Budget advice

ganderson1804

fatrab wrote: »

I'd definitely reconsider your presents and entertainment spending. Cut by £100/month and transfer this money into an emergency fund.

I'd look into the life insurances, you might find a better deal.

Can you cut the cost of your satellite TV package and mobile phone perhaps?

Great suggestion on the ent/gifts - think i'll do that.


I have our financial advisor looking at life insurance for us. my husband is a smoker (vape) and also has medical issues in family history so think that ramps it up.


Locked in sky (includes tv, broadband and phone line) until October but will def reduce at that point. My phone is £29.0 a month and my husband is on £8 SIM only. When mine ends i'll drop to the same.

enjoyyourshoes

Your HP ought to attract a bit of focus on your behalf:-

What is the interest rate?
can you overpay?
Are there any early repayment charges?

If all OK above, and the interest rate is over the mortgage, then pay off asap.

Also look into the mortgage rate and see if there can be a better remortgage deal without any silly additional charges attributed to changing and gaining a new remortgage.

I assume the insurances (ar etc) are paid annually and just represented as a monthly cost for the SOA purposes, if so great , if not start accruing for all annual,1/2&1/4 bills as a monthly amount deducted when you reconcile your bank account (do a quick cash flow to see all bills payable each due month are covered by the monthly accrual) and see if this can go into a interest bearing account.

What are you trying to achieve?

enjoyyourshoes

Sorry, just read your post on insurances etc, so ignore my comments.

ganderson1804

Thank you for your reply!

enjoyyourshoes wrote: »

Your HP ought to attract a bit of focus on your behalf:-

What is the interest rate?
can you overpay?
Are there any early repayment charges?

If all OK above, and the interest rate is over the mortgage, then pay off asap.
Honest answers is I don't know to any of your questions. It is a car finance we are paying. I'd need to look into it.

Also look into the mortgage rate and see if there can be a better remortgage deal without any silly additional charges attributed to changing and gaining a new remortgage.
We have just looked at remortgage but unfortunately our house valued less than expected so our best bet is a new deal with our current lender as the have the LTV as being 82% where everyone else sees 92%. This will increase our payments by around £50

I assume the insurances (ar etc) are paid annually and just represented as a monthly cost for the SOA purposes, if so great , if not start accruing for all annual,1/2&1/4 bills as a monthly amount deducted when you reconcile your bank account (do a quick cash flow to see all bills payable each due month are covered by the monthly accrual) and see if this can go into a interest bearing account.

What are you trying to achieve?
GREAT question! I just want to feel a little more secure but I don't think that is going to happen unless we can increase our income or reduce our outgoings which I just don't think we can do right now. Roll on my youngest 2 kids going to school!!

Mumoffourkids

Re your clothes budget, I have six kids and budget £100 per month for clothes and shoes for all of them and for me as well. I just managed to get shoes for my youngest two in the sale in the next size up so they cost me £45 for four pairs of shoes instead of £114. These shoes should last them until the end of the summer.

Also presents, again I have six kids so therefore six birthdays and six Christmas and I only budget £150 per month and this should be more than enough for the year. So I should have some left over at the end of the year.

EssexHebridean

Comments in red as usual...

ganderson1804 wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1679.33
Partners monthly income after tax....... 2205.23
Benefits................................ 192.4
Other income............................ 0
Total monthly income.................... 4076.96
Monthly Expense Details
Mortgage................................ 1253 Ouchy - that's a lot of dosh!
Secured/HP loan repayments.............. 507 Car payments?
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 206 Might be worth spreading this over 12 months if you currently pay over the standard 10.
Electricity............................. 131 Everything done on electric - no central heating?
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0 Ahh - you're in Scotland at a guess?
Telephone (land line)................... 0
Mobile phone............................ 37.2 2 phones?
TV Licence.............................. 12.37 Correct and well done on remembering the odd pennies! :T
Satellite/Cable TV...................... 59.5
Internet Services....................... 0 Included in the TV cost as a bundle?
Groceries etc. ......................... 300 Not bad for a family of 5 - you might be able to tweak is a little just by mindful shopping perhaps.
Clothing................................ 100 Every month? This is pretty high - might be worth looking to have a clothes amnesty for a few months, then buy essentials only for a few months more.
Petrol/diesel........................... 300 Read Martin's guide on driving economically and shop around for the best priced fuel.
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 75 Do you do this the same as we do -
save for everything in one pot and pay tax & insurance annually? If so does this cover everything you need for the car annually? Think depreciative items as well -= you're going to go through at least 1 set of tyres a year on your mileage at a guess.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 226.24
Other child related expenses............ 65
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 There should be something here!
Contents insurance...................... 0 There should be something here, too!
Life assurance ......................... 75.9
Other insurance......................... 0
Presents (birthday, christmas etc)...... 145 Honestly, you could definitely trim this a lot - even with 3 children that's a lot of money to spend on presents.
Haircuts................................ 34 Every month? This seems quite high
Entertainment........................... 250 If you wanted some wiggle room I suspect this could be trimmed a bit
Holiday................................. 100
Emergency fund.......................... 0 Some priorities are skewed here IMO -
£250 a month on entertainment, £100 on holidays, and nothing feeding into an EF?
Bank Acc charge......................... 12 [COLOR="red] What benefits do you get from this?
Do you use the benefits? Could you get them cheaper elsewhere?[/COLOR]
Kids Trust Funds........................ 100
Total monthly expenses.................. 3989.21

