Time to face things...

Overly-optimistic

Hi all,
As the title says, I have decided after many years of reckless behaviour regarding money, it is time to face up to the situation.
As my user name suggests, I have always been way too optimistic about how we were going to pay for things. We'd book a holiday a few months before, and when it came to it, didn't have the cash, so the credit card came out. Saved money for Christmas, but when Christmas came, would spend three times that amount (credit card again). Food shopping - set a budget, spend double. You get the picture.
Part of the problem is my income . I have a part time job, then the rest of the time I'm self employed, so it can be ok, or very bad. My oh works full time, but we have relied on regular overtime which is generally there, but on the odd occasion it is not we are again in the do-do and reaching for the credit card.
So, I have decided to use this diary to help me concentrate my mind - paying off the debt then hopefully saving up. We are in our mid/late 40's and rent expensive property. Would love to own again, but not sure if it's too late!!

A breakdown of my figures as follows, as I'm not sure how to proceed with something more detailed now budget brain is no more!!

Income
£2100 pm oh
£800 me (this is based on a low month)
£147.80 child benefit - oldest is 17 and started an apprenticeship in November, so this figure includes the £65 she gives us towards her keep. Huband says we should increase it!

Outgoings
Rent £950
Council tax £183
Gas/elec £107
Water £60
Groceries £300 (this was double but I have cut out the wine and junk)
Phone/broadband/tv £48
Mobiles £18
Fuel £90
Road tax £33.20 - 2 cars
Insurance £36 - 2 cars
Tv license £12.37
Life insurance £36.66
Contents insurance £5.50
Parking etc £20
Clothing £40
Days out £25
Hair cuts £15
Birthdays/Christmas £70
£75 - pocket money youngest, and £25 each me and oh for personal spends
Pet insurance £16.64
Car repairs mot etc £20

=£2161.37

Debts
- loan approx £13,000 left, £368.56 pm
Credit card 1 - £2311.50, £53 pm
Credit card 2 -£8633.12, £86 pm
Credit card 3 - £2189.20 - £25 pm
Catalogues - £300, £25 pm
Debt total - £26,433.82
Monthly payments - £557.56

Total out goings £2718.93
Incomings £3047.80
Left over £328.87

As you can see, this is tight, so I need to try and reduce out goings some more.
I have been very foolish, and as I sort the money I need to say no more!!!

If you have managed to get this far, thanks for reading.

System

Welcome and waving hello. I'm in a very similar boat to you ref housing situation and age so completely get where you are coming from.

Ref your SOA, your car pot is too low for 2 cars I would say unless they are very new?
I think it would also be worth having an emergency fund. Your petrol is low which is Great? Do you need two cars?

What are your interest rates on credit cards? Have you tried a snowball calculator? I guess I would go after the catalogue first as you can lose that debtbvery quickly and I presume the interest is pretty rubbish.

I also recommend an emergency fund, even if just a bit but will help whilst you settle into your new budget.

Good luck, subscribing xxxx

fatrab

Hi and welcome along. Well done on posting, the first one is the hardest, gets easier from here on in!

Agreed as above, you have enough surplus to hit that catalogue first and that will give you a boost. One less thing to worry about too.

Groceries - can that be cut further? Savvy shoppers cookbook and change over to Lidl/Aldi?
Are you on best deal for Gas/Electric? We just switched to Bulb and price came down £20/month and I thought we were already on a good deal!!
Phone/Broadband/TV - room for negotiation here too. £48 isn't excessive, but you can cut that down. go back to freeview channels if it comes to it.
As mentioned above, do you really need 2 cars?

There are a few other areas that could be tweaked but the savings would be minimal. I'd say the £65 is possibly on the light side for keep, depending on what she earns I'd say 10% or £100/month would be fair.

It would be better if you posted the full SOA formatted for MSE, that way we can see interest rates etc and help spot any areas that could have further savings.

Best of luck on your journey

Overly-optimistic

Hi Ramblehan,
Thanks for your reply
With regards to the cars, no we don't need two, we have lived here about a year and a half, and now my part time job is in easy walking distance. I have told oh I want to sell my car, but he is very reluctant - his reason being that if his breaks down he needs mine to get to work??? Bizarre I know. I have bored him so much he has agreed to review the situation in the summer as he has a friend interested in it. In the meantime it sits rusting on the driveway, I don't think I've been out in it for six months! All the paperwork is in his name.
To be completely honest, he is very un bothered about the whole money thing, he has no aspirations for the future, and if he wants to do or buy anything he expects the money to just be available.
That said though, the amount we spend on repairs etc is low as he does the servicing and repairs, and buys any parts out of a bit of money he gets from a hobby he has.

I have just found the calculator, so will put the figures in that once my phone is charged.
Catalogue is buy now pay later 0%, credit cards all 0% balance transfers at the minute.

I hope you manage to get on the property ladder soon, I really dislike renting, we sold our last home under difficult circumstances, I think I've spent to try and make myself feel better since then, which is a vicious circle!

