Down but not out... time to make some major changes

Bobbby81

Hi,

I was going to do this in the New Year but I have decided to grasp the nettle today!

We had our LBM a while ago and have made serious changes to our outgoing since September. We have a long way to go, as you will see from my SOA. The debts have been racked up due to many years of disorganised spending, consolidation and then more spending!!

I should add that the £13000 cash is money that my wife has. This money is from her family and is tied up in a very specific set of circumstances. It can't be used to pay debts. I won't give any more information but this is unchangeable. The proverbial would need to really hit the fan before we could use this money to pay debts, and even then this would cause huge issues.

This is the first time that I have ever actually typed/written down exactly what we owe and I must admit that it makes me feel ashamed to see that we owe such a huge amount of money.I have friends who panic about their 2k credit card bill, and here we are owing 50k!

Any comments will be gratefully received.

-taff

um....where is your SOA?

sourcrates

Maybe try this link :

http://www.stoozing.com/calculator/soa.php

Bobbby81

Apologies... early morning brain not quite working...

Here it is.. it's bad

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 3411
Partners monthly income after tax....... 1019
Benefits................................ 82.8
Other income............................ 0
Total monthly income.................... 4512.8

Monthly Expense Details
Mortgage................................ 489
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 103
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 27
Groceries etc. ......................... 0
Clothing................................ 50
Petrol/diesel........................... 160
Road tax................................ 5
Car Insurance........................... 60
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 19
Contents insurance...................... 19
Life assurance ......................... 35
Other insurance......................... 28
Presents (birthday, christmas etc)...... 40
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1277.12


Assets
Cash.................................... 13000
House value (Gross)..................... 150000
Shares and bonds........................ 0
Car(s).................................. 6500
Other assets............................ 0
Total Assets............................ 169500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 77000....(489)......1.25
Total secured & HP debts...... 77000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
CC1............................16000.....280.......0
CC2............................6600......150.......6.9
CREATION 1.....................5000......50........0
WIFE FLYBE.....................4500......45........0
WIFE BARCLAYCARD...............7500......168.......0
TESCO..........................4500......145.......19.9
FLYBE..........................4500......45........0
hsbc...........................2650......75........18.9
CREATION 2 ( ASDA).............5000......103.......21.9
Total unsecured debts..........56250.....1061......-


Monthly Budget Summary
Total monthly income.................... 4,512.8
Expenses (including HP & secured debts). 1,277.12
Available for debt repayments........... 3,235.68
Monthly UNsecured debt repayments....... 1,061
Amount left after debt repayments....... 2,174.68

Personal Balance Sheet Summary
Total assets (things you own)........... 169,500
Total HP & Secured debt................. -77,000
Total Unsecured debt.................... -56,250
Net Assets.............................. 36,250

MrsTinks

Well the good news is that it ISN'T bad... In so far as you appear to have a large chunk of spare cash, but I'm going to go on out on a limb here and say you don't really do you?

You haven't listed anything for food, entertainment or holidays? A lot of the numbers are also nice neat round numbers... are these the TEAL numbers or are they educated guesses?

Ultimately to work out where you're going wrong the best thing you can do is go over a few months worth of bank statements and work out exactly what has gone wrong and where... then we can work on fixing it and seeing how much you really have to throw at your debts. Provided that you can reign in the spending then the good news is there is no reason why you shouldn't be able to get on top of these debts

MrsTinks

For a spot of perspective please read the post from yesterday about 11 years a slave - it's here on the DFW forum and it's about a forumite who has paid back £103k worth of debt - it's absolutely doable!

Chandelier.

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

Monthly Income Details
Monthly income after tax................ 3411
Partners monthly income after tax....... 1019
Benefits................................ 82.8
Other income............................ 0
Total monthly income.................... 4512.8

Monthly Expense Details
Mortgage................................ 489
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 103 Is this spread over 10 or 12 months? If 10, it may be easier to spread it over 12 to make budgeting easier.
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 60 Are these near the end of contract? If so try and find better deal or go sim only.
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 27 Any chance of haggling this down? We pay £17.50 a year for broadband and line rental with $ky
It just takes a bit if haggling.
Groceries etc. ......................... Is this an error for nothing here? I reckon if you shop around and are careful you could keep this to around £250 a month. Try the grocery challenges over on the OS board. Also do a inventory of what you already have in cupboards/freezers and meal plan off this and used what's already there. Will save you a few pennies.
Clothing................................ 50 Is this a true amount? Do you really need to spend that much or could you just have a staple wardrobes which is easy to rotate. The marie kondo book is s good read and many people tend to declarer wardrobes of items they never wear and it really makes you think. Although it's not as high as other clothing budgets I've seen, it's just a thought. Also check out charity shops for good bargains and depending on age of child, fbook groups or eb@y for some bargains.
Petrol/diesel........................... 160 Work related milage/costs for petrol? Do you get any milage costs back for petrol? Also check out MSE motor travel article to get some great tips on how to keep costs down. I've saved a small fee doing this (ensuring tyres inflated to correct pressure and being more aware when driving),
Road tax................................ 5 Does this come out monthly or annually?Nice to see its low.
Car Insurance........................... 60 I'm aware this is for two cars. Any chance of when it's up for renewal doing some comparison searches for both cars and checking out multi car deals. We saved a fortune using a multi car deal with @viva and they've been brilliant. We've stuck with them past 3 years as they've always price matched quotes and then we get a loyalty discount. We also pay annually to cut direct debit costs. We save up over the 12 months before its due again.
Car maintenance (including MOT)......... 20 This looks low. I'm taking it both cars fairly new? Or may include service plans etc. The only thing here I may budget more for is wear and year and things like replacing tyres etc.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 I'd possibly put something here
You never know for unexpected dental emergencies or prescriptions. It's nice to have a back up fund.
Pet insurance/vet bills................. 0
Buildings insurance..................... 19 This alongside contents insurance seems high. Are you sure you've found the best deal? I understand location and surrounding areas may affect this. Maybe have a look at a dual building and content insurance and see if you can get this to at least a 1/3 or 1/2 amount. Don't forget to check websites like topcashback as well to see if there are any cashback incentives. We recieved £42 doing this- likewise check for other purchases, insurances etc. This is another we pay annually and save within budget for rest of year.
Contents insurance...................... 19 See comment above.
Life assurance ......................... 35 I'm not very clued up on life assurance. I take it this may be joint policy or two separate ones? May be worth a look around at renewal times. Remember to check companies not included on price comparison websites.
Other insurance......................... 28 What is this for? Is it really essential?
Presents (birthday, christmas etc)...... 40
Haircuts................................ 20
Entertainment........................... 0 Nothing here at all??
Holiday................................. 0
Emergency fund.......................... 0 You should put something here. Even if it's £50 a month or whatever you can manage. Alot of people recommend a fund of £1000 to use as a backup if anything goes wrong.
Total monthly expenses.................. 1277.12


Assets
Cash.................................... 13000
House value (Gross)..................... 150000
Shares and bonds........................ 0
Car(s).................................. 6500
Other assets............................ 0
Total Assets............................ 169500


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 77000....(489)......1.25
Total secured & HP debts...... 77000.....-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
CC1............................16000.....280...... .0
CC2............................6600......150...... .6.9
CREATION 1.....................5000......50........0
WIFE FLYBE.....................4500......45........0
WIFE BARCLAYCARD...............7500......168.......0
TESCO..........................4500......145...... .19.9
FLYBE..........................4500......45....... .0
hsbc...........................2650......75....... .18.9
CREATION 2 (ASDA).............5000......103.......21.9
Total unsecured debts..........56250.....1061......-

I'd focus on the cards I've highlighted in red as they have the highest interest rates. Check out the rates of all credit cards and when 0% deals are due to end. And keep a clear note. Also check out the snowball calculator and input these details to see which you should concentrate and throw any additional repayments to to clear debts quicker. It's a brilliant tool.

Monthly Budget Summary
Total monthly income.................... 4,512.8
Expenses (including HP & secured debts). 1,277.12 I suspect this may be higher if you've left anything out. However if not this is quite a low figure and looks good even if there are room for small improvements.
Available for debt repayments........... 3,235.68
Monthly UNsecured debt repayments....... 1,061
Amount left after debt repayments....... 2,174.68
Is this accurate? If so where does it go?

Personal Balance Sheet Summary
Total assets (things you own)........... 169,500
Total HP & Secured debt................. -77,000
Total Unsecured debt.................... -56,250
Net Assets.............................. 36,250

--


To be honest it doesn't look too bad. I hope I've not come across as massively brutal in there. It's just small suggestions and ideas. I'm not sure if all accurate expenditure I.e. Grocery shop etc.

