New start to pay off my debts.

Mumoffourkids

Okay, so I finally decided to face up to my debts and now my income is pretty much stable, I can now budget and work out how much to pay. My soa us below and I just want to know if there is anything I have missed budget wise. I know I have a big surplus but this is only recent and from the new year I want to start paying everything off.

But I have six kids and obviously I don't want them to go without. Has anyone else still lived a little whilst paying off debts?

I know that if I threw everything at the debts that I could be debt free a lot sooner but I can't expect the kids to live like that really.

Any advice welcome by the way.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 6
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 900
Partners monthly income after tax....... 0
Benefits................................ 3527.64
Other income............................ 975
Total monthly income.................... 5402.64

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1200
Management charge (leasehold property).. 0
Council tax............................. 93
Electricity............................. 120
Gas..................................... 10
Oil..................................... 0
Water rates............................. 63.54
Telephone (land line)................... 10
Mobile phone............................ 51.81
TV Licence.............................. 12.37
Satellite/Cable TV...................... 39.98
Internet Services....................... 10
Groceries etc. ......................... 433.33
Clothing................................ 100
Petrol/diesel........................... 260
Road tax................................ 25.83
Car Insurance........................... 120
Car maintenance (including MOT)......... 100
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 1000
Other child related expenses............ 140
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 7.27
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 150
Haircuts................................ 0
Entertainment........................... 303.33
Holiday................................. 50
Emergency fund.......................... 0
Total monthly expenses.................. 4310.46


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Overdraft......................1000......30........0
Catalogue......................247.......60........0
Catalogue......................593.......35........0
Old debts......................20000.....0.........0
Tax credits....................410.......0.........0
Total unsecured debts..........22250.....125.......-


Monthly Budget Summary
Total monthly income.................... 5,402.64
Expenses (including HP & secured debts). 4,310.46
Available for debt repayments........... 1,092.18
Monthly UNsecured debt repayments....... 125
Amount left after debt repayments....... 967.18

Personal Balance Sheet Summary
Total assets (things you own)........... 500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -22,250
Net Assets.............................. -21,750

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

[Deleted User]

At a glance how is your landline only £10 per month? And why is your mobile an eye watering £52 a month?

datlex

Let me get this straight you get enough on benefits to have an income equivalent to £64,000 a year! I thought there was a benefit cap?

NekoZombie

Did I read correctly that you’re spending £1000 on nursery fees to earn £900. The numbers are rather incredible.

Mumoffourkids

I kind of wish I hadn't posted now. But in response to your questions.

My landline is in with my sky TV and internet. I don't use the land line at all and don't have a phone plugged in. That's just the line rental cost I believe.

The mobile is for three phones, mine and my two eldest daughters. They don't have the latest iPhones by any stretch of the imagination and in fact my eldest bought her own phone and we are on giffgaff.

Yes I get a lot in benefits but it is only what I am entitled to with having six kids and as I said before this had only just been in the last couple of months.

I work because I am trying to show my kids that it is good for you to work and because without going to work, I would a) go slowly crazy being at home!e all the time! And b) as someone said about the benefit cap, I would come under the benefit cap. Some of my benefits are the childcare element of working tax credit.

Surely it is better for me to go out to work and pay something back into the system rather than sit at home and do nothing all day.

starting_again_in_the_sun

Hello and welcome to the forum,

Don't worry about the negative comments. No one knows anything about your circumstances, so we aren't in a position to judge. For what it's worth, I think it's great you're working, no doubt your income will increase in the future and your childcare costs will decrease.

Regarding your SOA, I think the most important thing is whether you actually have £967 left at the end of the month? If not, keep a spending diary to see where it goes.

Present budget is £1800 a year, this could probably be cut a little.

Where do you go on holiday? £600 a year for 7 of you is very cheap.

Good luck on your journey.

Mumoffourkids

Thanks starting again.

No at the moment I don't have that money left at the end of the month as I have only just had this income since November and have been trying to play catch up with paying people back and getting sorted for Christmas! Also two if the kids have birthdays in december - expensive month!

Yes in April my childcare costs will reduce as my son will get 30 hours a week funded, but then my tax credits will also reduce. Then in September my youngest will get 15 hours a week funded so again childcare costs will go down but so will tax credits.

Yes I wanted to put a figure on presents and try and save that each month. Then I will try and shop around to save money. If I have presenting left over, I will use to pay off debts.

Holiday is camping and as we have all the equipment, it doesn't cost us much. Camping for a week is about £250 on a site in Cornwall in the summer holidays. Food will be from normal budget and the remaining will be treats for he kids like ice creams.

-taff

What are the old debts?

Are you planning to pay off all the debts, or going on to a DMP? What are the interest rates for the debts?

Start by keeping a diary of what you spend and when. A budget that is what you think it should be is not actually what it actually is, so you should be working out exactly how much you spend on monthly unavoidable bills, and what you spend on things that aren't a necessity. While your budget sort of reflects that at the moment, if the surplus that's showing is not actually what you have, you need to know where it's going.

You could pay your debts off by highest APR first, or by smallest amount first, so you get the boost of paying something off completely.

Then think about an emergency fund, because you'll need one if your car or your washing machine goes on the fritz.

Also, 1800 a year on presents, even if you have 6 kids, is a lot. That's 300 per child.

Cable tv is expensive, can you sitch to maybe netlix and a standlone broadband deal? Have you switched your electric recently?

Mumoffourkids

Thank you for taking the time to reply taff.

The old debts are three credit cards, one loan and an overdraft that I haven't been paying. They are no longer with the original banks so I am trying to sort out who they are with in order to start repaying them. I am undecided as to whether to go onto a DMP with a company or try to do it myself.

I do try and keep a diary of what I spend but this amount of income is relatively new to me. I also had a period wherein had no benefits apart from child benefit so had to borrow money from family to pay rent and buy food. This month the surplus has been spent on Christmas and birthdays. But from January if I stick to this budget, this is the amount I should have spare to pay off my debts.

My electric I am in contract for at least another month as last January I got smart meters fitted and I receive free electric on Sundays. I will check when my contract ends though and start looking for better deals.

The presents budget works out to £150 per child for Christmas, £100 per child for birthdays and then £300 for extra birthdays throughout the year such as birthday presents for parties the kids get invited to which with six kids is quite a lot! With regards to the presents it sounds slot on each child but they tend to get useful presents such as duvet covers, clothes, pyjamas and only one or two toys each.

Yes I plan to start saving an emergency fund because my car will not last forever and I definitely would not be able to cope without my washing machine. Would creditors allow an emergency fund saving each month then?

That amount for TV includes Netflix and now TV but I am thinking about cancelling the now TV as we don't use that one. I pay less for sky TV, phone and broadband than I used to pay for BT just phone and broadband so I have saved something but I will look at changing that when my contract runs out.

-taff

If the debts are really old like near enough six years and you haven't paid anything towards them for a while, either ignore them and ese what letters you get, or when the debts have been sold on and they start sending you letters again, send the prove it letter.


If you do go decide to do a DMP, don't pay a fee paying company. Stepchange will do it for free, also CAP. You can do it yourself if you like.

Not sure if you can do a DRO, have a look on the national debtline website.

And do ignore the idiots who like to have a pop, it's very frowned on here. Usually though, SOurcrates has good advice....he must have had a funny five minutes today don't let that put you off listening to him when he does chime in again

-taff

Also, start listing your monthly bills individually. If you included Netflix in the total amount for the TV, then that's one bill you're not seeing as separate and neither are we.
Break it down bill by bill, not collected together, because you can see where you can cut things out more easily.
ALso, if your paying anything weekly/monthly that is not a household bill, put another column to the left and add it up to a yearly amount, that should decide you on your priorities as far as non essential spending goes.