Catching this cycle early(ish)

danny1990

Hi thanks for taking the time to read my thread.

As of a year and a half ago I managed to secure myself a property after struggling to save for the deposit for years. Since then, I've never really concerned myself with the importance of keeping on top of my funds as well as saving. Me and my partner both are not great with finances.

I think a reason for this is that my wage is very inconsistent. It can be very high or very low. However, I cannot choose what to earn, it is contract specific. So maybe after the first few eek wages where we can't afford anything I'll then pick up a good one and we end up spending the life out of it.

I'm ideally looking for some advice on how I can repay the current debt I am in, as well what to do there-after so I can actually put my money into something rather than spending it. It's not that we go buy new things, we just assume because there's a big balance there the money goes until there isn't then we're back to square one.

At present, until April I will receiving what I consider a relatively high wage. From April until August I will receive a low wage and from August to the rest of the year I will receive a high wage. This will be somewhere in the region of £5,400-£6,400 after-tax depending on how many days are in the month.

I've done an SOA it's not entirely accurate as far as APR's go as I'm not certain on how to check. Credit Expert doesn't appear to give me them. Another factor is I've gone from a 999 credit score when buying the house to a current 740 which I'm also not pleased about.

I've done two SOA to determine my incomes in the low and highs. However, in the High I have to account for working away which is why some of the bills are higher as I have to still pay for the family at home as well as my own expenses. Please read both to understand where I am at.

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2100
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 60
Total monthly income.................... 2160

Monthly Expense Details
Mortgage................................ 564.7
Secured/HP loan repayments.............. 299.6
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118
Electricity............................. 80
Gas..................................... 80
Oil..................................... 0
Water rates............................. 40.42
Telephone (land line)................... 0
Mobile phone............................ 39.91
TV Licence.............................. 38
Satellite/Cable TV...................... 43.49
Internet Services....................... 47.99
Groceries etc. ......................... 280
Clothing................................ 20
Petrol/diesel........................... 160
Road tax................................ 15
Car Insurance........................... 14
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 7
Contents insurance...................... 0
Life assurance ......................... 90.9
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Children's football..................... 40
Total monthly expenses.................. 2119.01


Assets
Cash.................................... 0
House value (Gross)..................... 107000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 122000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98200....(564.7)....5.2
Hire Purchase (HP) debt ...... 12000....(299.6)....3
Total secured & HP debts...... 110200....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2747......63.03.....NaN
Overdraft......................6000......0.........NaN
Total unsecured debts..........8747......63.03.....-


Monthly Budget Summary
Total monthly income.................... 2,160
Expenses (including HP & secured debts). 2,119.01
Available for debt repayments........... 40.99
Monthly UNsecured debt repayments....... 63.03
Amount short for making debt repayments. -22.04

Personal Balance Sheet Summary
Total assets (things you own)........... 122,000
Total HP & Secured debt................. -110,200
Total Unsecured debt.................... -8,747
Net Assets.............................. 3,053

Now for the higher wage
Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 5600
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 60
Total monthly income.................... 5660

Monthly Expense Details
Mortgage................................ 564.7
Secured/HP loan repayments.............. 299.6
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118
Electricity............................. 80
Gas..................................... 80
Oil..................................... 0
Water rates............................. 40.42
Telephone (land line)................... 0
Mobile phone............................ 39.91
TV Licence.............................. 38
Satellite/Cable TV...................... 43.49
Internet Services....................... 47.99
Groceries etc. ......................... 280
Clothing................................ 20
Petrol/diesel........................... 160
Road tax................................ 15
Car Insurance........................... 14
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 7
Contents insurance...................... 0
Life assurance ......................... 90.9
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
budget for working away................. 400
Accomodation for working away........... 480
Children's football..................... 40
Total monthly expenses.................. 2999.01


Assets
Cash.................................... 0
House value (Gross)..................... 107000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 122000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98200....(564.7)....5.2
Hire Purchase (HP) debt ...... 12000....(299.6)....3
Total secured & HP debts...... 110200....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2747......63.03.....NaN
Overdraft......................6000......0.........NaN
Total unsecured debts..........8747......63.03.....-


Monthly Budget Summary
Total monthly income.................... 5,660
Expenses (including HP & secured debts). 2,999.01
Available for debt repayments........... 2,660.99
Monthly UNsecured debt repayments....... 63.03
Amount left after debt repayments....... 2,597.96

Personal Balance Sheet Summary
Total assets (things you own)........... 122,000
Total HP & Secured debt................. -110,200
Total Unsecured debt.................... -8,747
Net Assets.............................. 3,053


My plan is to pay off my credit-card and over-draft then to build some savings which I cannot touch !! ( please advise on what options I have available that I can literally transfer money into and not get it out so easily per month to avoid the needless spending of it ).

Please bare in mind the low/high wage timelines and how I can achieve this ideally before April. I will have 3 high pays until this point. Then 4 low pays and then x high pays thereafter for at least the end of the year.

