Help please. outgoings huge

phil_rich1983

Hi All,

We have been living on the limit for a long while now and cannot seem to bring down out monthly outgoings to help cut out borrowing. We bought and renovated our house but it took longer and more £££ than expected and now we are struggling. we are a family of 2 adults, 4 kids 1 cat and 1 dog.

Below is our outgoings, please advise where you think we can cut things out.

Mortgage £1400 pm (fixed)
council tax £172 pm
Gas £75 pm (british gas)
Electric £120 pm ( npower)
Internet £55 pm (i work from home and need high speed reliable service)
Mobiles £120 pm (3 phones)
food 630 pm
kids swimming £112 pm
Kids music lessons £150 pm
kids dance lessons £20
school meals £71 pm
school bus £85 pm
car £300 pm ( all costs including finance)
coffee pods/machine contract £45 pm
insurance £62 pm
Birthdays £125 pm
Haircuts £65 pm
Christmas £150 pm
9 credit cards £235 pm minimunm payments
kitchen finance £178 pm
water £ 28
catalogue account £100

As you can see, we are looking at roughly £4300 pm outgoings, without days out or unexpected items etc.

Please feel free to pull it apart and offer any advice.

thanks

sourcrates

Hi,

You need to fill in a properly formatted SOA (and include your income).

Link here :

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

happyandcontented

How do those outgoings compare to income?

[Deleted User]

phil_rich1983 wrote: »

Hi All,

We have been living on the limit for a long while now and cannot seem to bring down out monthly outgoings to help cut out borrowing. We bought and renovated our house but it took longer and more £££ than expected and now we are struggling. we are a family of 2 adults, 4 kids 1 cat and 1 dog.

Below is our outgoings, please advise where you think we can cut things out.

Mortgage £1400 pm (fixed)
council tax £172 pm
Gas £75 pm (british gas)
Electric £120 pm ( npower)
Internet £55 pm (i work from home and need high speed reliable service)
Mobiles £120 pm (3 phones)
food 630 pm
kids swimming £112 pm
Kids music lessons £150 pm
kids dance lessons £20
school meals £71 pm
school bus £85 pm
car £300 pm ( all costs including finance)
coffee pods/machine contract £45 pm
insurance £62 pm
Birthdays £125 pm
Haircuts £65 pm
Christmas £150 pm
9 credit cards £235 pm minimunm payments
kitchen finance £178 pm
water £ 28
catalogue account £100

As you can see, we are looking at roughly £4300 pm outgoings, without days out or unexpected items etc.

Please feel free to pull it apart and offer any advice.

thanks

So much there to be cut...


For example, we have three mobile sim only contracts with perfectly good 'landed in my lap' smartphones and that comes to £12pm and we never run out of mins/txts/data.


What's so special about your commodity internet? Are you on a rural scheme? As you can get broadband/line rental deals for little over a tenner. Consider a business type router/firewall to prioritise your traffic over the kids at peak times?


Utilities are very high, are these carrying debt? Suggest doing a complete audit of electrical items/bulbs and remove unnecessary stuff leaching of you electricity bill and change high use lights to LED if any. Set back the gas too.


Food, ouch! Plan meals but very difficult if eating a different times due to clubs etc so lots of snacks. Batch cook?


Perhaps cut back on kids club rat race and do things as a family instead? That's what we are doing as clubs amounted to six days a week!


You will soon get used to Aldi/Tesco/ASDA fake gold blend and probably a good idea to remove all catalogues/subscriptions that make it easy to spend.


Netflix/NowTV/Amazon? - Bin all that and perhaps just do it for a month over Christmas?


Bin Sky/Virgin TV packages etc if any.


Might be a good idea to pretend you are moving house to seriously de-clutter to make sales through Gumtree etc for extra money? That's what we are doing and I though I was minimalist... So much stuff just hidden...


