

frog

I'd also ebay anything not nailed down (a personal favourite of mine!) to free up some instant cash. Don;t forget to put this money aside in a special account - I know all to well the dangers of having it in a reachable account, and just 'borrowing a bit'. Before you know it, you're back to square one. Don't forget to budget for the next tax bill, and maybe look at transferring the estimatd monthly amount to your saving account each month. Voila, no more panic.

Christmas needn't be a big deal - it's a sunday dinner with tinsel. Theres loads of threads around at the moment on how to cut the cost of Christmas, so it needn't put a big dent in your plans. Try signing up to Pigsback etc to collect points for free vouchers - they make great gifts or cover some of the costs at least.

Above all, make sure your OH is onboard, otherwise you'll be saving money to spend it elsewhere!

Good luck with it, you seem to have head screwed on right way - the car conversion sounds really interesting!