Again, thank you for reading and considering to provide me with advice. I'd like to get my life in check before this relatively small debt becomes overwhelming.

I'd also like to add that as of recently, my partner receives £120 per week for Gas, Electric, fuel and food whereas before it was just sending money as and when, as well as me introducing a budget to me working away from home. This has helped this month drastically after christmas or I'd be up !!!!-creek without a paddle.

enjoyyourshoes

Hi

as a starter for 10:-

1.0 Work out ALL none monthly bills and start accruing monthly to pay for these when they become due

2.0 Put this money into a separate account preferably with as high an interest as you can

3.0 Put any 'surplus' money from boom months into this account

4.0 Produce a simple breakdown by 'purpose' for this account and reconcile when you have dipped into this (i.e one wedding might be Car insurance (cheaper when paying annually anyway), it will have 12 monthly contributions going in until the month the insurance is due and the balance will go to zero, you may have another called 'boom months', money will go in on the good months and nothing going in on the scars months, you steel your self not to remove any of this money unless you both agree what its for and that you NEED it 9not WANT it) and it meets one of your life objectives

5.0 Reconcile your main bank account daily with any spend from that account, on pay day deduct all SO/DD plus monthly accrual above (point number 1.0) from the starting balance and then reconcile daily, don't allow your self to overspend or dip into OD

6.0 Review monthly spends and plan to eliminate, reduce, recycle (i.e. put into account (point 3.0) for your Life objectives. Analyse spending habits and ascertain of you could have done without alb,c etc

SOA
Can you investigate getting better mortgage/mobile phone/internet contracts ?

good luck

Pixie5740

danny1990 wrote: »

I've done an SOA it's not entirely accurate as far as APR's go as I'm not certain on how to check. Credit Expert doesn't appear to give me them. Another factor is I've gone from a 999 credit score when buying the house to a current 740 which I'm also not pleased about.

First things first do not worry about your Experian credit score. A) No lender can see never mind use your Experian credit score. Experian do not lend money so how they rate you is irrelevant.

I would be more concerned about paying Credit Expert a subscritption to view your Experian credit file because you can do it for free through the MSE Credit Club. Likewise you can view your Equifax files for free through Clearscore, and your Call Credit file through Noddle.

danny1990 wrote: »

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2100
Partners monthly income after tax....... 0 Why is your partner's income zero?
Benefits................................ 0
Other income............................ 60
Total monthly income.................... 2160

Monthly Expense Details
Mortgage................................ 564.7
Secured/HP loan repayments.............. 299.6
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118
Electricity............................. 80
Gas..................................... 80
Oil..................................... 0
Water rates............................. 40.42
Telephone (land line)................... 0
Mobile phone............................ 39.91 How many phones?
TV Licence.............................. 38 TV Licence is £12.12
Satellite/Cable TV...................... 43.49 Do you really need this?
Internet Services....................... 47.99 This is high even if you have fibre
Groceries etc. ......................... 280 That's good for a family of 4
Clothing................................ 20
Petrol/diesel........................... 160 If you only spend this much on fuel are two cars necessary?
Road tax................................ 15
Car Insurance........................... 14
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 7 This is incredibly low, well done if it is accurate
Contents insurance...................... 0 Is this included with your buildings insurance
Life assurance ......................... 90.9
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100 This is high
Haircuts................................ 20
Entertainment........................... 0 Never go out or get a takeaway?
Holiday................................. 0 Not even a day trip somewhere?
Emergency fund.......................... 0 As a home owner you need something here
Children's football..................... 40
Total monthly expenses.................. 2119.01


Assets
Cash.................................... 0 Where is the money you are setting aside for car related expenses?
House value (Gross)..................... 107000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 122000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98200....(564.7)....5.2
Hire Purchase (HP) debt ...... 12000....(299.6)....3
Total secured & HP debts...... 110200....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2747......63.03.....NaN
Overdraft......................6000......0.........NaN
Total unsecured debts..........8747......63.03.....-


Monthly Budget Summary
Total monthly income.................... 2,160
Expenses (including HP & secured debts). 2,119.01
Available for debt repayments........... 40.99
Monthly UNsecured debt repayments....... 63.03
Amount short for making debt repayments. -22.04 There is scope within your SOA to balance this

Personal Balance Sheet Summary
Total assets (things you own)........... 122,000
Total HP & Secured debt................. -110,200
Total Unsecured debt.................... -8,747
Net Assets.............................. 3,053

The interest rates of your credit cards can be found on the statements.

danny1990 wrote: »

Now for the higher wage
Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 5600
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 60
Total monthly income.................... 5660

