Which debt first? - SOA included

redmel1621

Dh and I are having a 'discussion' about which debt to hit first... We can't agree, so I thought I would turn to you lovely/nosy/helpful lot for advice. Here is my SOA for you.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 4
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 1776
Benefits................................ 242
Other income............................ 0
Total monthly income.................... 3018

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 177
Electricity............................. 100
Gas..................................... 50
Oil..................................... 0
Water rates............................. 39
Telephone (land line)................... 0
Mobile phone............................ 84
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 44
Groceries etc. ......................... 500
Clothing................................ 30
Petrol/diesel........................... 160
Road tax................................ 7.7
Car Insurance........................... 76
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 44
Other child related expenses............ 44
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 15
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 50
Holiday................................. 50
Emergency fund.......................... 25
Deezer.................................. 15
Netflix................................. 10
Total monthly expenses.................. 2280.7


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 13000
Other assets............................ 0
Total Assets............................ 13000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Lloyds Bank overdraft..........1533.12...15........0
SLC overpayment................1712.55...10........0
Credit Union...................344.24....52........42
Hitachi Bike loan..............4245.12...117.......40
Lowell O2......................849.8.....10........0
Lowell Littlewoods.............559.9.....10........0
Next...........................230.......5.........0
Raphael car finance............12184.....248.......30
Restons aqua cc................528.4.....5.........0
SLC overpayment................752.89....10........0
STA uni loan...................1037......10........0
Council overpayment............350.......50........0
V12............................200.......30........0
V12 finance....................863.19....25.67.....18
V12 finance....................837.37....30.84.....18
Total unsecured debts..........26227.58..628.51....-


Monthly Budget Summary
Total monthly income.................... 3,018
Expenses (including HP & secured debts). 2,280.7
Available for debt repayments........... 737.3
Monthly UNsecured debt repayments....... 628.51
Amount left after debt repayments....... 108.79

Personal Balance Sheet Summary
Total assets (things you own)........... 13,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -26,227.58
Net Assets.............................. -13,227.58

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

Dobbibill

Hi redmel.

A few thoughts from me.

If your council tax and water rates are both over the standard 10 months, change them to 12 months to free up more each month to throw at the debt sooner. You sacrifice your 2xfree months so to speak but with debt charging interest daily it possibly the better option.

How many mobile phones are you paying for? Do you pay for the kiddies too? If not, it's quite high.

No TV licence? (I see you have Netflix so that could be why but just checking)
Car maintenance amount seems low given you have 2 cars.

you have an entry for Emergency fund but no entry for cash - is that an error or has the EF only just started?
I would attack the credit union debt first given the interest rate assuming you do have the amount you say left each month. Using that along with the agreed payment will see it gone in 3 months meaning you can snowball that onto the Hitatchi bike loan second.

HTH

beanielou

I would go with the highest APR debts first so in your case the credit union & the bike loan.

beanielou

Also, £100 per month is a lot to spend on birthdays & Christmas.
Could you cut that down a bit?

redmel1621

Dobbibill wrote: »

Hi redmel.

A few thoughts from me.

If your council tax and water rates are both over the standard 10 months, change them to 12 months to free up more each month to throw at the debt sooner. You sacrifice your 2xfree months so to speak but with debt charging interest daily it possibly the better option.

Unfortunately the council tax is over less time atm due to changes in circs (twice) and them recalculating it etc etc... Next year it will be back down to the regular amount of £144

How many mobile phones are you paying for? Do you pay for the kiddies too? If not, it's quite high.
Yes, we are paying for kids mobiles too. We took them out last Christmas (stupidly) on contract, Once they are finished - next Christmas - we will not be paying for our eldest son's as he will be 18 (and is now working) so he can pay his own. Ds2 will keep his handset and go on to a monthly contract like ours at £10-£15pm

No TV licence? (I see you have Netflix so that could be why but just checking)
We don't watch TV, on aoccasion we watch Netflix/Amazon/youtube or listen to music.

Car maintenance amount seems low given you have 2 cars.
One is actually a motorbike and so Dh does all his own maintenance on that which keeps the costs down. The other is a car, but is fully electric and very low maintenance. However, I do agree it might be a little low.

you have an entry for Emergency fund but no entry for cash - is that an error or has the EF only just started?
No emergency fund as yet (something we need to look at)

I would attack the credit union debt first given the interest rate assuming you do have the amount you say left each month. Using that along with the agreed payment will see it gone in 3 months meaning you can snowball that onto the Hitatchi bike loan second.

HTH

Thank you for your input. I think paying off the Credit Union first is the most sensible. I then think we should pay off the Council one... I'm mainly thinking that because it will be a bit lower by the time we have cleared CU loan, but will free up anther £50pm.

redmel1621

beanielou wrote: »

Also, £100 per month is a lot to spend on birthdays & Christmas.
Could you cut that down a bit?

I spend £200 on each at Christmas and £50 on each for birthdays. I don't think that is excessive really. I don't spend a penny on them all year, except maybe a few sweet here and there... they get zilch in the way of anything else. Even clothes are cheap boring ones and then I buy them a nice item of clothing at Christmas. Ds1 and 2 like gaming hoodies. They cost about £50 each, so I treat them to one at Christmas. Then they get xbox live/ps4 sub etc which is anther £40. That only leaves £100ish which in this day and age does not buy a lot. I go for quality/needs over cheap tat for the sake of it.

That said. DS1 will be 18 by the end of this year (and he is now working) and therefore I will cut the amount I spend on him next year to maybe £100ish (or less)

The other £200 is spent on Dh and I. We spend £50 on a nice meal out for each of our birthdays, along with a card/cake and then the other £100 usually gets spent on something between us for Christmas... or it gets chucked into the Xmas food spends (or we may treat ourselves to some perfume/aftershave each....

enthusiasticsaver

I would tackle the credit union first then the hitachi loan due to the extortionate interest rates.

redmel1621

enthusiasticsaver wrote: »

I would tackle the credit union first then the hitachi loan due to the extortionate interest rates.

We will definitely be overpaying on the Hitachi loan. I am pretty impressed with them actually. You can log into your account online and see your balance, payments etc. You can change bank details online and also make overpayments, which come off your initial balance and reduce the interest repayable. It is so user friendly.

I think I am inclined to pay off the Credit union and the Council first, as that will free up £102pm. We can then overpay that to the Hitachi loan, whilst using the other £100 to overpay the smaller ones and get them cleared (Next/V12 £200/Littlewoods etc... each one of those we pay off will free up more money each month which we can then also add to the Hitachi overpayments.

enthusiasticsaver

At 40% interest I would be putting every spare penny to the Hitachi loan especially if the others are 0% or low interest. At the moment that loan is charging around £140 a month in interest so more than your monthly payment.

enthusiasticsaver

I think I would prioritise the Hitachi loan over everything else. The credit union is a much smaller balance and the monthly payment at least covers the interest so it is reducing. If you stick to that £117 the balance must be going up unless the interest was front loaded? Does a monthly interest figure go on or does that £4245 include the interest for the whole loan? What term is it being paid over?

redmel1621

The figure on all of the debts includes the interest (on the few that have interest). The Hitachi loan was £2500, so the higher figure I have put is the full amount we are paying back. I think it is over 3yrs.