Gutted - how did it happen?

Dobbibill

First things first, don't beat yourself up. It's not about being a disappointment. You've just moved and need to makes a few tweaks and adjustments to get back on track.

A few things that jump out at me, you may have already considered them.

Is the council tax paid over the standard 10 months or is it over 12? This is going to leave 2 months where this is 'free' money that could be added elsewhere if it's the former.

You don't pay a TV licence? It may well be so but don't want you to miss it accidentally.

You never buy any clothes at all? Not even a few pairs of socks?


Zero road tax? Lovely if it is but don't want it to be overlooked if not.

Car maintenance? How much were the tyres you just bought? Does this really cover the expenses of the car?


Even if you only get your haircut annually you still need to account for it - if it's £24 per visit then that's £2 per month.

Do you really spend nothing on Entertainment?


You could also consider a category for house maintenance/decoration.

Anything that is on the card that isn't already accounted for in a category needs to be added somewhere - the idea being whenever you spend money your not looking for how to pay for it, your taking it from a category that already exists.

Make sure the split on household costs is fair. If one is earning more they should contribute a little more.

Well done for noticing the debt quickly, many people live on CCs for years when they hop on the property ladder and don't think about it. Addressing early means you are setting yourself to succeed long term.

All the best.

Mnd

Well done on spotting this early, I can't add anything to the budgeting advice but I will offer a couple of points. Please ignore if you don't agree, I know everyone if different and I'm not trying to offend.

You are buying a house together and getting married. That makes you a team and a partnership.
All your joint incomes and expenditure and debts/savings should be dealt with together, it's the same money

Please don't go OTT on your wedding, you seem sensible, and you can have a great day without running into debt that may take ages to pay off.

Good luck in your future

Katapolt

thank you all for your help and feedback. i havent done an soa before so got a bit confused by it all, sorry.

things like the insurance we pay annually, and to be honest this is usually something my OH will just upfront for, same as the tv license.

im going to sit and work it all out properly i think. I buy clothes maybe every few months, ill get a top or something, but yeah youre right it all needs to be taken into account. i struggle when it isnt a regular cost, but i think thats how it trips me up.

we put £800 each into a joint where all the food and household stuff comes from. our average weekly shop is £25-30 (thanks Aldi!) and we batch cook a lot so that helps.

Thanks for all being so understanding. The wedding saving is minimal at the moment, as i just want to get it under control.

Heres my monthly outgoings - not taking into account any spending for/on myself

Income - £1400
Money to joint - £800
Car finance - £165
Petrol - £200 (i work far away)
Phone - £35 (only a short while left!)
Credit card - £125
Pet insurance - £10

This leaves me with £65. Thats so much worse than i originally thought.

Ill have a chat with the OH tonight as see what we can do. Hes supportive, so that helps.

[Deleted User]

Roxydebtfree20 wrote: »

think you need to check your soa again! you have a million pound mortgage on a house valued at £22,000

Not a million pound mortgage on those repayments: more like 200,000

EssexHebridean

Comments in red as usual

Katapolt 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.................... 2

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 1800
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3200

Monthly Expense Details
Mortgage................................ 975
Secured/HP loan repayments.............. 166
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 145 Splitting this over 12 months might make sense
Electricity............................. 87 This is a bit high - have you shopped about to check you're on the best deal?
Gas..................................... 0
Oil..................................... 0
Water rates............................. 12 This is very low - metered? Have you checked it's correct as it does seem a bit low for a couple even if you were really watching what you used!
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0 No TV? Or has this been forgotten
Satellite/Cable TV...................... 0
Internet Services....................... 30
Groceries etc. ......................... 120 This also seems a bit low - no offence, but this is the sort of figure we'd expect to see against a couple ONLY if they were really shopping around, cooking everything from scratch and deal-hunting all the time - you don't strike me as that person?
Clothing................................ 0 Never? Nothing at all? Not even a fresh pack of knickers every now and again?
Petrol/diesel........................... 200
Road tax................................ 0 Both cars are exempt from tax? I understand that yours might be included in your lease deal.
Car Insurance........................... 35
Car maintenance (including MOT)......... 15 Is a lot of maintenance stuff included in the deal for the leased vehicle? Even if so you need to remember the things that aren't - tyres etc perhaps?
Car parking............................. 0
Other travel............................ 0You never get the bus or a cab as you fancy a drink o a night out?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 25 If this is prescription fees then think about going pre-paid
Pet insurance/vet bills................. 10
Buildings insurance..................... 7.5
Contents insurance...................... 7.5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0 Neither of you ever have a haircut?
Entertainment........................... 0 Now I KNOW this isn't realistic - you definitely spend something here!
Holiday................................. 0
Emergency fund.......................... 100
Total monthly expenses.................. 1990


Assets
Cash.................................... 2000
House value (Gross)..................... 22000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 24000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 1276650..(975)......0 We've already established that there is something wrong here
Hire Purchase (HP) debt ...... 3000.....(166)......0
Total secured & HP debts...... 1279650...-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................3200......125.......0
Total unsecured debts..........3200......125.......-


Monthly Budget Summary
Total monthly income.................... 3,200
Expenses (including HP & secured debts). 1,990
Available for debt repayments........... 1,210
Monthly UNsecured debt repayments....... 125
Amount left after debt repayments....... 1,085

Personal Balance Sheet Summary
Total assets (things you own)........... 24,000
Total HP & Secured debt................. -1,279,650
Total Unsecured debt.................... -3,200
Net Assets.............................. -1,258,850

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


Things Like the car and the phone i plan to change when i can. Phone is due up at the end of July. Change the Phone to SIM only when the contract finishes, then start putting aside an amount each month to buy a new phone outright when one is needed. My car is on a lease agreement and i'm in the process of working out if i can get rid of it early, but from what they've said thus far it'll cost me the same amount to hand it over as it would cost for me to keep driving it for the next 18 months.