Monthly Expense Details
Mortgage................................ 564.7
Secured/HP loan repayments.............. 299.6
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118
Electricity............................. 80
Gas..................................... 80
Oil..................................... 0
Water rates............................. 40.42
Telephone (land line)................... 0
Mobile phone............................ 39.91
TV Licence.............................. 38
Satellite/Cable TV...................... 43.49
Internet Services....................... 47.99
Groceries etc. ......................... 280
Clothing................................ 20
Petrol/diesel........................... 160
Road tax................................ 15
Car Insurance........................... 14
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 7
Contents insurance...................... 0
Life assurance ......................... 90.9
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
budget for working away................. 400
Accomodation for working away........... 480
Children's football..................... 40
Total monthly expenses.................. 2999.01


Assets
Cash.................................... 0
House value (Gross)..................... 107000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 122000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98200....(564.7)....5.2
Hire Purchase (HP) debt ...... 12000....(299.6)....3
Total secured & HP debts...... 110200....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2747......63.03.....NaN
Overdraft......................6000......0.........NaN
Total unsecured debts..........8747......63.03.....-


Monthly Budget Summary
Total monthly income.................... 5,660
Expenses (including HP & secured debts). 2,999.01
Available for debt repayments........... 2,660.99
Monthly UNsecured debt repayments....... 63.03
Amount left after debt repayments....... 2,597.96

Personal Balance Sheet Summary
Total assets (things you own)........... 122,000
Total HP & Secured debt................. -110,200
Total Unsecured debt.................... -8,747
Net Assets.............................. 3,053

Same comments as above except now you have some spare money to throw at your debts.

danny1990 wrote: »

My plan is to pay off my credit-card and over-draft then to build some savings which I cannot touch !! ( please advise on what options I have available that I can literally transfer money into and not get it out so easily per month to avoid the needless spending of it ).

Please bare in mind the low/high wage timelines and how I can achieve this ideally before April. I will have 3 high pays until this point. Then 4 low pays and then x high pays thereafter for at least the end of the year.

Again, thank you for reading and considering to provide me with advice. I'd like to get my life in check before this relatively small debt becomes overwhelming.

I'd also like to add that as of recently, my partner receives £120 per week for Gas, Electric, fuel and food whereas before it was just sending money as and when, as well as me introducing a budget to me working away from home. This has helped this month drastically after christmas or I'd be up !!!!-creek without a paddle.

There are lots of savings products out there with penalties for withdrawing money early. However, before even thinking about those you need to build up an emergency fund and learn how to put money aside for things such as car maintenance without spending it. These will be savings funds that you need to be able to access instantly if an emergency crops up.

EssexHebridean

OK - I'll tell you what I'm going to do. I'm going to totally ignore the SOA with the higher income. Let's see how that works, shall we?

danny1990 wrote: »

Hi thanks for taking the time to read my thread.

As of a year and a half ago I managed to secure myself a property after struggling to save for the deposit for years. Congratulations and well done - that's such a great feeling isn't it!Since then, I've never really concerned myself with the importance of keeping on top of my funds as well as saving. Me and my partner both are not great with finances. Start learning...

I think a reason for this is that my wage is very inconsistent. It can be very high or very low. However, I cannot choose what to earn, it is contract specific. So maybe after the first few eek wages where we can't afford anything I'll then pick up a good one and we end up spending the life out of it. Take your lowest earnings as a basic and anything above that is a bonus. Save the bonus or use it to annihilate debt.

I'm ideally looking for some advice on how I can repay the current debt I am in, as well what to do there-after so I can actually put my money into something rather than spending it. It's not that we go buy new things, I bet at least partly, it is, you know... we just assume because there's a big balance there the money goes until there isn't then we're back to square one. Do you know what they say about to assume? The clue is in the first three letters...

At present, until April I will receiving what I consider a relatively high wage. From April until August I will receive a low wage and from August to the rest of the year I will receive a high wage. This will be somewhere in the region of £5,400-£6,400 after-tax depending on how many days are in the month. That's fabulous then - lots of "bonus" money coming up to throw at the debt.

I've done an SOA it's not entirely accurate as far as APR's go as I'm not certain on how to check. Credit Expert doesn't appear to give me them. Another factor is I've gone from a 999 credit score when buying the house to a current 740 which I'm also not pleased about. Doesn't make the blindest bit of odds - it's just a number. Ignore it and concentrate on dealing with the debt.

I've done two SOA to determine my incomes in the low and highs. However, in the High I have to account for working away which is why some of the bills are higher as I have to still pay for the family at home as well as my own expenses. Please read both to understand where I am at.