Overly-optimistic

Hi Fatrab,
Thanks for your input
I'm hoping to reduce the shopping a bit further, previously I would spend probably double that, but to my shame (after scrutinizing the receipts) I realised the excess was wine and sweets/junk. Yes really
I am currently on day 3 of no alcohol - the side effect being that I am now thinking clearer (and more painfully) about our situation.:(
I love Aldi, but unfortunately we now live a 50 min drive away so I have been shopping online at tesco, which does have the benefit of stopping me accidentally finding wine/sweets in my trolley.
My daughter earns about £600 a month so not that much really, although I am saddened to find out that she has spent about £1,500 on clothes, sweets and junk since she started there, so this month I have made her put some in a savings account where it can't be touched.

I shall plug my figures into the calculator shortly, but catalogue is 0% buy now pay later September I think, and credit cards currently 0%.


I

Overly-optimistic

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................ 800
Partners monthly income after tax....... 2100
Benefits................................ 82.8
Other income............................ 65
Total monthly income.................... 3047.8

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 950
Management charge (leasehold property).. 0
Council tax............................. 183
Electricity............................. 53
Gas..................................... 54
Oil..................................... 0
Water rates............................. 60
Telephone (land line)................... 48
Mobile phone............................ 18
TV Licence.............................. 12.37
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 40
Petrol/diesel........................... 90
Road tax................................ 33.24
Car Insurance........................... 32.84
Car maintenance (including MOT)......... 20
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 24
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 20
Buildings insurance..................... 0
Contents insurance...................... 5.37
Life assurance ......................... 36.66
Other insurance......................... 0
Presents (birthday, christmas etc)...... 70
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 50
Emergency fund.......................... 50
Total monthly expenses.................. 2230.48


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................12574.5...368.5.....4.1
Cc1............................2311.5....53........0
Cc2............................8633.12...86.33.....0
Catalogue......................299.01....25........0
Cc3............................2189.2....25........0

fatrab

When do the 0% periods end on the CC's?

Your SOA seems to have not copy and pasted fully?

If eldest daughter can afford £1500 clothes then maybe a little bit more keep would be reasonable. How about £20/week?

I would still pay off the catalogue first and foremost, then get rid. Use the extra money towards the next priority debt which I'd imagine would be the CC ending soonest.

Usually the advice would be to pay the debt with the highest interest first but I'm assuming you aren't going to have the CC's cleared by the end of their respective 0% terms?

System

Hey OO. I vary from the 'we're doomed' on the housing front to thinking, something magic will just amazingly happen. Although I have debt, as we've now sold I could pay it all back as we have a lump sum, but as my debt had defaulted and there's no interest, I decided to save/invest the money for a future deposit, and make month to month progress on paying off the debt.
We have as well moved to a much much more expensive area - houses are about £100K more expensive here than where we were.....arrrgghhh.

Only upside is we've both got better jobs - and my DD is now getting free childcare etc - so we've more cash rich than before, so I am trying to pay back debts, and save towards a future deposit - and as and when we have to talk to mortgage people I'll either reduce the debt if that looks better, or have a bigger deposit.

I wish we had better options for renters in this country - in France you can take long term lets and have housing security over the longer term for renting - we really need that here.

My other backup plan is if we can't afford to buy something for us to live in, then perhaps to buy something much smaller and let it out, so at least it's a saving pot.

and if that's all too depressing, the other option is to sack it all in and live somewhere cheap and humble abroad - but that's more dream than reality.....!

Well done for SOA and great that everythings on Zero%'s. If you can I would up your payments to your CC's so they are above the minimum - even if only by £5 or so - this will mean they don't see you as a minimum payer - and hopefully give you option of future 0% deals.
Then like Fatrab says, it's either going after one that ends soonest (probably best bet) or perhaps throwing more towards whichever CC seems to come up with regular balance transfer offers in the hope that might help when you need to switch something (I've no idea if that really works though!)

I get what you say about your OH - it seems a pretty common theme on here that one partner is all over it (and finding it stressful / worrying) and the other is head in the sand. My OH definitely fits into this category, but time has massively helped with this (and my repeated nagging) Also YNAB (an app/ budgeting tool) has helped us both see where the money goes (It's fantastic, but does cost money - but it's saved me way more money than it's cost me)

The other think to start thinking about is having a sort out / clear out and selling things - it's surprising what you can make when you make the effort. Perhaps your DD could have a sell / sort out and make back some money against what she's spent. I 'think' that students get YNAB free or at a reduced price, so might be worth a look for your DD to help her get her head around saving and spending.

You are off to a great start
Ramble x

fatrab

ramblehan wrote: »

I get what you say about your OH - it seems a pretty common theme on here that one partner is all over it (and finding it stressful / worrying) and the other is head in the sand.

Same here, Mrs fatrab still believes there's a magic money fairy that lives in the back garden...

System

fatrab wrote: »

there's a magic money fairy that lives in the back garden...

If only there was!!