Okay my SOA - Oh my god

moobag_3

Hi,

Thanks to fermi on the previous post who sent me in the right direction.

First a little bit of back ground. I have been with my partner for 3and a half yrs, when I met him I was 17 and he had debts of around 12k to various creditors with defaults a CCJ etc - it was a really awful time when he told me ervything, but I made the decision to stick with him, confessed all to my dad who bailed us out with a 9k loan (most creditors accepted less in final settlement) from his bank and we pay him back monthly.

I swore I would never let him or myself ever get into a situation like that EVER again. So we bought our flat 18months ago, and got married 2 weeks ago. However it seems like since we moved in everything has got on top of me, we seem to be on a payment plan for everything, owing money left right & centre and its got to the stage where I hate opening the post at the moment as I'm scared it'll be another bounced DD notice!

SO here goes it:

My monthly income after tax: £1250 - £1550 (depending on comission)
Hubby monthly income: £1200 however he is a postie (a non striking one! and gets paid weekly which we find really difficult to manage.)

TOTAL: £2450 - £2750

Outgoings:
Mortgage: £542 (variable with Preffered)
Rent: £300 (we're part rent part buy && that includes £50 per month for Areas that we've incurred)
Council Tax £120 (again on a payment plan)
Gas £28
Electric £65 (payment plan - which is around £25pm + £40 normal monthly bill)
TV Licence £11
Home insurance £20
TV £45
Internet £22.99
Home Phone £ £11 line rental a lot mor in calls!
Mobile £20 (switched to payg)
Food £200
Hubby Loan £350
CC debts: £90 min payment on three detailed below.

TOTAL: £1874.99 (totally dont understand how this is less, see below)


Debts:
HSBC CC: £440.32 14.9% £500 balance
Capital One: £779.78 34.9% £800 balance
Egg CC: £612 21.9% £650 balance
Overdraft £1375 only £1000 authorised so been charged about £400 in charges this month
Mortgage Areas: £1275
Hubby Loan: £5600
3 Mobile: £114 debt plus £150 remaining to close contract.


I feel like iv screwed everything up, and feel so stupid - it looks on here like we should have loads of money spare but we dont, I'm so far overdrawn that everytime I get paid it is swallowed up straight away. Hubby only has a cash card account because of his history now bank will give him a current account so we use mine like a joint account that he puts £225 per week in for his share of bills and loan.

I dont know where to start or what to do, if anyone can help I'd be so grateful.

Hippychick

Hello, well done on posting don't panic everyone here is really friendly yes it's scarey at first we have all been there, it will get better.

You need to do a spending diary and write absolutely everything down those small newspapers and chocolate bars add up.

Can your OH speak to his employers about being paid monthly? as that looks like it may help you budget better.

You need to start prioritising your debts, ie , concentrate on your mortgage arrears first and then the highest apr debts, can you switch your cards to a 0% deal or low life of balances?

Try to reclaim the charges on your overdraft it may be worth opening a new current account (via Quidco to get the cashback) then paying a certain amount each month to reduce the overdraft.

Take a look at www.whatsthecost.com select snowballing then enter all of your debts in, this will tell you in which order to pay them off and will also give you a debt free date to focus on.

I am sure others will be along soon with some more helpful advice.

Hippychick

Oh and congratulations on getting married!

Jacks_xxx

:wave: Hiya honey!

Congratulations on your marriage! :beer:

It's really easy to let money slip through your fingers when there's an event like that coming up, but now it's over it's a good time to get your spending under control - especially as on the face of it there's no need for you two to be in a mess.

I don't even think you need to cut back anywhere - just track that miscellaneous spending.

Have a look at old statements - can you see any patterns? The same old shops / pubs repeated over and over again? Lots of cash withdrawals? More than once a day? Or on consecutive days?

Keep a spending diary to find out where those several hundred pounds are going every month, agree an amount of spends each for each week, draw it out and then don't get any more until the next week.

(No using your cards either! To start with Hubby had my card hidden away and I had his, so that we couldn't get any more money without going to the other one. Change your pins if you know each others. :eek: And no promising of exotic sexual favours if they'll just hand the card over for ten minutes - or maybe that's just us???? )

If you opened a new current account you could treat the overdraft as a debt and make payments into it each month until it's clear. (If you do it through a cashback site you could even get paid! )

My hubby gets paid monthly and I get paid weekly so the monthly bills and debt repayments come out as soon as he gets paid leaving about £0.17 and I draw out £100 a week for shopping / living as and when I get paid.

We don't have an overdraft (anymore) so we have to be careful and keep an eye on our balance, as well as our spending.

Your overdraft is crippling you honeybun, but if your strict with yourselves you can have it under control pretty quickly.

You two are going to have to work together though - is hubby up for that? (mine wasn't at first.)

Love Jacks xxx

johncolescarr

Congratulations on getting married! really dont feel stupid, you've got a pretty good salary for a 21 year old!

Interest rates
these seem really high, capital one, 35%? they should be prosecuted! concentrate on paying the highest debts off first.

bank charges, £400 a month is a massive figure, you could clear your capital one in 2 months with this. claim these back and use the money to settle debts, this I think could be a real turning point for you.