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2100
Partners monthly income after tax....... 0 Can this be increased at all, for a start,
as that would help with your low months. Avon round? Betterware or similar? Even survey sites etc would mean she was earning something.
Benefits................................ 0
Other income............................ 60
Total monthly income.................... 2160

Monthly Expense Details
Mortgage................................ 564.7
Secured/HP loan repayments.............. 299.6 Is this a car loan or similar?
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 118 If you've not already done so get this split over 12 months from the start of the new tax year. If you're currently paying over 10 months make sure February & March's money goes to the debt.
Electricity............................. 80 Is this so high because you pay electric on a property when you're living away?
Gas..................................... 80 As above really - either way check you're on the best tariff and change if needed as these are seriously high if it's just one property and can probably be improved even if 2.
Oil..................................... 0
Water rates............................. 40.42 Metered? 1 property or 2?
Telephone (land line)................... 0
Mobile phone............................ 39.91 Assume you claim this back against tax?
TV Licence.............................. 38 Why so much?
Satellite/Cable TV...................... 43.49
Internet Services....................... 47.99 Why so much? This is very high...
Groceries etc. ......................... 280 I reckon this can be reduced. Is everything cooked from scratch with fresh ingredients? Is whoever does the shopping doing it as economically as possible - looking for offers on things you use etc?
Clothing................................ 20
Petrol/diesel........................... 160 Read Martin's guide to driving economically and always make sure you check where you can fill up at the best price
Road tax................................ 15 If you're paying this monthly then you need to set aside money from the next "high" month to cover the annual payment.
Car Insurance........................... 14 On the flip side this is very low indeed for two cars - are you sure about this?
Car maintenance (including MOT)......... 20 This seems low for two cars.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 7
Contents insurance...................... 0 Three words. Get This Sorted. Oh,
and a fourth one - NOW!
Life assurance ......................... 90.9 Sure this is the best deal you can get?
It seems high.
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100 £1200 a year on presents? No,
waaaaay too much - it would be extreme if you weren't in debt, but as you are...
Haircuts................................ 20 Every month?
Entertainment........................... 0 Nothing at all?
Holiday................................. 0 No holidays ever and nothing planned?
Emergency fund.......................... 0 Again - as a homeowner you need this.
From the next "high" month stick £1000 aside in a savings account, label it "touch only in emergencies" and then leave it alone until something breaks.
Children's football..................... 40
Total monthly expenses.................. 2119.01


Assets
Cash.................................... 0 So where is the money you put aside for presents & car servicing etc then?
House value (Gross)..................... 107000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 122000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98200....(564.7)....5.2
Hire Purchase (HP) debt ...... 12000....(299.6)....3
Total secured & HP debts...... 110200....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2747......63.03.....NaN Find the rate on this
Overdraft......................6000......0.........NaN This scares me. If the bank call that in, you're going to have a pretty shaky time of it. Prioritise getting this fixed
Total unsecured debts..........8747......63.03.....-


Monthly Budget Summary
Total monthly income.................... 2,160
Expenses (including HP & secured debts). 2,119.01
Available for debt repayments........... 40.99
Monthly UNsecured debt repayments....... 63.03
Amount short for making debt repayments. -22.04 That's easily sorted by some tweaking of your expenditure.

Personal Balance Sheet Summary
Total assets (things you own)........... 122,000
Total HP & Secured debt................. -110,200
Total Unsecured debt.................... -8,747
Net Assets.............................. 3,053

My plan is to pay off my credit-card and over-draft then to build some savings which I cannot touch !! ( please advise on what options I have available that I can literally transfer money into and not get it out so easily per month to avoid the needless spending of it ).

Please bare in mind the low/high wage timelines and how I can achieve this ideally before April. I will have 3 high pays until this point. Then 4 low pays and then x high pays thereafter for at least the end of the year.

Again, thank you for reading and considering to provide me with advice. I'd like to get my life in check before this relatively small debt becomes overwhelming.

I'd also like to add that as of recently, my partner receives £120 per week for Gas, Electric, fuel and food whereas before it was just sending money as and when, as well as me introducing a budget to me working away from home. This has helped this month drastically after christmas or I'd be up !!!!-creek without a paddle.

OK - my advice for what it's worth.

Read and inwardly digest the above. On low pay months you stick rigidly to the budget for all things household as above. On high pay months you stick rigidly to the budget for all things household as above, BUT you also
a) month 1 - set aside £500 for your EF and a sum to cover the car tax. Let the rest ease the
overdraft.
b) month 2: the remaining £500 to the EF. An amount towards the car insurance. Remainder to the overdraft.
c) month 3: remainder for the car insurance. Balance to the overdraft.
Once the OD is clear everything gets thrown at the card to clear that - in the mean time keep paying the minimum on that.

You'll be out of your overdraft/CC debt easily inside a year like that - it's by far the most painless way to do it.

Once you are debt free then set aside a good chunk of every "high" month into savings - towards new cars when needed, a future house move, retirement, kids college fund - whatever you like - but you're fortunate to have the earnings to not need to fall into the credit trap again.

Good luck!

danny1990

EssexHebridean wrote: »

OK - I'll tell you what I'm going to do. I'm going to totally ignore the SOA with the higher income. Let's see how that works, shall we?



OK - my advice for what it's worth.

