Looking for a little advice to get on the right track - SOA attached

matt91

So there's a few reasons why its easier for me to find a second job than for her to get one:

-She is the only one who can drop off and pick up our daughter from school. No other family members live close enough to be able to do so. The school has a breakfast club which she could go to but currently do not offer an after school club, so ideally the job she is looking for is around 10am-2pm type shifts, which aren't impossible to find but are not easy
-I can drive which gives me a bit more flexibility than she would have for travelling to jobs
-She has a chronic back injury that does cause problems if she is on her feet all day. This could rule out the likes of retail sometimes, although at this stage she is applying to any job she can find
-A lot of christmas temp jobs need a lot of flexibility which we don't really have. Especially once the christmas holidays come round, my partner will need to be looking after our daughter all day, which would be when most shops would want as many people to work as possible

EssexHebridean

OK - let's take a look:

matt91 wrote: »

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2378
Partners monthly income after tax....... 0 As established she needs to do whatever she can to increase this
Benefits................................ 0 Are you too high an earner for child benefit?
Other income............................ 0
Total monthly income.................... 2378

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 235
Rent.................................... 750
Management charge (leasehold property).. 0
Council tax............................. 108.94
Electricity............................. 39 Keep an eye to make sure you're on the best tariff for this and your gas
Gas..................................... 39
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 73 Extortionate. Assume this is two phones but still - as soon as you're out of contract switch to SIM only.
TV Licence.............................. 12.12 I think this has just gone up by a few pennies, no?
Satellite/Cable TV...................... 29
Internet Services....................... 0
Groceries etc. ......................... 400 For three of you this is really high -
you can certainly knock £100 off and in fact with a bit of work you could halve that spend easily.
Clothing................................ 20
Petrol/diesel........................... 90
Road tax................................ 11.81 Do you actually pay this monthly?
If so bear in mind they charge a premium for you doing so - better to set money aside ready to pay annually ASAP when you can.
Car Insurance........................... 59.85
Car maintenance (including MOT)......... 0 You need something here - medium mileage I assume? Allow £25 a month as a starting point I suggest.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 40 What's this? Anything that can be trimmed/cut out?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 11
Buildings insurance..................... 7
Contents insurance...................... 0 I presume this should read 7, and the line above zero?
Life assurance ......................... 0
Other insurance......................... 12 Is this essential?
Presents (birthday, christmas etc)...... 50 You're not spending this amount every month I assume, but you're showing no cash assets, so where is this being saved? In any event, you have debts, for now this is too high - cut back dramatically until you're debt free
Haircuts................................ 0 Never? Are you all bald?
Entertainment........................... 100 Cut this by half and allocate the other £50 to your emergency fund
Holiday................................. 0
Emergency fund.......................... 0 See above.
Total monthly expenses.................. 2107.72


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 1500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 8000.....(235)......10
Total secured & HP debts...... 8000......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card 1..................1561......22.69.....6.684 Is this a "life of balance"
rate? Are you allowed to balance transfer to the card at that rate? If so move card to across there, assuming you can't get any 0% deals to shift to.
Credit Card 2..................2010......44.17.....13.96
Total unsecured debts..........3571......66.86.....-


Monthly Budget Summary
Total monthly income.................... 2,378
Expenses (including HP & secured debts). 2,107.72
Available for debt repayments........... 270.28
Monthly UNsecured debt repayments....... 66.86
Amount left after debt repayments....... 203.42 Do you actually have this amount left?

Personal Balance Sheet Summary
Total assets (things you own)........... 1,500
Total HP & Secured debt................. -8,000
Total Unsecured debt.................... -3,571
Net Assets.............................. -10,071

First thing that jumps out - in your OP you said your take home was £2300, your outgoings are £2100 but that "other £200 disappears quickly in a couple of day trips...etc" - first off stop viewing that £200 as disposable income. You've got a 3100 entertainment budget in the SOA - but in fact what you're actually spending is three times that isn't it.

