Please help me get my head around this.

pumpkin89

Thanks for the responses. I don't want to hijack OP's thread any more than I already have, so will post elsewhere but clearly need some help with the energy bill.

Willing2Learn

pumpkin89 wrote: »

Thanks for the responses. I don't want to hijack OP's thread any more than I already have, so will post elsewhere but clearly need some help with the energy bill.

Check out the MSE Cheap Energy Club

macman

Energy: £67pm is perfectly normal for a house with gas CH and DHW. But £50pm for leccy is too high, I'd expect no more than £30-£35. Check your energy account balances, submit readings and get accurate billings, then ask for a refund if you are in credit by more than £100.
2 old cars worth £6K together, so you need to budget realistically for maintenance and repairs.

MovingForwards

Spread the water over 10/12 months to free up a couple of extra quid each month, alternatively make sure you put the no spend 6 months into paying off some bills (same with the council tax).

You can still have treats/rewards only make it once a month on payday. Set yourself a pocket money amount in cash and once it has been spent on treats that is it til next payday.

Clothes. Do you really buy stuff each month or is it as and when you feel like having something new/sale. Again, allow a budget and when it's gone that's it.

Draw cash out once a week for food shopping/petrol. Write a shopping list and stick to it. Also look at aldi/lidl / supermarket own brands.

You willl get there, just need to plot and plan, stick to it and soon you know no better.

middleclassbutpoor

karencks wrote: »

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 3450
Benefits................................ 0 we are no longer eligible for child beneift
Other income............................ 0
Total monthly income.................... 5050

Monthly Expense Details
Mortgage................................ 518 - we have recently fixed this until 2021
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 130
Electricity............................. 50
Gas..................................... 67
Oil..................................... 0
Water rates............................. 60 paid over 6 months
Telephone (land line)................... 15
Mobile phone............................ 40 2 phones
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 25
Groceries etc. ......................... 250 This is what I think we should be spending. We definitely waste money on buying extra food when we pop to shops on way home etc. We need to stop throwing food away!!
Clothing................................ 0
Petrol/diesel........................... 175
Road tax................................ 12
Car Insurance........................... 100 2 cars plus AA breakdown
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 120 before and after school provision.
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 10
Life assurance ......................... 37
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 20
Entertainment........................... 100 - not sure what I should have put here
Holiday................................. 0
Emergency fund.......................... 50 - should this be more?
Total monthly expenses.................. 1861


Assets
Cash.................................... 14800 - will explain this lower down.
House value (Gross)..................... 205000 - estimate
Shares and bonds........................ 0
Car(s).................................. 6000
Other assets............................ 0
Total Assets............................ 225800


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 72580....(518)......1.75
Total secured & HP debts...... 72580.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
credit card 1..................11100.....226.......0
credit card 2..................4500......99........6.9
Loan ( Paragon)................5700......248.......9.9 aaargh
MBNA 2.........................2390......70........19.9 aargh
small barclaycard..............800.......20........0
BNPL...........................1500......0.........0
HSBC...........................2500......75........0
Tesco..........................4100......125.......16.9 aargh
M&S............................4100......41........0
Asda...........................3800......38........0
halifax 2......................3000......30........0
halifax 1......................4400......44........0
My worst credit card...........6900......191.......19.9
MBNA...........................6000......180.[/B]......20
Total unsecured debts..........60790.....1387......-

Total monthly income.................... 5,050
Expenses (including HP & secured debts). 1,861
Available for debt repayments........... 3,189
Monthly UNsecured debt repayments....... 1,387
Amount left after debt repayments....... 1,802 - this shows just how much we have been wasting. This figure makes me feel both sick and embarrassed.

Personal Balance Sheet Summary
Total assets (things you own)........... 225,800
Total HP & Secured debt................. -72,580
Total Unsecured debt.................... -60,790
Net Assets.............................. 92,430[

With regards to the £14800 savings. My DH received this from his parents recently. They cashed in some investments and shared it amongst their kids. The company my husband works for is going through a big restructure over the next 12 months and whilst he doesn't think he will be affected, we kind of feel that we need to keep this money, just in case.

Here would be my plan in your shoes.....

£14,800 would be used and I would repay those highlighted above in red - reducing your monthly repayments by £441 per month- i.e. increasing your overpayment amount by £441.

I would then use the next couple of months repaying the debts in blue - 1st the tesco cc - (this will increase your overpayment by £125 a month)

then 2nd - I would then move onto the paragon loan and then the last remaining cc which isn't 0%. This gives you another £357 a month.

All of this could be cleared before you even know if the redundancy is going to happen or not.

That clears £900 a month of debt repayments...

If he is made redundant in 12 months- he can afford to accept jobs which pay £900 less a month net and you be no worse off.

You will be able to claim £138.40 child benefit again potentially,
Your expenses will reduce by £120 with childcare in this period potentially
Fuel expenses should reduce.
He will be paid for his notice period aswell as his service - so if he has a 3 months notice period for example, he will be given that as part of the payment so he may have time to look for other jobs whilst going through the notice period. Depending on what he does, the fact that he can earn less may give more options for getting back into work. If he feels pressured to get a similar paying job or can't accept a lower one due to the debts and the £14800 is being eaten away, you may find that money has not really worked effectively for you imo.

If he keeps his job well nothing lost and lots gained. If the company restructure again, he will be less stressed because you will be further on to your stress/debt free life.

For me- holding back that money to keep you afloat for 4 months doesn't outweigh the benefit of getting that debt paid down more quickly.

tealady

Hi
Re your electricity bill.
Easy things you can do are
1) Never leave anything on standby
2) Swithch off lights when leaving a room
3) If you tumble dry clothes put them outside to dry (you can buy covers for airers so washing can be out even though there might be a chance of rain.
4) Think about investing in a slow cooker
5) When you have pans on the stove use the ring which is the same size as the pan and always put lids on them
6) When using the oven see if you can cook several meals at once (jacket spuds can be eaten cold later)
7)Wash stuff at lower temperatures, not a lot needs 60 plus

I am sure the posters on here can come up with even more ideas

HTH

Sea_Shell

Facing up to the problem is the biggest step, and you've done the hardest part now.

If I were you, on your incomes, I'd go at it all hard and fast. Even if it means going without a lot of unessential (but nice) things now. Eyes on the big prize, and all that!!

As mentioned above #36, i'd also use some (if not all) of that cash to pay off those high APR debts, thereby freeing up monthly money from day 1.

Good luck.

redux

n.b. the numbers in post 36 are about cashflow, not the actual interest being saved

I see what the OP says about being cautious to keep that cash reserve, and a couple of recent posts say they'd use it all straight away to achieve maximum cut in interest.

At the moment about £19500 is on rates in double figures. If it's possible to arrange £1500 of extra monthly repayment that will clear in 15 months, with just under £2700 of interest. Across 20 months at £1150, £3600 interest. Doing £14500 now would leave £5000 and clearing that in 4 months would incur £200 interest.

Using all the reserve now risks running most of the cards into arrears if there is a slight delay in a career move, losing the 0% offers.

Until the job certainty firms up, I think I'd hedge somewhere in between, using maybe £3500 or £4500 of the cash reserve and aiming to clear the rest of the £19500 in a year, costing £1600 to £1800 of interest.

The others currently on 0% will expire and need to be recycled, so I'd be researching which cards currently charging are likely to produce new 0% offers and aim at those first.

Also, clearing a lower balance card quickly, such as maybe the smaller MBNA (unless it will offer 0% soon) would make it useful for current spending, food, car fuel, insurance etc, paid off in full each month, so a bit more with no interest.

worriedDan

Hi, I was in almost the exact same position as you last year. To say that I struggled to deal with the situation would be a huge understatement. I know how terrifying it is. I am not going to comment on your SOA or the 'numbers' as I don't feel that I am qualified to do this, other than to say that you can absolutely do this. Lots of other people on here have cleared similar levels of debts, even on significantly lower incomes. When you are feeling rubbish, please remember the following -

1 - you are not alone! Many, Many people have debts that are far higher than yours. People that you know will have high debt levels - they just don't talk about it.

2 - You are in a good position to sort out your debts. The 'excess' money that you have is equal to someones salary. Lots of people on here have their LBM at the point where there is literally not a spare penny left, or even a deficit... Please remember this when you are feeling crap.

3- Debt is relative. Focus less on the total amount you owe and more on how you are going to keep on track each month. I haven't added up my total debt levels since last year and have no plans too. I know roughly where we are. I also know that we are on track and sticking to our plan and that is enough for me.

4 - You are tackling it as a couple and that will make it infinitely easier.

5 - Don't let it take over your life. I was guilty of this for quite a while. Providing you are on track with your plan, there should be days when you don't think about the debts. I have started to allocate certain times during the week where I do my financial stuff.

6 - Don't compare yourself to others that you are perceive are doing better than you financially. It serves no purpose and in reality most people keep their finances private. A lot of the people that we envy may be facing their own debt problems.

Well done for taking these difficult first steps.You won't regret it, Keep posting

WD

benbenandme

Well done for posting your SOA and I think you will find that once the shock of it all has sunk in you may come to view this as a challenge

As you have a good income and have spent quite a lot over the years, would it be safe to say you have a lot of 'stuff' around the house? Could you maybe have a good sort out (especially areas like the loft and the garage) and do a car boot sale to clear unwanted stuff that you haven't touched for ages, clothes you don't wear, toys the kids have grown out of? Maybe you would prefer facebook selling pages etc? This would hopefully bring in a nice bonus amount to chuck at the highest interest card to get you started off while also helping you feel proactive?

It's a journey and it's about changing your mindset - some of this will happen easily and quickly, other bits will be more of an effort. Read as many stories on here as you can to understand how many other people are going through what you are, and so many of them have come out the other side Good luck x