Read and inwardly digest the above. On low pay months you stick rigidly to the budget for all things household as above. On high pay months you stick rigidly to the budget for all things household as above, BUT you also
a) month 1 - set aside £500 for your EF and a sum to cover the car tax. Let the rest ease the
overdraft.
b) month 2: the remaining £500 to the EF. An amount towards the car insurance. Remainder to the overdraft.
c) month 3: remainder for the car insurance. Balance to the overdraft.
Once the OD is clear everything gets thrown at the card to clear that - in the mean time keep paying the minimum on that.

You'll be out of your overdraft/CC debt easily inside a year like that - it's by far the most painless way to do it.

Once you are debt free then set aside a good chunk of every "high" month into savings - towards new cars when needed, a future house move, retirement, kids college fund - whatever you like - but you're fortunate to have the earnings to not need to fall into the credit trap again.

Good luck!

I appreciate everyone's response, it does appear I may have miscalculated some of my outgoings ( I wrote this just after waking up from night shift, before I went to bed I conditioned myself to approach this thread first ). As a result, my brain hasn't properly processed numbers.

I'll try to address some of your points. However, I do know a lot of them are intended as questions I should be asking myself.

"Partners monthly income after tax....... 0 Can this be increased at all, for a start,
as that would help with your low months. Avon round? Betterware or similar? Even survey sites etc would mean she was earning something. " - she is currently seeking employment. My youngest is only in part-time nursery and we get no current help with childcare. However, she's recently ( as of today ) had a trial assistant teaching a special needs girl which if she is selected allows for 20 hours per week that works around the multiple drop-offs to school. So, fingers crossed! as this would eliminate the £480 I send her per 4 weeks.

"Secured/HP loan repayments.............. 299.6 Is this a car loan or similar?" - This is for a car finance, I own one outright and got a bit carried away on the next. I'm not sure what options are available to me at the moment as I'm only 2 years into the HP. I'd prefer to see out the terms of this vehicle if it's possible for me.

"Electricity............................. 80 Is this so high because you pay electric on a property when you're living away?
Gas..................................... 80 As above really - either way check you're on the best tariff and change if needed as these are seriously high if it's just one property and can probably be improved even if 2. " - The house I purchased was on the meter with EDF ( No wonder i get such a high rate when I'm subcontracted to them ). When I say on the meter, I mean to 'top up' at the local shop! I agree, I need to see what options are available. However, this is lower in the warmer months. However, this remains the same whether I'm away or home.

"Water rates............................. 40.42 Metered? 1 property or 2?" - one property, not metered.

"Mobile phone............................ 39.91 Assume you claim this back against tax?" - could you please elaborate? I'm not self employed. My tariff states £25 per month, I may need to check if anything is going on. As this doesn't have a device plan.

"TV Licence.............................. 38 Why so much?" - I just inputted the number from my latest bank statement. However, it appears to be quarterly so this is inaccurate.

"Internet Services....................... 47.99 Why so much? This is very high..." - I run an online business that requires quite a fair share of file transfer. It's not absolutely required to have the fastest. However, it does improve waiting times. - this is where the additional 60 comes from. though that does range between £40-200.

"Groceries etc. ......................... 280 I reckon this can be reduced. Is everything cooked from scratch with fresh ingredients? Is whoever does the shopping doing it as economically as possible - looking for offers on things you use etc?" I have no involvement with groceries unless it's on a Sunday and I'm home. I do tend to find better deals although my partner assumes she has £70 she should spend £70.

"Road tax................................ 15 If you're paying this monthly then you need to set aside money from the next "high" month to cover the annual payment." - This is inaccurate, both cars are £180 each for the year so would average £30 per month.

"Car Insurance........................... 14 On the flip side this is very low indeed for two cars - are you sure about this?" - This is completely and utterly inaccurate. Although, I do wish it was. I pay annually for my car £500 and £128 per month for her car.. We are still ( somewhat ) young and they still statistically rob us.

"Car maintenance (including MOT)......... 20 This seems low for two cars." - This is also inaccurate. £220 per year for my car's service, £30 for the MOT, her service is done by me for less than £50 and the mot is the same £30.

"Buildings insurance..................... 7
Contents insurance...................... 0 Three words. Get This Sorted. Oh,
and a fourth one - NOW!" I believe my buildings insurance included contents. I need to check and clarify.

"Life assurance ......................... 90.9 Sure this is the best deal you can get?
It seems high." I agree, I think I was slightly miss sold. However, when buying the property I was rushed into taking it from my mortgage adviser ( commission ). With my employment requiring me to work at height occasionally as well as using an E-Cigarette this caused my life insurance to sky-rocket. Though it does cover critical illness as well as a non-decreasing payout a long side my mortgage.

"Presents (birthday, christmas etc)...... 100 £1200 a year on presents? No,
waaaaay too much - it would be extreme if you weren't in debt, but as you are..." - I agree, and it's likely why I'm currently sat without a penny as Christmas has just been. We tend to spend around £350 on the kids then other relatives.. As well as birthdays. In fact, my son just had his birthday last weekend and that cost me £300 for the party. So, perhaps where you see it's high it is in fact a lot higher.