Cheers

ReadingTim

phil_rich1983 wrote: »

Mobiles £120 pm (3 phones) go SIM only -
no more than £15 per month, per SIM
kids swimming £112 pm - if they like swimming, ditch the music and dancing. Consider joining a club if they're simply having lessons with the local council - that might be cheaper
Kids music lessons £150 pm - if they like music, ditch the swimming and dancing
kids dance lessons £20 - if they like dancing, ditch the swimming and music
coffee pods/machine contract £45 pm - ditch this - you can't afford it
insurance £62 pm - consider ditching the insurance and paying out in the event something actually happens, which it probably won't. If you haven't claimed in the last year or two,
ditch
Birthdays £125 pm - per month? Are you sure?
Haircuts £65 pm - per month? Are you sure?
Christmas £150 pm - this is £450 per child, which is too much. You have to cut this down

You need a proper SOA to see where it's all going, but herewith some suggestions. Any other subscription services (sky, netflix, spotify etc) also need to be dumped. Finally, if you can't spend less, can you earn more?

tacpot12

Unlimited Internet should be £40 pcm or less.
Use GiffGaff for the Mobiles to get the cost down to £40 pcm

Can the Coffee machine contract be cancelled? This looks like a real luxury, and so I'm not surprised that you are struggling to reduce costs if you can't agree to eliminate luxury items from your budget.

I would look to prioritise clearing one of the debts, ideally the one with the largest interest rate, and stop using the catalogue account and the credit cards. You need to start clearing the debts, rather than adding to them, so only buy stuff when you have saved the money for it. The only exceptions should be true emergencies; e.g. boiler breakdowns. Really you should have an emergencies fund saved up, but it's a bit soon to start creating savings pots, so try to avoid having any emergencies for a couple of years!

You clearly have a good income, but need to divert more of this to clearing debts. Good luck with this. It can be done. I went from owing £12,000 on credit cards to owing nothing in about two and a half years. It was a great feeling to be finally clear of the debt!

tacpot12

Birthdays £125 pm - per month? Are you sure?
Haircuts £65 pm - per month? Are you sure?
Christmas £150 pm - this is £450 per child, which is too much. You have to cut this down
Originally posted by phil_rich1983

I'm not sure these figures are too high.

If the OP has an extended family they purchase birthday presents and Christmas presents for, they may be necessary. I save about half these amounts, but my partner saves similar amounts (but spends more than has been saved!)

We're also not clear if the "Christmas" pot is used for more than presents; it could be used to buy the extra food and drink people have in at Christmas.

I wondered about haircuts, but with six people in the household, this expense seems reasonable; especially given the exorbitant cost of ladies hairdressing.

Oakdene

tacpot12 wrote: »

I'm not sure these figures are too high.

If the OP has an extended family they purchase birthday presents and Christmas presents for, they may be necessary. I save about half these amounts, but my partner saves similar amounts (but spends more than has been saved!)

We're also not clear if the "Christmas" pot is used for more than presents; it could be used to buy the extra food and drink people have in at Christmas.

I wondered about haircuts, but with six people in the household, this expense seems reasonable; especially given the exorbitant cost of ladies hairdressing.

OP could look to local colleges for a cheaper cut, they often do mens & boys cuts for less than a fiver.

enthusiasticsaver

phil_rich1983 wrote: »

Hi All,

We have been living on the limit for a long while now and cannot seem to bring down out monthly outgoings to help cut out borrowing. We bought and renovated our house but it took longer and more £££ than expected and now we are struggling. we are a family of 2 adults, 4 kids 1 cat and 1 dog.

Below is our outgoings, please advise where you think we can cut things out.

Mortgage £1400 pm (fixed)
council tax £172 pm
Gas £75 pm (british gas)
Electric £120 pm ( npower)
Internet £55 pm (i work from home and need high speed reliable service)
Mobiles £120 pm (3 phones)
food 630 pm
kids swimming £112 pm
Kids music lessons £150 pm
kids dance lessons £20
school meals £71 pm
school bus £85 pm
car £300 pm ( all costs including finance)
coffee pods/machine contract £45 pm
insurance £62 pm
Birthdays £125 pm
Haircuts £65 pm
Christmas £150 pm
9 credit cards £235 pm minimunm payments
kitchen finance £178 pm
water £ 28
catalogue account £100

As you can see, we are looking at roughly £4300 pm outgoings, without days out or unexpected items etc.

Please feel free to pull it apart and offer any advice.

thanks

Hard to comment on this without knowing what income you have or the level of debt/interest rates etc. You are only paying £235 to credit cards and if you have 9 I am guessing the balance of debt is quite high. A proper soa gives a better picture.

There is a lot on kids extra curricular activities. Fine if you can afford them but you obviously can't. We have a coffee pod machine too but would never pay £45 per month on pods for this. These are a luxury not a necessity as is the high birthdays, Christmas budgets although I appreciate you have 4 kids. You do still need to live within income. Ideally you would have saved up for house renovations.

Your utilities are also high so I think a more frugal frame of mind is needed to get to grips with your finances. Do you have any emergency savings? Are the cards on 0% as minimum payments will barely cover interest so they will never be paid off?