For the credit card min payments i dont know what the minimum is as i have a DD set for the £125 a month Good - well done!. Also, i dont have access to mu OHs wage for my debt - it isn't his issue and he saves very well, so i need to deal with it myself. This makes sense - BUT it also makes your Surplus figure in the SOA completely meaningless - we can look all we like at the SOA but the bottom line is that currently you're putting over 50% of your income to household bills from what I can see, then an additional sum on your car/phone?

I'm going to suggest you do the SOA again from just your own perspective - so include your share of the bills - and anything you pay for out of your own salary. That will give a far clkearer picture of where you stand.

There are currently some big questions over your figures as others have said - the grocery and water figures ring alarm bells as both look too low - not saying they're definitely wrong but my suspicion is that they are. The entertainment figure however IS wrong - unless you're hermits you definitely do spend in that category!

I've noted your comments about the TV license etc - but you do still need to set money aside for the annual stuff on a monthly basis - that is the difference between knowing it is there when the payment becomes due, and having to think "where are we paying that from!" - you've said it yourself -

i struggle when it isnt a regular cost, but i think thats how it trips me up.

that's precisely how you're getting tripped up.

Your account of your own spending also points out the holes in the SOA - all that petrol amount stated is for you, but you run two cars - so there should be an additional fuel spend?

You and your OH definitely need to sit down together and work out a viable plan for your finances going forwards - it's not vital that ALL your money has to go into one pot - although a central joint account for joint expenses is a good way forwards as you've already identified - but you do each need to be putting in an amount that reflects your individual incomes.

I'm afraid I do take issue with this phrase from Mnd:

All your joint incomes and expenditure and debts/savings should be dealt with together, it's the same money

Nope - the OP has - as she acknowledges - got herself into a mess, she needs to pay her way out of it (allowing that it is now on 0% interest, so isn't costing them anything) as this is the only way she's going to learn, and not get herself into the same hole again! what DOES need attention though is the situation that has got her into said mess - ie putting in an unreasonable amount to joint finances.

This is definitely a rescuable situation Katapolt - you're going about the solution the right way, you just need to treat the cause as well and you're there.

Katapolt

thank you, i appreciate all those comments. I dont really know how to do the SOA to take into account the fact the £800 i put into the joint covers the mortage, food, all household stuff. the only thing i pay myself is the car, petrol, phone, pet insurance and credit card, plus all this extra rubbish thats got me into this situation.

I know the grocery bills and water bills seem low, but they are correct. We batch cook from scratch, its just how i was raised. Im used to being broke, so have never lived differently.

The water bill - well i can only go off what they've billed us for, and they say they read the meter so, apart from that i dont know.

We dont go out, we dont get taxis or anything, as we know we cant afford it.
I know a lot of you probably dont believe me, and i fully get that, its just ive gone from saving for a deposit (saved £4k in 7 months) to owning a house and now feeling so out of my depth.

enthusiasticsaver

Katapolt wrote: »

thank you, i appreciate all those comments. I dont really know how to do the SOA to take into account the fact the £800 i put into the joint covers the mortage, food, all household stuff. the only thing i pay myself is the car, petrol, phone, pet insurance and credit card, plus all this extra rubbish thats got me into this situation.

I know the grocery bills and water bills seem low, but they are correct. We batch cook from scratch, its just how i was raised. Im used to being broke, so have never lived differently.

The water bill - well i can only go off what they've billed us for, and they say they read the meter so, apart from that i dont know.

We dont go out, we dont get taxis or anything, as we know we cant afford it.
I know a lot of you probably dont believe me, and i fully get that, its just ive gone from saving for a deposit (saved £4k in 7 months) to owning a house and now feeling so out of my depth.

The mortgage was given as a joint debt calculated as affordable on a joint income but you are not joining your income so this is why you are having problems. Your salary is £5000 less than your partners so he should be paying a bigger percentage if you don't intend using joint finances.

Mnd

Hi EssexH, I did say to ignore my comments if the OP didn't agree, but when we got together we could have been this couple. I sorted all my wife's debts 1 by 1, and now she is as good as gold financially.
I realise that not everyone thinks the same, but when we got together and bought our home together, that's when her debts became our debts..m

Katapolt

well, i dont really see why all our finances should meld into one, but maybe thats just me. we have a joint account, of which we both put into for all the thigns we need that are a joint responsibility, but the rest we keep for our personal responsibilities.

I think thats partly due to the fact i wont let my OH help. I feel like everything should be equal, so i worked my butt off to get as close as i could to an equal part of the house deposit, and i feel i need to put in half the budget for the wedding too. He has very different ideas and doesnt care tbh, he will pay and help and has no concerns, but i think its a pride thing on my part.

Mnd

That's fair enough, I only suggested what works for us.
Best Wishes to you both.M