First step - set the DD's to the credit cards (so long as you're not using the credit cards - this ONLY works if you're not spending on them) to £50 and £25 - ie rounded up from the current minimums - and leave them there - this means that each month you're chipping a little more off the balances without even trying.

If there is a pre school club at the school this will run from what, 8am? Earlier? So your GF can potentially get a job that will let her work 8.30 - 2.30 or thereabouts? that's *nearly* a full shift. You're already working a full time job - for you to get a second job is a quality of life step you can do without when there is a sensible alternative.

Make the savings we've suggested - there is a massive one relating to groceries for a start - that could increase your surplus to £300 a month for a start - and you can increase that even further by having a seriously tight few months. Throw EVERY spare penny at the debt - it's not as bad as you think if you imagine being able to lob £400 a month at it - you'll have card 2 gone in 5 months, then throw everything including the payment that was going to card 2, at card one, and that will be gone in another 3 months. You've then got £500 or so a month to set aside against getting shot of that loan.

Do NOT be tempted down the line of consolidation again - you've already seen why we advise people against this - it simply doesn't work unless ALL the groundrules are in place first. Frankly, your budget is terrible so it never WAS going to work for you - in fact it's cost you more.

Stick to your (tightened) budget. Help your GF find a job - even just something part time. make savings wherever you can and be willing to make sacrifices for a while - you could viably be debt free in 18 months.

matt91

EssexHebridean wrote: »

OK - let's take a look:



First thing that jumps out - in your OP you said your take home was £2300, your outgoings are £2100 but that "other £200 disappears quickly in a couple of day trips...etc" - first off stop viewing that £200 as disposable income. You've got a 3100 entertainment budget in the SOA - but in fact what you're actually spending is three times that isn't it.

First step - set the DD's to the credit cards (so long as you're not using the credit cards - this ONLY works if you're not spending on them) to £50 and £25 - ie rounded up from the current minimums - and leave them there - this means that each month you're chipping a little more off the balances without even trying.

If there is a pre school club at the school this will run from what, 8am? Earlier? So your GF can potentially get a job that will let her work 8.30 - 2.30 or thereabouts? that's *nearly* a full shift. You're already working a full time job - for you to get a second job is a quality of life step you can do without when there is a sensible alternative.

Make the savings we've suggested - there is a massive one relating to groceries for a start - that could increase your surplus to £300 a month for a start - and you can increase that even further by having a seriously tight few months. Throw EVERY spare penny at the debt - it's not as bad as you think if you imagine being able to lob £400 a month at it - you'll have card 2 gone in 5 months, then throw everything including the payment that was going to card 2, at card one, and that will be gone in another 3 months. You've then got £500 or so a month to set aside against getting shot of that loan.

Do NOT be tempted down the line of consolidation again - you've already seen why we advise people against this - it simply doesn't work unless ALL the groundrules are in place first. Frankly, your budget is terrible so it never WAS going to work for you - in fact it's cost you more.

Stick to your (tightened) budget. Help your GF find a job - even just something part time. make savings wherever you can and be willing to make sacrifices for a while - you could viably be debt free in 18 months.

Thanks for the advice, I will take all of it on board Its reassuring to see that with a few smallish changes it can speed up the time it takes to pay off my debts fairly significantly, which is ideal. If I got to the stage where I wasn't paying credit cards and loan each month, I'd have an extra £300 straight away I could put straight into a savings account in order to build up for the future

Its a bit frustrating as far as the debt consolidation goes. In a sense it has worked great, in that before I got the loan I was tempted to keep using credit cards every so often (and sometimes even had no choice but to use them) whereas after the loan I got to the stage where I hadn't touched any credit cards in months, which was a huge achievement for me

I currently have direct debits of £30 and £55 in my credit cards, to make sure I'm chipping away at the balance a little bit. My intention is always if I have some money left over I don't need, I could throw that onto one of the cards as well, but it always turns out by the end of the month I have so little left that its impossible to do so

We tried to save up at one point as well, having £100 go into a savings account with the intention of accumulating £1000, then using that to pay off a big chunk of a credit card in one go. That was another thing where we had good intentions, but a week or so before payday I would find myself needing to transfer the money back into my account in order to stop myself going over my overdraft

I think you're right in that some big savings can be achieved in grocery shopping if we work hard. A few months ago we stopped going shopping at Sainsburys because it was so expensive and switched to Morrisons, which cut our bill from around £100 or more like £75, but it seems to have slowly crept up the past few months without us really having any extra to show for it. We are fairly bad in the sense that we tend to buy a lot of ready made oven meals from the supermarket rather than making them from scratch, purely out of laziness on our parts, which we could definitely improve on

As for my entertainment budget, the £100 is definitely a ballpark figure. I intended this to include things like Netflix (I don't use it but my daughter really loves it, and feel bad depriving her of it) and days out etc. Previously I have had bad habits of buying a game or two a month, though I am stopping a lot of that now in an attempt to kerb my spending

We do receive some child benefit I believe, which isn't too bad, but its not much due to my wage, and we can't get any other benefits because I am above the cap. Its incredibly frustrating because I consider myself very lucky to get the wage that I do, and yet I see no benefit to having it. I feel no better off than I was when I was at university and working part time in retail

The mobile phone bills are fairly high. My partners contract runs out in december, when she is intending to go onto a SIM only deal which will save us a bit of money there

EssexHebridean

The pre-prepared food needs to stop right now. Your GF isn't working for goodness sake - she HAS to pull her weight at home to make sure that life is run on as tight a budget as it can be.

A few years ago we made the decision for me to switch to working 4 days a week - I work full days for those four, but the trade-off as far as I was concerned was that I would ensure that I shopped around for really good deals on groceries etc to keep our costs as low as possible. To give you an idea of what is possible - we buy free range eggs, and most of our meat is from farmers markets or direct from suppliers - higher welfare only. We eat seriously good food, but it is all cooked from scratch, and currently we spend under £150 a month for food, cleaning materials and basic toiletries for the two of us. So basically, we're not in any debt and I'm spending £250 a month less than you guys - if I owed £11k plus that figure would be slashed even further.

Your GF needs to be cooking meals from scratch, and planning those meals to ensure that nothing is wasted. Also keeping an eye on Aldi & Lidl for the S6/Pick of the week type deals. why on earth would you want to be feeding your child ready meals when they could be eating freshly cooked and prepared with love food instead?

You say there is Child benefit coming in - but that should be included on the SOA - where is it being spent, currently? That's another £80 a month that you're currently not accounting. Child benefit is not related to wages until you reach the point where you no longer qualify - it's a standard amount for the first child as far as I know.

On the consolidation - if it worked why do you now have £3571 owing on cards?

Entertainment - uh-huh to "Ballpark figures" - this is a BUDGET - this needs to be the maximum you look to spend in a month. Anything you can save on that figure, brilliant - more to the cards then!

Sorry if this seems harsh but at the moment I'm afraid your lightbulb moment hasn't quite arrived and your head is still at least partly planted in the sand...you can fix this situation, and quite fast, but you HAVE to be willing to take a grip on things, and I'm afraid that's going to include things like telling your GF that the child benefit is either going into a savings account for said child, or it's part of the main family pot.

Mnd

Ok I will be a bit blunt here, I don't mean to sound rude and this is supposed to be helpful

I have recently retired and my wife works full time, she is out for 11 hours a day.

I do not expect her to cook, clean up, hoover or anything and for you to say that you have ready meals due to laziness I find astounding. What does your girlfrien do all day, I think she is taking advantage of your good nature

zippygeorgeandben

I think that you need to start a daily diary to see where all this money is going. I'm in agreement with alot of the posters above and you've received some great advice. It's up to you whether you take it or not.