Assets
Cash.................................... 0 Where is the money you save for holidays,
car expenses and presents if you have no cash assets?
House value (Gross)..................... 250000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 250000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 231000...(1253).....2.76
Hire Purchase (HP) debt ...... 0........(507)......0 This shouldn't have a zero in the first column if you're paying £500 a month to it
Total secured & HP debts...... 231000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 4,076.96
Expenses (including HP & secured debts). 3,989.21
Available for debt repayments........... 87.75
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 87.75 So that's good - a surplus is a surplus
Personal Balance Sheet Summary
Total assets (things you own)........... 250,000
Total HP & Secured debt................. -231,000
Total Unsecured debt.................... -0
Net Assets.............................. 19,000

OK you're on the right side of things but allowing for the stuff that's not mentioned there (insurances etc) you're closer than I'd be comfortable with, and with no EF set aside you're very close to the wind should anything break in a big way.

If it were me I'd look to prioritise - sort out that contents insurance (and buildings although I suspect you do have that, just forgotten to put it in). Think about cutting back on the entertainment stuff a bit. Definitely cut back on the clothing for a while - force everyone to revisit what they already have and they might find some forgotten favourites lurking in the wardrobe! Knock presents down to a nice even £100 a month and make sure that budget gets stuck to. Shop to a list and write a meal plan - that could potentially save you £50 a month or so. Try to wiggle things about so you've got an extra couple of hundred pounds a month, and then stash that away into emergency savings for a while - work on just adding to this as you go along each month and don't have a fixed amount in ind to stop saving at.

Agree that the HP needs to be looked at - it may be that if there is an option there to overpay you might do better to point some of the surplus at that. If there a balloon payment on the car at any stage? Again if so this will need saving for otherwise you'll find yourself in the situation of needing to hand the car back and take further finance for a new one, whereas obviously the ideal is to pay the current car off and keep it until you've saved for its replacement.

EssexHebridean

Your username made me chuckle MOFK! :rotfl: Did you forget two of them when you registered? :D

(Apologies for taking the thread OT!)

Mumoffourkids wrote: »

Re your clothes budget, I have six kids and budget £100 per month for clothes and shoes for all of them and for me as well. I just managed to get shoes for my youngest two in the sale in the next size up so they cost me £45 for four pairs of shoes instead of £114. These shoes should last them until the end of the summer.

Also presents, again I have six kids so therefore six birthdays and six Christmas and I only budget £150 per month and this should be more than enough for the year. So I should have some left over at the end of the year.

enthusiasticsaver

I am not going to rehash all the advice above except to say that you need an emergency fund and I would suggest you knock the presents fund down by £45 and put £100 from this and your surplus into savings each month. What is the HP for? The car and how much is outstanding or is this one of these PCP deals where you have to keep rolling it over every 3 or 4 years?

Your biggest issue is the mortgage and the HP which is very high.

Mumoffourkids

EssexHebridean wrote: »

Your username made me chuckle MOFK! :rotfl: Did you forget two of them when you registered? :D

(Apologies for taking the thread OT!)

It's because I originally registered when I had four kids and then went onto have two more! :rotfl:

EssexHebridean

Mumoffourkids wrote: »

It's because I originally registered when I had four kids and then went onto have two more! :rotfl:

Thank goodness - I'd hate to have thought you had forgotten a couple! :rotfl::rotfl: