Trying to get this beaten

stinabean

Hello all, hoping I can get some advice.

My debt isn't huge by any means, but it's always just there.

I end up moving around our credit cards when the 0% runs out. We do pay monthly but probably not as much as we could. We are now expecting our first baby in July and have only recently secured our first Mortgage (august 2017) and we want to be debt free, bar mortgage as we'll tackle that once Credit Cards are sorted, as soon as possible - am very nervous of the months of SMP ahead of us.

I''ve done a form as below, I've tried to be as accurate as possible but I just don't understand some of the technical terms so please ask if anything looks ridiculous.

It says we have a fair chunk of money left. This is due to me budgeting £150 a month for groceries but only in my head as a goal - we tend to just buy what we want when we want (and end up skint).
I've not input a clothes spend as it's not regular and we usually only buy stuff when it's on sale so it's a little hard to track.

My main issue I think is I work all this out on paper fairly regularly, see the end money we have left and think "awesome, we're fine!" but we always end up in our overdraft every month and it has to stop. I need some ideas on how to manage my money, where to put it to stop spending etc.

Thanks for any help :j


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 1200
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2600

Monthly Expense Details
Mortgage................................ 575
Secured/HP loan repayments.............. 284.6
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118
Electricity............................. 31
Gas..................................... 42
Oil..................................... 0
Water rates............................. 24
Telephone (land line)................... 0
Mobile phone............................ 66
TV Licence.............................. 12.12
Satellite/Cable TV...................... 50
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 60
Road tax................................ 10
Car Insurance........................... 40
Car maintenance (including MOT)......... 16
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 9
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 28
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 0
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1595.72


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


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 146775...(575)......3.04
Car.................. 3318.05..(184.6)....6
Sofa ...... 1100.....(100)......0
Total secured & HP debts...... 151193.0.-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax........................1950......19.51.....0
Barclays.......................1511......57.73.....0
Total unsecured debts..........3461......77.24.....-


Monthly Budget Summary
Total monthly income.................... 2,600
Expenses (including HP & secured debts). 1,595.72
Available for debt repayments........... 1,004.28
Monthly UNsecured debt repayments....... 77.24
Amount left after debt repayments....... 927.04

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -151,193.05
Total Unsecured debt.................... -3,461
Net Assets.............................. -154,654.05

enjoyyourshoes

I would sit down with partner &:-

1.0 Agree life goals and put these in financial terms

2.0 Start accruing for annual 1/2 & 1/4 ly bills (I see you pay insurances monthly than annually, this costs in credit costs). Include xmas birthdays and hols etc. This combined with cash flow you can calculate a monthly amount you need to accrue .

3.0 Reconcile you bank account daily with all charges against it. Each month account for all DD/SO plus above accrual.
Know where you are financially every day

4.0 Review this monthly to plan how to save and spend less

5.0 Meal plan weekly for all meals, take stock before you shop and make a list (this can be a cumulative list noting down when a staple has been used and put this replenishment on your shopping list

6.0 Sotp all , sky, expensive none sim only mobile, cafe rates, lotto, fags, mags, booze, take aways, subscriptions

7.0 Review long term contract 1 month before they are due for renewal and investigate cheaper options (telephone, insurance etc)

8.0 pay off highest APR credit first and plan to pay off al 0% deals before term expires, set up DD to do so

9.0 Start regular savings accounts (FD or HSBC)

10.0 If your a spender, work out the triggers as it psychological and have strategies to remove these triggers

immoral_angeluk

You need to try and overpay the unsecured debts as paying off the minimum payments just delays the inevitable and takes decades to repay.
Maybe have a look at keeping a spending diary to work out any gaps in your financial statement that accounts for where the 'spare' cash is going..

Ilona

stinabean wrote: »

It says we have a fair chunk of money left. This is due to me budgeting £150 a month for groceries but only in my head as a goal - we tend to just buy what we want when we want (and end up skint).
I've not input a clothes spend as it's not regular and we usually only buy stuff when it's on sale so it's a little hard to track.

Hi. I'll let the others comment on the SOA, but these two points stick out to me.