In the short term, can you transfer your credit cards to 0% deals, this'll save you a fortune until you get them paid off

I think you can cut down some of your outgoings as some seem high,

Broadband - seems high, and I see you get your line rental and calls seperatly. Talk Talk (mixed reviews I know and I havent been with them yet) offer a package of anytime calls (plus some international) and free broadband for the price your paying for your broadband, plus there are many other cheaper options

Gas and electricity £93 a month, is this for two of you? I think you could get that down (see gas and electricity article), switch if you can

TV is this sky/cable? can you do without this or downgrade? unless you like sports, you can get movies from amazon £2 per dvd rental and do you really need audi channel!

Food, could you save money by cutting back in the short term and paying off your debts with the money - it'll pay dividends

I am surprised there is no money put to going out? is this realistic? maybe you could think of a spending diary, its amazing where you find your money goes. keeping a money diary will help you take control of your finances as you'll see where it all goes.

Good luck and keep us all posted on your progress

John

mrsspendalot

looking at your SoA you have excess income so that money must be going somewhere. You have £45 for TV - I assume that is Sky? Reduce it or cancel it. Your home insurance looks high, we pay £6.08 a month. You should be able to halve your food bill if it is just the two of you. I spend that for a family of 5 with one child in nappies. You seem to have room for maneouvre which is good. You need to tackle that overdraft asap to stop charges, and then try snowballing your credit cards and loans (try www.whatsthecost.com).

Welcome to DFW and congratulations on getting married

mrsspendalot

Just noticed you have mortgage arrears - this is a real priority. Pay your mortgage before your credit cards.

hw123

congrats on getting married,

first you do need to prioritise your debts make sure all your household bills are paid first also make sure you keep some for food as this is also classed as a priority, once all your priority's are paid with the money you have left over sort all your credit debts, do this by using pro rata that way you give each creditor thier fare share of your surplus.

if you need budgeting advice try a free debt advice charity like CCCS or Payplan.

shell_girl

A spending diary would be a great idea here as there is money that is being spent but you're not sure on what. If you write down literally every penny you spend (get your husband to do it too) then it's easier to see where your problem areas are.

I'd advise getting a basic bank account opened as soon as possible- one which hasn't got an overdraft facility on it and getting your wages paid into that each month, and transfer all your DD's onto this account as well.

I've added up your outgoings twice and I've come up with 1824.99 both times (unless the £50 rent arreas is not included and is extra?) so that's £50 saved straight away!

You get paid monthly, so I would say that as soon as you are paid you need to cover the priorities- Mortgage, Rent and Council Tax. They are the big three that MUST be paid. The rest of your outgoings not including the credit cards come to £773- which your husbands wage will easily cover. If you re-jig your DD dates so that the money your husband put is each week covers the DD's that week and food (which you could easily cut down if it's just the two of you), you will have enough by about WK 3 of the month to pay a DD for your husbands loan (which I've included in that £773 figure).

From your wage you are then looking at a surplus of £288 minimun each month which can all go towards credit cards and the overdraft. If you contact the bank and explain you are having problems they MAY freeze interest and charges on the account- this is definitely worth looking into.

Some of that £288 can then be used to go towards clearing the OD a bit, the rest on credit cards. Put the amounts into the what's the cost calculator to work out how much you should put on each one.

The last area I would look at is how much your husband is paying into the account- if he's putting in £225 each week then average that to 4.3 weeks per month. This means that from his £1200 only £967.50 per month is going into the bank.

As I said at the beginning of the post, if you both keep a spending diary then you will see where all this money is going.

I've worked this out by starting with what you earn and working backwards- allocating that money to each thing and seeing what's left. This is the only way if you want to budget it- otherwise human nature means we will spend more than we've got and then be left wondering 'where does it go??!!'.

Well done for posting and stick around!

hw123

When opening up a basic bank account make sure its with a bank or building society that you currently have no debts with. regaurding DD's and SO's only set these up for your priority's with your credit debts pay these manually either using giro slips or postal order that way you have control over your money and it stops creditors from taking a payment if you fall behind.:beer:

moobag_3

Its so nice to know people dont think im a total moron for getting into this mess specially since i used to take the moral high ground with hubby! My salary is good for my age you're right but I think thats part of the problem - iv got quite a good job and have got carried away and yes Capital One should be shot - I called them today to find out the interest rate, I knew it was high but 34%!!!!

In regards to the TV,Phone, Internet that is one of the biggest expenses and would so love to bundle it all up but the TV is with Virgin and phone and internet with BT and both are contract that are only about 6 months old so dont think we can move them.

I've been thinking about moving my bank account like some of you said, but with a £1000 overdraft will halifax let me pay it off like that without having a regular income going into the bank? You're v right tho the overdraft and charges are crippling me. I'm in the process of claiming some money back from HSBC but obvioiusly now iv had the letter saying about the OFT case.

I cant move to 0% as no one else will hve me - my credit rating is shot to pieces.

Def know mortgage etc is priority already have those DDs set up to come out the day I get paid - it doesnt help that Preferred are a bad credit lender so we're on a variable rate and its gone up by £150 a month since we started last yr.

There are lots of great ideas here, going to go back and read all the posts again and write everything down. I dont know how to thank everyone individually on the posts but I really am grateful. x