"Entertainment........................... 0 Nothing at all?" - I haven't accounted for it as it's opportunistic depending on whether we have anything spare or not.

"Emergency fund.......................... 0 Again - as a homeowner you need this.
From the next "high" month stick £1000 aside in a savings account, label it "touch only in emergencies" and then leave it alone until something breaks." - I agree and I've been lucky so far. I shouldn't rely on "if" when it's likely "when".

"Cash.................................... 0 So where is the money you put aside for presents & car servicing etc then?" - Cars are due in July'ish, Christmas just emptied my pockets.

"Overdraft......................6000......0........ .NaN This scares me. If the bank call that in, you're going to have a pretty shaky time of it. Prioritise getting this fixed" - I didn't realize they did 'call it in' this now also scares me.

I apologize for inaccurately representing my outgoings. As, this is the only information you have to go on to assist me. However, thank you all for your advice it's opened my eyes. I will post progress as I move on from this current situation ( even if you don't care to read it :rotfl: ).

EssexHebridean

Good work so far - well done! I'll comment in red again to make life easier...

danny1990 wrote: »

I appreciate everyone's response, it does appear I may have miscalculated some of my outgoings ( I wrote this just after waking up from night shift, before I went to bed I conditioned myself to approach this thread first ). As a result, my brain hasn't properly processed numbers.

I'll try to address some of your points. However, I do know a lot of them are intended as questions I should be asking myself.

"Partners monthly income after tax....... 0 Can this be increased at all, for a start,
as that would help with your low months. Avon round? Betterware or similar? Even survey sites etc would mean she was earning something. " - she is currently seeking employment. My youngest is only in part-time nursery and we get no current help with childcare. However, she's recently ( as of today ) had a trial assistant teaching a special needs girl which if she is selected allows for 20 hours per week that works around the multiple drop-offs to school. So, fingers crossed! as this would eliminate the £480 I send her per 4 weeks. Fingers crossed for her getting that then!

"Secured/HP loan repayments.............. 299.6 Is this a car loan or similar?" - This is for a car finance, I own one outright and got a bit carried away on the next. I'm not sure what options are available to me at the moment as I'm only 2 years into the HP. I'd prefer to see out the terms of this vehicle if it's possible for me. How much longer to go? I get that you'd like to see it through - but eradicate any thoughts of taking out a new finance deal when that one finishes, yes? That car is with you for the foreseeable, now...

"Electricity............................. 80 Is this so high because you pay electric on a property when you're living away?
Gas..................................... 80 As above really - either way check you're on the best tariff and change if needed as these are seriously high if it's just one property and can probably be improved even if 2. " - The house I purchased was on the meter with EDF ( No wonder i get such a high rate when I'm subcontracted to them ). When I say on the meter, I mean to 'top up' at the local shop! I agree, I need to see what options are available. However, this is lower in the warmer months. However, this remains the same whether I'm away or home. Give some urgent attention to Martin's guides towards switching - and see if you can get off prepayment as this is always more costly.

"Water rates............................. 40.42 Metered? 1 property or 2?" - one property, not metered. *might* be worth checking around to see how metered might compare for you.

"Mobile phone............................ 39.91 Assume you claim this back against tax?" - could you please elaborate? I'm not self employed. OK I took it that your variable income meant you were SE or Contracting. My tariff states £25 per month, I may need to check if anything is going on. As this doesn't have a device plan. Definitely check - they are currently apparently charging you an extra £15 a month and you don't seem to know why! Are you in contract? If not look to switch to SIM only

"TV Licence.............................. 38 Why so much?" - I just inputted the number from my latest bank statement. However, it appears to be quarterly so this is inaccurate. Stop paying quarterly as they charge a premium for this - switch to monthly. You'll pay £25 odd for the first few months then it will drop to the standard monthly £12.odd

"Internet Services....................... 47.99 Why so much? This is very high..." - I run an online business But you're not SE? So why are you paying for this? Should you employer not be covering this cost? that requires quite a fair share of file transfer. It's not absolutely required to have the fastest. However, it does improve waiting times. - this is where the additional 60 comes from. though that does range between £40-200.

"Groceries etc. ......................... 280 I reckon this can be reduced. Is everything cooked from scratch with fresh ingredients? Is whoever does the shopping doing it as economically as possible - looking for offers on things you use etc?" I have no involvement with groceries unless it's on a Sunday and I'm home. I do tend to find better deals although my partner assumes she has £70 she should spend £70. Well clearly she needs to stop,
then! Get involved - shop together,meal plan together, write the list together and then stick to it...together!

"Road tax................................ 15 If you're paying this monthly then you need to set aside money from the next "high" month to cover the annual payment." - This is inaccurate, both cars are £180 each for the year so would average £30 per month. Regardless,
stop paying it in monthly installments - get this sorted to set money aside.

"Car Insurance........................... 14 On the flip side this is very low indeed for two cars - are you sure about this?" - This is completely and utterly inaccurate. Although, I do wish it was. I pay annually for my car £500 and £128 per month for her car.. We are still ( somewhat ) young and they still statistically rob us. I mean this kindly - if you guessed your entire SOA then it's worthless to you and those of us have commented have wasted our time volunteering to try to help you with it, thus far. I suggest that you set aside time over the weekend to revisit the whole thing using bank statements/card statements to get accurate figures. Honestly - a "cloud cuckoo land" SOA is a total waste of time and effort as it's meaningless.

"Car maintenance (including MOT)......... 20 This seems low for two cars." - This is also inaccurate. £220 per year for my car's service, £30 for the MOT, her service is done by me for less than £50 and the mot is the same £30. Plus tyres, wiper blades, screenwash....

"Buildings insurance..................... 7
Contents insurance...................... 0 Three words. Get This Sorted. Oh,
and a fourth one - NOW!" I believe my buildings insurance included contents. I need to check and clarify. At £7 a month I doubt it very much. This is something you need to know though - and know for sure.

"Life assurance ......................... 90.9 Sure this is the best deal you can get?
It seems high." I agree, I think I was slightly miss sold. However, when buying the property I was rushed into taking it from my mortgage adviser ( commission ). With my employment requiring me to work at height occasionally as well as using an E-Cigarette this caused my life insurance to sky-rocket. Though it does cover critical illness as well as a non-decreasing payout a long side my mortgage.

"Presents (birthday, christmas etc)...... 100 £1200 a year on presents? No,
waaaaay too much - it would be extreme if you weren't in debt, but as you are..." - I agree, and it's likely why I'm currently sat without a penny as Christmas has just been. We tend to spend around £350 on the kids then other relatives.. As well as birthdays. In fact, my son just had his birthday last weekend and that cost me £300 for the party. So, perhaps where you see it's high it is in fact a lot higher. Sounds like you might be able to add at least 50%
onto your estimate there. Reign this in - seriously, your kids know you love them, they don't need the latest shiny gadget to prove it.

"Entertainment........................... 0 Nothing at all?" - I haven't accounted for it as it's opportunistic depending on whether we have anything spare or not. Start accounting for it - set aside money in a pot in the "high" months and then use it a bit at a time to cover the low months - you need to end the feast/famine mindset.

"Emergency fund.......................... 0 Again - as a homeowner you need this.
From the next "high" month stick £1000 aside in a savings account, label it "touch only in emergencies" and then leave it alone until something breaks." - I agree and I've been lucky so far. I shouldn't rely on "if" when it's likely "when". Oh it's definitely "when"
- in the long term you'll have an EF that will cover something like the boiler needing replacement - for now let's work on you being able to comfortably cover a major appliance going kaput in two consecutive months...

"Cash.................................... 0 So where is the money you put aside for presents & car servicing etc then?" - Cars are due in July'ish, Christmas just emptied my pockets. Noted on Christmas, but if the cars are due in July and you put aside £20 a month that should show £120 in there...? (Yes, we both know the answer here I think...)

"Overdraft......................6000......0........ .NaN This scares me. If the bank call that in, you're going to have a pretty shaky time of it. Prioritise getting this fixed" - I didn't realize they did 'call it in' this now also scares me. Oh yes, they can do. And honestly, I think being a bit scared is good. You & your OH need to understand that this really has to be sorted -
I think your "lightbulb" is on, I'm not so sure about hers though...

I apologize for inaccurately representing my outgoings. As, this is the only information you have to go on to assist me. However, thank you all for your advice it's opened my eyes. I will post progress as I move on from this current situation ( even if you don't care to read it :rotfl: ).

We see a lot of guessed / aspirational SOA's - and always say the same thing, however you're not the first, won't be the last, and have at least realised what the problems with it are I think! Sit down and redo the whole thing from the start - and do it with your other half as you both need to understand the situation in full. Set a realistic budget for things like groceries and work out what you REALLY spend - then adjust mindsets to that budgeted amount being a ceiling - the target is to spend as little of it as you can, NOT as much of it!

Currently you're living as though you earn £5k a month, every month. That means in real terms that you're setting yourselves up for a 3k deficit some months - that's unsustainable, and you can see where it will end up if you don't tackle it right now. start living as though you earn the lower figure each month, and life will improve immeasurably.

Pixie5740

Are you a self employed contractor? Are you contributing anything toward a pension or since you're still somewhat young are you eligible for a LISA?

EssexHebridean

Pixie5740 wrote: »

Are you a self employed contractor? Are you contributing anything toward a pension or since you're still somewhat young are you eligible for a LISA?

OP says he's not SE.

danny1990

Thanks again for your responses

I do not receive another wage until the 9th of this month. So I'm trying to tackle any minor payments that appear to be taken from my account. As it's apparent they add up!