Two areas where you don't know what you are spending. Guess work is not enough. I suggest you keep a spending diary so you know where every penny is going.

Try taking out £150 in cash every month for your groceries, when that's gone there is no more. No dashing to the shop for something you have forgotten and coming back with a bag full of stuff you didn't need.

Write down what clothes you buy in the sale. If you bought a £100 coat, divide that amount by twelve to get the monthly figure. Keep receipts, keep the tags. Only buy what you absolutely need, shoes with holes in, tatty underpants, etc, not what you fancy buying in the sale.

It takes discipline, you can do it.
Ilona

National_Debtline

Hi Stinabean,


I have included some comments below in red on your budget to try and help you. It can be difficult when you first do a budget, so don't be too hard on yourself. A spending diary is great way to get started but you can also look through your bank statements and receipts to get a better idea of things like the food and clothing budgets. It is important that you budget accurately and include as much as you can.

stinabean wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 1200
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2600

Monthly Expense Details
Mortgage................................ 575
Secured/HP loan repayments.............. 284.6
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118
Electricity............................. 31
Gas..................................... 42
Oil..................................... 0
Water rates............................. 24
Telephone (land line)................... 0
Mobile phone............................ 66 This is quite high, when the contracts can be reduced, I would suggest you do that.
TV Licence.............................. 12.12
Satellite/Cable TV...................... 50
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 0 You need to have a monthly budget towards this even if you don't spend it every month - keep the money to one side.
Petrol/diesel........................... 60
Road tax................................ 10
Car Insurance........................... 40
Car maintenance (including MOT)......... 16
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 9
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 You should have both buildings and contents insurance as a home owner.
Contents insurance...................... 0
Life assurance ......................... 28
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 0 Is this really £0?
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0 You should have a regular budget towards emergencies. You could start by saving £50 per month between you to build something up, especially if you are going on maternity soon.
Total monthly expenses.................. 1595.72


Assets
Cash.................................... 0
House value (Gross)..................... 0 You should list what you paid for the house as it is making the final calculation inaccurate.
Shares and bonds........................ 0
Car(s).................................. 0 As above
Other assets............................ 0
Total Assets............................ 0


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 146775...(575)......3.04
Car.................. 3318.05..(184.6)....6
Sofa ...... 1100.....(100)......0
Total secured & HP debts...... 151193.0.-.........

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax........................1950......19.51.....0
Barclays.......................1511......57.73.....0
Plus the overdrafts – they should be included here as they are a debt that costs you money.
Total unsecured debts..........3461......77.24.....-


Monthly Budget Summary
Total monthly income.................... 2,600
Expenses (including HP & secured debts). 1,595.72
Available for debt repayments........... 1,004.28
Monthly UNsecured debt repayments....... 77.24
Amount left after debt repayments....... 927.04 This is a massive surplus to ‘misplace’ each month

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -151,193.05
Total Unsecured debt.................... -3,461
Net Assets.............................. -154,654.05

I would agree that you need to overpay the debts and start a savings pot as well. An emergency fund is always useful as a homeowner, but you also need one to help cover things like maternity leave when your money will be reduced. It doesn't seem like there is any reason why you can't clear the credit cards, and hopefully the overdrafts, within the next 7 months (before you go on maternity) if you spend what you write on your budget.


I would also suggest changing bank accounts could help. Move to a new banking group where you don't owe any money and only have a basic account - no overdraft. This will mean you have to live within your budget and then you can make regular repayments to the overdraft like it is a credit card (and hopefully they won't call it in if you do that). A key thing to remember is to try and ensure your budget is accurate and not the optimistic version you would like. Best of luck,


Laura
@natdebtline

EssexHebridean

Comments in red as usual...

stinabean wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 1200
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2600

Monthly Expense Details
Mortgage................................ 575
Secured/HP loan repayments.............. 284.6
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118 If you don't already do so think about paying this over 12 months next year - and remember if you currently pay over the usual 10 you have 2 months coming up where this amount can be paid straight off against a debt.
Electricity............................. 31 Check your electricity & Gas and make sure you're on the best tariff you can be for your use.
Gas..................................... 42 usual - turn the thermostat down a degree or two and pop a jumper on!
Oil..................................... 0
Water rates............................. 24
Telephone (land line)................... 0
Mobile phone............................ 66 This is steep - if you're nearing the ends of contracts think about going SIM only
TV Licence.............................. 12.12 Sure? Ours has increased by a few pence on that figure?
Satellite/Cable TV...................... 50 Probably be a good idea to get this gone or at least the package reduced while your income is reduced.
Internet Services....................... 0
Groceries etc. ......................... 150 From what you've said though I bet it's not.
Spending diary and note EVERYTHING!
Clothing................................ 0 You need to start budgeting something here as otherwise this is where you get caught out. Budget and set money aside, then whatever doesn't get spent can be shuffled across to debt as a surplus builds.
Petrol/diesel........................... 60
Road tax................................ 10 Tell me you're not paying this monthly?
Total false economy - start budgeting monthly for it ready to pay as a lump sum next time round!
Car Insurance........................... 40
Car maintenance (including MOT)......... 16 Is this enough/realistic? does it cover everything? MoT Test, service, new tyres as and when needed, wiper blades, screenwash?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 9
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 In which case you are almost certainly in breach of the terms & conditions of your mortgage...
Contents insurance...................... 0 And get that sorted while you're about it too - I know I couldn;t afford to lose ALL my possessions if the worst happened, can you?
Life assurance ......................... 28
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 0 You never had a haircut, ever?
Entertainment........................... 30 This seems quite low - have you added up all the oddments that gets spent - coffee out here, a magazine there, maybe a meal out once a month, a takeaway here and there?
Holiday................................. 0 You never go on holiday and you're not planning to change that?
Emergency fund.......................... 0 You definitely need to have this in place
Total monthly expenses.................. 1595.72


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


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 146775...(575)......3.04
Car.................. 3318.05..(184.6)....6
Sofa ...... 1100.....(100)......0
Total secured & HP debts...... 151193.0.-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax........................1950......19.51.....0
Barclays.......................1511......57.73.....0
Total unsecured debts..........3461......77.24.....-


Monthly Budget Summary
Total monthly income.................... 2,600
Expenses (including HP & secured debts). 1,595.72
Available for debt repayments........... 1,004.28
Monthly UNsecured debt repayments....... 77.24
Amount left after debt repayments....... 927.04 OK if you're saying you don;t have this then you absolutely MUST track down where it's going.

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -151,193.05
Total Unsecured debt.................... -3,461
Net Assets.............................. -154,654.05

You need to start using a proper budget and setting money aside for things, and above all you have to start tracking down where that surplus is going - at the moment that is over ELEVEN THOUSAND POUNDS per year that's going astray - or enough to pay off your card debt nearly three times over. Yes, makes you think when you look at it that way, no?

I suggest that you stop and think EVERY time you go to spend money. And stop using contactless/card payments as well - you have enough money monthly to more than cover your needs so start taking out cash for things like food. Meal plan, write a shopping list and stick to it, and if you get overcome by temptation when you're in the shop order for home delivery instead - truth be told you'll save more than the delivery cost.

The good news is that unsecured card debt can be gone easily by the time your income drops - which is a good thing as you're going to need every spare penny then, by the looks of it!

Mnd

Good luck on the 150 groceries, we don't get that low and we are 2 adults, 1 is a vegetarian and I grow a load of veg, don't forget odd trips to get milk and you manage to spend £15...I know, we do it!
I also think your mobile phone bill is high..we pay £20 for 2 from tesco

stinabean

Thank you so much for these replies they've been very helpful!

I will address the comments in red when I'm on a PC next - just wanted to re-assure that we do have building and contents but as we paid for it in one go when we bought the house it didn't register in my head as a monthly outgoing

Also, no to haircuts not had one for years as I do my own and OH is growing his. Won't let anyone near him with scissors 🙄

Drawingaline

How did you pay in one go? Set money aside each month for it so that you know that you have it there when it is time to renew. So either open a savings account to transfer these things into (car maintenance, clothing, any annual renewals like insurance) or use an envelope type budget, I use YNAB, but there are other ones available. In these you have an app where you set up categories and allocate money on a monthly basis and you check the category before spending from it.

I set £50 aside a month for clothing, it normally gets spent lol! This month on tap shoes for my daughter.

You are in a strong position to plug this hole quickly, but you need to do it together. Set a budget (realistic) by going through bank statements to see where money is going, and I would suggest using cash weekly for food and entertainment at least for a month to give you an idea where it is all going.

Good luck :beer:

stinabean

Was able to pay in one go as we had lots of money saved up for the house purchase for extras such as Solicitor fees, we had some left which we used for things like that. I will work out how much to save ready for the renewal.

We struggle using cash for food purely because I usually order online. I work from home so I'm always here, and the OH has the car every day for work so is convenient. Maybe I could take the cash out into an envelope as suggested and track it that way, putting it back in to the account as and when... I'll have a think.

Do people usually create many standard bank accounts and categorize them for Food, Car, annual renewals etc to keep track easily? I'll take a look at this app you've mentioned too. I just find it difficult keeping track of it all, but would love to be organised!

stinabean

Responded in blue - I can't thank you guys enough for the help this will really help me get off to a better start !

Council tax............................. 118 If you don't already do so think about paying this over 12 months next year - and remember if you currently pay over the usual 10 you have 2 months coming up where this amount can be paid straight off against a debt.
Good idea – will request it’s over the 12 months next year
Electricity............................. 31Check your electricity & Gas and make sure you're on the best tariff you can be for your use.
Recently moved in and just had our first quarterly bill through, so now have something to compare to. Will do this.
Gas..................................... 42usual - turn the thermostat down a degree or two and pop a jumper on!
We are overpaying on Gas as the company just said “3 bed end of terrace, this much” but I am aware we can lessen our Direct Debit – we are currently in credit with Gas.
Mobile phone............................ 66 This is quite high, when the contracts can be reduced, I would suggest you do that.
Both of ours end Dec 2018 (£33 each) and will definitely be reducing as soon as we can.
Satellite/Cable TV...................... 50Probably be a good idea to get this gone or at least the package reduced while your income is reduced.
Will look at this, we don’t want as much TV as we used to as it’s all Netflix etc.
Clothing................................ 0 You need to have a monthly budget towards this even if you don't spend it every month - keep the money to one side.
Didn’t occur to me – will do this, thank you.
Road tax................................ 10Tell me you're not paying this monthly?
Total false economy - start budgeting monthly for it ready to pay as a lump sum next time round!
Sadly yes and I don’t even know why. Will do lump sum! Pretty sure it’s a new year for it soon.
Car maintenance (including MOT)......... 16Is this enough/realistic? does it cover everything? MoT Test, service, new tyres as and when needed, wiper blades, screenwash?
This was for a service and MOT and not extras, will re-calculate
Buildings insurance..................... 0 You should have both buildings and contents insurance as a home owner.
This was one lump sum-ed when we moved, will start putting a monthly amount by ready for renewal.
Haircuts................................ 0 Is this really £0?
Yep. Will put a small amount by in case I feel like treating myself but tend to sort mine myself.
Entertainment........................... 30This seems quite low - have you added up all the oddments that gets spent - coffee out here, a magazine there, maybe a meal out once a month, a takeaway here and there?
Will re-calculate, didn’t factor takeaways.
Holiday................................. 0You never go on holiday and you're not planning to change that?
Sadly never. OH refuses to get on a plane though I am working on him having some car based holidays so will re-calculate for that.
Emergency fund.......................... 0 You should have a regular budget towards emergencies. You could start by saving £50 per month between you to build something up, especially if you are going on maternity soon.
100% agree but always felt wrong making savings when I have debt. Do you have any advice on how I should split debt and emergency fund savings?
House value (Gross)..................... 0 You should list what you paid for the house as it is making the final calculation inaccurate.
Apologies, this was £165,000 will update when I have done the above and re-do the form. I was told as it was a debt it wasn’t an asset and is considered a liability?
Car(s).................................. 0 As above
As above, will amend.
Plus the overdrafts – they should be included here as they are a debt that costs you money.
Our overdrafts are always paid off with wages and we rarely go more than £100 in each (due to not paying attention) so it therefore fluctuates each month.