Ilona

phil_rich1983 wrote: »

Hi All,
We have been living on the limit for a long while now and cannot seem to bring down out monthly outgoings to help cut out borrowing. We bought and renovated our house but it took longer and more £££ than expected and now we are struggling. we are a family of 2 adults, 4 kids 1 cat and 1 dog.
Below is our outgoings, please advise where you think we can cut things out.

Mortgage £1400 pm (fixed)
council tax £172 pm
Gas £75 pm (british gas)
Electric £120 pm ( npower) Look closely at your usage, switch everything off when not in use. No gadgets left plugged in, Dry washing outside on a fine day. How many TV's do you have? Do they all have computers? Cut down if poss. Put a curfew on them.
Internet £55 pm (i work from home and need high speed reliable service)
Mobiles £120 pm (3 phones) PAYG is cheaper.
food 630 pm Could cut this down by £100, go for supermarket Value or Basics.
kids swimming £112 pm
Kids music lessons £150 pm
kids dance lessons £20 Kids activities. All of them? How many times a week? Why is the swimming so costly? Do they really want to do these activities?
school meals £71 pm
school bus £85 pm
car £300 pm ( all costs including finance)
coffee pods/machine contract £45 pm Get rid of this and buy a jar of nice instant. Pods are a fad, not a necessity.
insurance £62 pm
Birthdays £125 pm Is that for 4 kids? £1,500 a year, each or for 4? Too much.
Haircuts £65 pm Hair doesn't need cutting every month, 6 - 8 weeks is fine.
Christmas £150 pm Cut right back on Christmas.
9 credit cards £235 pm minimunm payments
kitchen finance £178 pm
water £ 28
catalogue account £100 Bin the catalogue, you don't need it.

As you can see, we are looking at roughly £4300 pm outgoings, without days out or unexpected items etc.

Please feel free to pull it apart and offer any advice.

thanks

I think your family have got used to getting everything they want, rather than what they need. You should all sit down together as a family round a table and include the kids in a talk about what you can afford and what you can't. Have a proper discussion, write numbers down on a paper. Your SOA will reveal more information that people can advise you on.

Ilona

phil_rich1983

Hi all, thanks for the comments, a couple of points I can comments on:

Income varies as i am self employed, but roughly averages £4500 per month take home. Wife doesnt work, we have looked for an option, but with school collections and clubs etc it would need to be very flixible and nothing is available around here.

Christmas budget - this is not just for our 4 children, this is to cover the cost of additional food, work night out, family and friends presents etc.

Kids clubs - not something we think should be cut down on. Teaching them to swim is IMO a vital life skill. we moved to a slightly more expensive lesson group about 12 months ago as the class sizes are max 4 rather than 10. Long term they will be 'finished' sooner so will cost less per child in long run. Again learning an instrument each doesnt see like a luxury, and daughter does dance instead of music.

Credit cards are all paying about 18.9% interest. Cannot switch. Credit score is wrecked.

Internet - We are with BT - superfast infinity. As i say, i need if for work all day and quite often video call so it needs to be fast and reliable. Plus we have No Tv subscriptions etc, so kids watch youtube or iplayer etc if they are having tv time, again this has to run at same time as my work. We tried talktalk who are cheapest and it was the worst service ever.

Electric - seem high to us too, but what should it be? I am slowly changing all bulbs to LED but they are not cheap.

Food - we do meal plan and batch cook. Also includes some pack lunches, plus also house cleaning products/ loo roll/ bin bags etc. What should we be aiming for here? our boys love fruit, they can eat a pack of 6 apples and 3 punnets of soft fruits between them in a day, and as we know fruit is not cheap.

Coffee - yes its is a luxury but we are stuck in the contract ( seemed good value at the time when we needed a new machine, 2 coffees each per day plus a machine for £1.50 per day). It supplies us with 140 pods per month, so we are now cutting our usage down, so we can stock pile the pods, so when the contract finishes, we can then use up the stock.

Mobiles - again, 2 stuck in contracts, 1 is sim only only at £12 per month. Do not have the spare cash to buy out the contracts of the other 2.

Haircuts - every 3 weeks for me and 3 boys, lady comes here, £25 for all 4. Wife and daughter have her every 6/8 weeks. She is cheaper than hairdressers. No local college.

Finally, do we have an emergency fund. No, we get to the end of the month with quite often £20 of our overdraft left available. £0 savings. All used on the house.

insurance - is only business and house, both of which are required to be kept.


Thanks for any pointers or comments.