1) My excessive phone bill was due to a spotify subscription. I have now revoked this, my bill is now at £29.99 - I believe I can find a better deal and/or haggle them into a lower price.

2) I had an adobe photoshop subscription, I've attempted to cancel this though it may face some implications so I'm trying to treat carefully. This would save an additional £9.99 per month.

3) there were a few more £2-£4 subscriptions to things I've now cancelled. I didn't realise how annoying it can be to find the buttons to end these.

4) Current Step - Ascertaining my Sky information so I can log online to view my bill to see if there's anything untoward. If there isn't I'm going to contact them and haggle for a better deal - if not, I will be removing this privilege. With the internet we have and the TV it's more than possible to use catch-up related apps to see what Sky provides anyhow.

5) Organising my bank accounts to hold certain funds. I will go down the avenue that Essex suggested and put some towards an EF as well as putting some towards the car tax & Insurance then let the rest increase the overdraft Question Would it make sense to reduce my overdraft at this point when the float is there to cover it?

6) Contacting my current gas & electric provider and seeing if I can be taken off the meter. I'm not sure where I stand with this as essentially I shouldn't "have" to be on it if it was a previous person who was forced into it. The only reason I like the idea of the meter is that it doesn't allow my partner to believe energy is limitless whilst I'm away.

To answer some questions.

"Are you a self employed contractor? Are you contributing anything toward a pension or since you're still somewhat young are you eligible for a LISA?"

I have a full-time staff employment with the company I work for. However, I'm sent to different contracts as a contractor would, expect I'm given the added benefit of a wage when the work is quiet. Although, this wage is the 'low' wage. I also pay into a pension fund.

"Secured/HP loan repayments.............. 299.6 Is this a car loan or similar?" - This is for a car finance, I own one outright and got a bit carried away on the next. I'm not sure what options are available to me at the moment as I'm only 2 years into the HP. I'd prefer to see out the terms of this vehicle if it's possible for me. How much longer to go? I get that you'd like to see it through - but eradicate any thoughts of taking out a new finance deal when that one finishes, yes? That car is with you for the foreseeable, now...

There will be 3.5 years left on this HP. I do not intend on doing this again. In fact I intend on purchasing a van. A couple of people I work away with have done this and run them into the ground and it seems an all round better option.

But you're not SE? So why are you paying for this? Should you employer not be covering this cost?

I have a LTD Company for the online business. However, over the last year I've struggled to put much time into it. I've spent about 5 years in total to get it to where it is. Although it's not much, it does fill in the gaps whilst I'm working away. Which is a much cheaper alternative when the majority of the blokes spend their gaps in the pub. I'm not sure whether I could balance anything against a tax return as the company really doesn't make enough to consider anything. It will likely average about £1,000 per year at the moment. I likely do need to consider lowering the fibre cost or at least attempting to haggle for a better deal.

if you guessed your entire SOA then it's worthless to you and those of us have commented have wasted our time volunteering to try to help you with it, thus far. I suggest that you set aside time over the weekend to revisit the whole thing using bank statements/card statements to get accurate figures. Honestly - a "cloud cuckoo land" SOA is a total waste of time and effort as it's meaningless.

I agree, I should've put more time into it. I'm going to spend the majority of my free time tonight after the shift to come up with a concrete SOA. Thank you for being patient with my lack of effort into it.

"Road tax................................ 15 If you're paying this monthly then you need to set aside money from the next "high" month to cover the annual payment." - This is inaccurate, both cars are £180 each for the year so would average £30 per month. Regardless,
stop paying it in monthly installments - get this sorted to set money aside.

Sorry, I do pay for it annually, I just included it as an average of the cost per year.



I will post an updated version of my SOA in the early hours of the morning. Hopefully this will put a more accurate representation of my current affairs.

Thanks again for reading and taking the time to advise me.

System

Hi,
Everyone else has made lots of useful comments. The only thing I wanted to chip in will actually cost you money - but it might help you budget so hence the reason I'm suggesting. There's an internet and app based tool called YNAB - You need a budget.com - it has a really easy to use budgeting interface. There's a whole methodology to it, with loads of free training to get you up to speed. For me it really helped me deal with my DH's unstable income as you can clearly see what you need to pay out for and when, and then what's left to meet more flecible spends like groceries. It helps you save up too.
Good luck - now you are here, keep coming back and stay focused and you will get this sorted in no time.

Perhaps you might want to start a diary to keep you motivated (or at least read some) - It really helps me stay focussed.

Good luck!

theoretica

Trying to budget with a wage that varies that much can't be easy, so I personally would smooth it out. Get your wage paid into one account and then transfer your spending for the month (based on your lower earning months!) to another account and your annual spends such as insurance to a third. In high earning months you will have cash left for savings or debt repayment, but it won't be muddled up with your spending money.