I'd suggest reviewing all direct debits /insurances and checking when they're up for renewal and keep note of this somewhere clear may it be a diary or calendar. Also maybe keep a spending diary. Look after the pennies and the pounds will look after themselves!

Chandelier.

Wow looking back on that it hurts my eyes. Sorry if it hurts yours or it may be long winded. It's the first time I've made suggestions for someone's SOA.

And as Mrs Think says it doesn't look overly bad. It may be useful to look over some previous bank statements. Some people suggest 3 months worth to get accurate figures and an idea where all disposable income has gone.

All the best!

Irisis

That really doesn't look too bad given your (relatively) high monthly income - if you're determined, make a plan and stick to it then barring any unforeseen circumstances you can absolutely do this. Best of luck!

retepetsir

Also with that level of income, you may have to pay tax on the child benefit you receive?

EssexHebridean

Bobbby81 wrote: »

Apologies... early morning brain not quite working...

Here it is.. it's bad

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 3411
Partners monthly income after tax....... 1019
Benefits................................ 82.8
Other income............................ 0
Total monthly income.................... 4512.8

Monthly Expense Details
Mortgage................................ 489
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 103
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 27
Groceries etc. .........................£250 Max
Clothing................................ 50
Petrol/diesel........................... 160
Road tax................................ 5
Car Insurance........................... 60
Car maintenance (including MOT)......... 20 If this is being set aside monthly where is it going? The only cash you show is that 13k
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 19
Contents insurance...................... 19 This seems pretty expensive - I'd be surprised if you can't close to halve this
Life assurance ......................... 35
Other insurance......................... 28 What's this for? Is it essential?
Presents (birthday, christmas etc)...... 40
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0 £100 per month until you reach 1k in the pot
Total monthly expenses.................. 1277.12


Assets
Cash.................................... 13000
House value (Gross)..................... 150000
Shares and bonds........................ 0
Car(s).................................. 6500
Other assets............................ 0
Total Assets............................ 169500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 77000....(489)......1.25
Total secured & HP debts...... 77000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
CC1............................16000.....280.......0
CC2............................6600......150.......6.9
CREATION 1.....................5000......50........0
WIFE FLYBE.....................4500......45........0
WIFE BARCLAYCARD...............7500......168.......0
TESCO..........................4500......145.......19.9
FLYBE..........................4500......45........0
hsbc...........................2650......75........18.9
CREATION 2 ( ASDA).............5000......103.......21.9
Total unsecured debts..........56250.....1061......-


Monthly Budget Summary
Total monthly income.................... 4,512.8
Expenses (including HP & secured debts). 1,277.12
Available for debt repayments........... 3,235.68
Monthly UNsecured debt repayments....... 1,061
Amount left after debt repayments....... 2,174.68

Personal Balance Sheet Summary
Total assets (things you own)........... 169,500
Total HP & Secured debt................. -77,000
Total Unsecured debt.................... -56,250
Net Assets.............................. 36,250

The first thing you need to do is ascertain where that surplus is going. Even allowing for the groceries being left out above, you've got in the region of £1850 per month that *should* just be sitting in your bank account at the end of each month, but it's not, at a guess? First off, start giving yourselves some "spending money" each month - but agree that ALL your personal expenditure for things like toiletries, haircuts, and treats come out of that.

There are savings you can make in the SOA, no question, but until you have a budget that works, and is accurate, and know where your money is going, there's almost no point in looking at them. As things stand currently, that SOA suggests that you're "mislaying" in the region of 21k a year - that's more than a lot of folk EARN in a year! To put it into perspective, this figure is also more than all the debts you're currently paying interest on.

With that level of surplus it's madness that you're paying things like car insurance monthly. You need to start budgeting NOW to pay these, plus car tax, in full as and when they come due. Buildings and Contents, the same applies. At the moment you are paying all these folk a premium to let you pay over 12 months, when there is absolutely NO reason to do that!

Well done for starting to look at this now rather than the age old "leaving it until the new year" which incidentally never happens. As others have said though - you need to focus with a little more detail and start to really understand your budget. You work hard for the money you earn - it's now time that the money you earn starts working for you, as well.