Looking for some debt advice

The_Novacat

Good morning all,

Been a long time lurker but this is the first time I have decided to make a post and look for a bit of advice regarding my own debt. I really need to tackle this as it seems to be creeping up steadily. Any advice regarding where I could cut back or which debts I should focus on would be much appreciated.

As a side note, I recently applied for a consolidation loan of £14,000 with Sainsburys which had an advertised 2.9% APR. They accepted the application no problem, but adjusted the APR to 6.9%. I declined the offer due to this increase.

Please find my SOA below, please note that all payments are made from my bank and my wife sends me half the amount debited for the bills she contributes towards. I have halved these payments in the SOA to reflect this. She currently makes no payments towards my own loans or car payments.

My salary - £1,333 after tax + deductions

Monthly Direct Debits:
Cinema (Cineworld VIP card, can cancel with 1 months notice) - £17.40
TV License - £12.12/2 = £6.06
Life Insurance (Me + Wife) - £38.31/2 = £19.16
Mortgage - £379.97/2 = £189.99
Water - £29.60/2 = £14.80
Gas + Electric - £66.49/2 = £33.25
Council Tax - £110.00/2 = £55
Phone + Internet - £31.49/2 = £15.75
Car Tax - £9.62
Car Insurance - £39.24
Hive Heating (18 months left, £160ish early repayment charge within first year, £80ish in second year) - £9.00/2 = £4.50
House Insurance - £9.91/2 = £4.96
Pet Insurance - £10

Subtotal: £419.73

Other spending:
Food (We use the Company Shop in Barnsley which is a members-only cheap food store) - £200
Clothing - £20
Household maintenance - £30
Fuel - £100
Going out (Don't do this often so conservative estimate) - £40
Buying lunch at work (need to stop doing this!) - £40

Subtotal: £400

Loans + Finance:
Santander Loan (4.9%, £3,149 left) - £155.20
Car Finance (10.9%, £8,500 left - balloon payment of £5,000 due Nov 19) - £108.04
Credit Card - (0% currently, 18% from Jan 18, £800 left) - £20
Hitachi Loan (0%, £500 left) - £53.25
I also owe my wife £2,860 in borrowed cash which I have yet to start paying back.

Subtotal: £336.49

Total Spend: £1,186.22

£146.78 remaining at the end of the month.

We have recently got married abroad which came at a huge expense and hammered my savings, so I was left with nothing in the bank. The £140ish I had saved from last month got quickly spent when my car decided to blow a turbo hose, so I am back to square one again!

Any advice ref where to begin with the above would be greatly appreciated.

Lucylocks

Does your wife contribute half towards food, housed maintenance etc? If so this should be giving you another £100+ unallocated income each month which you could put towards repayments.

Do you actually see any of your remaining money at the end of the month? If not you need to keep a spending diary to find out where it's going. £200 per month for 2 adults (you don't mention kids) isn't all that cheap, especially if you have subsided shop. This is one area you could look to save.

It looks eminently solvable to me without needing to consolidate

The_Novacat

Lucylocks wrote: »

Does your wife contribute half towards food, housed maintenance etc? If so this should be giving you another £100+ unallocated income each month which you could put towards repayments.

Do you actually see any of your remaining money at the end of the month? If not you need to keep a spending diary to find out where it's going. £200 per month for 2 adults (you don't mention kids) isn't all that cheap, especially if you have subsided shop. This is one area you could look to save.

It looks eminently solvable to me without needing to consolidate

Thank you for your reply.

Sorry should have mentioned that we don't have any kids, but we do have a dog whose food comes under the food bill. My wife doesn't really contribute towards that but she does also do some smaller shops throughout the month that I don't contribute to. She probably spends around £100 to my £200. We could probably do with monitoring it a bit better and balancing out what we pay between us.

I haven't seen any of the 'saved' money at the end of each month for the last 18 months due to our wedding. I'm hoping that the end of this month will be the first time I have it back again and would like to direct it towards some of my outstanding debt.

I'm not in a dire situation with the debt at the moment, would be nice to tackle it before consolidation becomes the only option.

National_Debtline

Hi The Novacat

Welcome to MSE and congratulations on getting married. It might help you to use this link to an SOA that is a slightly different format to yours http://www.stoozing.com/calculator/soa.php. Use it to double check there’s nothing you’ve missed off, like haircuts for example. It’s always a good idea to shop around for the best deals on your utilities and insurance policies too. I’d also suggest considering building in a small emergency fund in case of unexpected problems, like the issue with the car.

The good news from your SOA is your debts appear affordable, although I understand you’ve not really been seeing your surplus in recent times because of paying for the wedding. Keeping a spending diary is a really good suggestion, it might highlight any spending that has been forgotten about or is not quite accurate.

Once you are happy with the figures concentrate on overpaying the debts with the highest rates of interest, although check the terms and conditions of the loan and car finance to check if there are any financial penalties for doing this. Finally, if you do consider consolidating the debt get some independent financial advice first. Consolidating can often lead to you getting further into debt, and if you take out a secured loan your home will be at risk if you can’t keep up the repayments. Good luck.

Susie
@natdebtline

EssexHebridean

Congratulations on your marriage and well done for having money in savings to cover the cost of that!

I agree with Nat Debtline that a full SOA would be helpful for you - intitially complete it to reflect how things are at the moment - as you identify savings you will be able to adjust and eventually you'll end up with the version that will become your budget.

Keep a special place in your heart for the lovely people at Sainsbury's who, by their actions, saved you from going down the horrible route of consolidation - this has just shortened your debt free journey somewhat so yes, that is definitely a good thing! :T

For two people £200 per month for food is actually on the pricey side so maybe take a bit of a wider look and see if your cheap food store is as cheap as you think it is, or whether you may be better switching to Aldi or Lidl. Remember to account for the membership fee for the cheap place when you're doing the sums too. As an example we feed two people for inside £150 a month as a rule - and this includes free range eggs/ higher welfare meat (frequently bought from farmers markets etc) as well as all cleaning materials and some toiletries too. Your bill is definitely able to be got down a bit.

Psst - consolidation is NEVER the only option.

My_Own_Back_Door

Hi Novacat


I'm a newbie too, nice to meet you. I have had a Cineworld Card since 2002. I now keep a very close eye on my use of it. In a year you should estimate to go at least 26 times to make it worthwhile as there are other cheaper cinema chains out there (Odeon is usually around £8.50 per ticket outside London). If it drops below this for a sustained period I would cancel. Oh, and never buy the expensive snacks! Good luck with your journey! Like others I'm glad you changed your mind on the consolidation :-)

enthusiasticsaver

Your budget looks ok to me and you did the right thing in turning down the consolidation loan. Consolidating is the very worst thing you can do especially as most of your debts are either on 0% or low interest. Even the Santander loan is not a bad rate for unsecured lending.

The debt to tackle first is the credit card which moves to 18% in January. This is fixable though but do not take out any more loans/debt as this just compounds the problem. Stop lunches out at work and take a sandwich instead. That £40 plus your £140 gives you £180 spare each month. I would stick £50 into a savings account for emergencies and put the other £130 towards your credit card. £150 per month will clear it in just over 5 months which is January when the deal expires.

System

Bin the pet insurance, it is the biggest con job ever. The excess is set at an amount which is just above what the vast majority of vet bills are going to be.Take the tenner, stick it in an account every month then if you do ever need to actually go to the vet you can use the money in the account. If you don't then you've got a bit of cash stashed away you wouldn't have had before and can use that to pay down debts.

The_Novacat

Thank you for the advice everybody.

I have decided to take on the Credit Card debt first as recommended here. I have broken down the debt I owe my wife into 3 lots (as I borrowed it) and will be going with the 'snowball' method to pay them off. Will take slightly longer than tackling them 'highest interest first' but will make sure that my wife gets her money back reasonably quickly.

ReadingTim

I'd ditch the life insurance too, given you don't have kids.

Also, is your figure for buying lunch at work correct? £40 per month (20 working days) is £2 per day. Whilst every little helps, £2 can't buy you much unless it's massively subsidised.... is that right?

The_Novacat

ReadingTim wrote: »

I'd ditch the life insurance too, given you don't have kids.

Also, is your figure for buying lunch at work correct? £40 per month (20 working days) is £2 per day. Whilst every little helps, £2 can't buy you much unless it's massively subsidised.... is that right?

£2 per day is about right for me to be honest, I either go for a Maccy D's Wrap of the Day (not the meal) or to the local shop where I can get discounted sandwiches. I don't tend to buy drinks or sweets to go with them.

I'll have a look at the life insurance, but I'd be concerned with leaving my wife to tackle the mortgage alone if I rolled over.