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

Bobbby81

Chandelier. wrote: »

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. abou 12 months to go on each one
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 - wiill definitely call and try my luck!
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. we managed 250 last month by planning meals and shopping at Aldi
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. I just thought that I should put a figure here! We don't spend a great deal on clothes on a month to month basis
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), I don't get any travel expenses
Road tax................................ 5 Does this come out monthly or annually?Nice to see its low. annual but it works out to 2.50 per month per car due to low emissions!
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. Not sure if we would save much on this
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. one car under warranty and another car a bit older but reliable
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. Definitely need to get a better deal for this 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!

Thanks for your help. I appreciate your comments. I have made some notes, in response to your comments above

Bobbby81

MrsTinks wrote: »

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

Hi, I rounded some of the numbers up!

Up until a few months ago our surplus money was swallowed up on holidays, weekends away, meals out and general ridiculous spending. Since cutting back we have actually had a surplus in our acccounts

I didn't put anything for entertainment of holidays, however I agree I should put something down for this. We may not go on holiday, however as parents of a 6 year old we will need to assign some money to entertainment.

Bobbby81

retepetsir wrote: »

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

Yes, I am waiting for that letter to arrive

enthusiasticsaver

The good news is you have a relatively high income so should be able to deal with this if you really have had your LBM and are prepared to knock the weekends, holidays, meals out on the head until you are out of debt. It will take a different type of mentality to watch every penny but in the end it will be worth it. Good to see you know where your areas of overspending are and you have already taken steps.

You need to make that soa accurate by putting in £250-£300 for groceries, some entertainment and an emergency fund. Ideally you would move the food, petrol and entertainment and clothing etc etc (ie all discretionary spending) to a separate account at the beginning of each month so you are spending within your budget. Put the car maintenance, tax, insurances in a savings account so it is there to pay for repairs etc and same goes for emergency fund. Once it reaches £1k put the money towards debt repayment instead. If you can move the cards not on 0% to 0% now that will help, if not just focus your earliest attention on the most expensive debts.


Good luck and I would suggest you start a debt free diary which you can update hopefully as you start to get rid of the debt and that helps keep you accountable and less likely to slip into your bad money spending habits.

enthusiasticsaver

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. ......................... 0 You need something in here
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 no other child related expenses - after school care, kids clubs or activities etc etc?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 19
Contents insurance...................... 19
Life assurance ......................... 35
Other insurance......................... 28 what insurance is this?
Presents (birthday, christmas etc)...... 40
Haircuts................................ 20 for three people?
Entertainment........................... 0 you need something in here
Holiday................................. 0
Emergency fund.......................... 0 start one up. with a house and two cars you need this or emergencies will be put on credit cards
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 focus on this first or move to 0%
FLYBE..........................4500......45........0
hsbc...........................2650......75........18.9 focus on this first or move to 0%
CREATION 2 ( ASDA).............5000......103.......21.9 focus on this first or move to 0%
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

As others have said I strongly suspect you will be ineligible for the child benefit so not sure how this is clawed back. If you can get the three or four cards not on 0% on to 0% and pay around £2k per month this could be cleared in 28 months.

Bobbby81

So Christmas is over and we are getting back to normality! been paid today. I have taken a year out of my pension scheme ( I took advice first) and this has freed up almost £300 that can go towards additional debt repayments. We are aiming to pay 2k towards the debt this month. We have loads of food left in the freezer and enough chocolate to lead me to obesity, so we don't really need to buy anything!

Thanks for everyone who responded to my thread.

abby1234519

Bobbby81 wrote: »

So Christmas is over and we are getting back to normality! been paid today. I have taken a year out of my pension scheme ( I took advice first) and this has freed up almost £300 that can go towards additional debt repayments. We are aiming to pay 2k towards the debt this month. We have loads of food left in the freezer and enough chocolate to lead me to obesity, so we don't really need to buy anything!

Thanks for everyone who responded to my thread.

How do you plan to budget - what will be your method. How will you stay on track, how will you monitor your spends?

What is the plan - I personally have planned the next 36 months finances using ynab as it shows me where I'm going.

As a matter of perspective, you have twice the debt I have and earn twice as much. So if I'm not stressed about my DF journey, proportionally hopefully you don't need to be either :T

determined_new_ms

it does on the face of it look like ynab would be a good investment for you guys

PurpleFairy26

Bobbby81 wrote: »

Yes, I am waiting for that letter to arrive

I would be tempted to contract them as the deadline for SA is end Jan, if you owe and don't do it you may be due a fine too. At least you would know where you stand.

foxgloves

You're on a good monthly income & I can't see any readon why you can't clear your debts pretty swiftly. I recognised your reasons for the debts.....the eating out, weekends away, consolidations, silly spending as that was our debt story too. A takeaway, lunch or breakfast out, little trip to Pizza Express, etc, none of these are big spends. However, when added up over a month & multiplied by 12, you soon start to see where your money's going! We also worked out that we were spending around £2000 a year on work day lunches (popping out to M&S or Boots for sarnies etc) so started making packed lunches from the very next day. Instead of putting a holiday or camping weekend or festival straight on the plastic, we now put a set amount of cash away each month so that we can book a break with no effect on our bank account. You earn a good monthly income so there shouldn't be any need for you to supplement this by borrowing. It's just a matter of planning. Or more specifically, making a monthly budget & sticking to it. I was in debt from age 19 to age 46. My husband also followed a similar trajectory of debt acquisition. I always overspent my income & never budgeted. We are now totally reformed characters & even have an emergency fund! I love budgeting now & will never go back to how I used to be.
Good luck!