Wanting to Avoid Secured Loan

Darksparkle

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Willing2Learn

According to your SOA, you have £486/month available to throw at your debts. Where is the money going? Is your SOA accurate? Do you need to keep a spending diary to ascertain where the money is going?

Edit: Just wanted to add that I never recommend a consolidation loan. It often leads to more debt as the underlying budgetary issues are not addressed. So the card, loan and Next account gets paid with the loan. Then what is to stop you doubling your debt through subsequent use of cards again?

MallyGirl

£600 on groceries for 2 adults and a small child - you should be able to halve that.

On the other hand there are an awful lot of things with 0 against them that shouldn't have - car maintenance, contents insurance (unless covered in with buildings), water (unless in Scotland), haircuts, presents, ...

Willing2Learn

Darksparkle wrote: »

… Whatever is left is used for things like occasional lunches at work, kid activities, days out, nights out, takeaways, presents, work expenses (which can be claimed back but sometimes takes a few weeks) things for the house,. Basically everything that's not a bill or debt. That amount just seems to disappear very quickly.

You need to allocate those expenses to categories within your monthly SOA, otherwise the SOA is inaccurate and it will be difficult to move forward. I definitely suggest keeping a spending diary to monitor your monthly budget and to work out what budget categories need to be added to your SOA.

Pixie5740

Darksparkle wrote: »

Thank you.

This is definitely something I'm wanting to work on.

Suppose just now I was just really wondering if I have any options with the debts. Feel like nothing ever really gets paid off because of interest or something comes up and is used again and can't get out of this pattern.

If you have a surplus of money every month so you snowball your debts. What you categorically do not do is turn unsecured debt into debt secured against your home. Should your income fall/expenses increase when your second child is born there are ways of dealing with unsecured debt which do not risk the roof over your head, the same cannot be said for a secured loan.

That £25k loan taken over 10 years will cost you more than £25k in interest alone so it's a false economy to say that it will save you money.

Expenses such as occasional lunches at work, kid activities, days out, nights out, takeaways, presents, should all be accounted for in your SOA. As should things like car maintenance. Your SOA isn't just a snap shot of the bills you pay monthly it needs to include the items you save for throughout the year such as new car tyres.

Potbellypig

Darksparkle wrote: »

Suppose just now I was just really wondering if I have any options with the debts. Feel like nothing ever really gets paid off because of interest or something comes up and is used again and can't get out of this pattern.

Difficult one. That's a lot of debt to shift, and the minimum payments are quite high. If you're serious about getting the debt down then you need to cut the cards up. If 'something comes up' you can't afford it, simple as.

MallyGirl

Darksparkle wrote: »

:beer:

Where's best for advice on cutting groceries?

Can't think of anything we buy for the car for maintenance every month? Only really pay for things if something goes wrong like new tires or something.

Contents is included in buildings insurance. I live in Scotland so no water rates

I rarely get my haircut but yes forgot about barbers. Overall probably £20-30 average.

As others have said, even if you don't pay out for something every month you need to work out the annual spend and then divide by 12 to add to SOA. If you had a budget to this level then things would be planned and less would 'just come up' and get stuck on a card.

You should do everything you can to avoid securing debt against your home - even more important with children in the picture.

In terms of groceries - cook from scratch, batch cook, shop at Lidl/Aldi, no takeaways or eating out as you can't afford it. Keep a diary for a month - write down what you eat and what you spend on groceries. Note every quick trip to the local shop as you have run out of milk - did you pick up something else while you were there that you didn't need? Plan your meals so you don't run out of something (avoids the chance to get carried away at the local shop) and so that you don't end up throwing out food that has gone off. Do an audit of the cupboards/fridge/freezer - see how many meals you can make with what you already have. I did this and was genuinely shocked. Get food delivered rather than wandering round the supermarket - less likely to pick up things you don't need that way.

chelseablue

Do you have an Aldi or Lidl near you?

We are a family of 3, 2 adults and a 4 year old and I go to Aldi and usually spend around £50 a week (its never been more than £60)

ratrace

Darksparkle wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1592
Partners monthly income after tax....... 2715
Benefits................................ 82
Other income............................ 0
Total monthly income.................... 4389

Monthly Expense Details
Mortgage................................ 517
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 139
Electricity............................. 43.5
Gas..................................... 43.5
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 20
Mobile phone............................ 80 Too expensive i pay £10 a month max on giffgaff
TV Licence.............................. 12
Satellite/Cable TV...................... 25
Internet Services....................... 20
Groceries etc. ......................... 600 unbelievably high for 3 of you plus you are spending money on some work lunches and some takaways as said above so the ammount you are spensing on food is insance this could be cut bk by shopping at aldi/lidel
Clothing................................ 100
Petrol/diesel........................... 75 If you are only spending £75 a month in fuel this tells me that you are not doing a lot of miles so to be blut why oh why do you need a £20k car by getting rid you can cut your bills down by a lot and just buy a small car
Road tax................................ 10
Car Insurance........................... 81
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 240
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 17
Contents insurance...................... 0
Life assurance ......................... 23
Other insurance......................... 10
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2096


Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 20000 imho way to expensive for the miles/ fuel you do and just a unnecessary expense
Other assets............................ 0
Total Assets............................ 160000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 121000...(517)......0
Total secured & HP debts...... 121000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................12500.....330.......18
Credit Card....................8500......150.......18
Credit Card....................6500......150.......0
Personal Loan..................14500.....572.......0
Next...........................3500......150.......0
Car PCP........................20000.....330.......0
Credit Card....................9000......125.......0
Total unsecured debts..........74500.....1807......-


Monthly Budget Summary
Total monthly income.................... 4,389
Expenses (including HP & secured debts). 2,096
Available for debt repayments........... 2,293
Monthly UNsecured debt repayments....... 1,807
Amount left after debt repayments....... 486

Personal Balance Sheet Summary
Total assets (things you own)........... 160,000
Total HP & Secured debt................. -121,000
Total Unsecured debt.................... -74,500
Net Assets.............................. -35,500

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

see above comments im not trying to be harsh but you can make huge cutbacks just shaving off the food bill £600 a month is too high this can be cut by atleast £50 a week so thats another £200 a month extra

get rid of the very expensive car its costing you too much a month £330 pcp payment + £75 fuel + £80 insurance + service etc...

i had a toyota yaris drove it for 3 years only spending about £800 in total in repairs, buy somthing for 5k it will do the job

there is nothing with having a nice lifestyle but only if you can afford it and this moment unfortunately you can't £75k is a proof of that, sorry i dont want to come across harsh or mean but im jut stating the facts if you carry on spending like you are with a secured loan on top you could put your house at risk if the spending habits dont change

fatbelly

Darksparkle wrote: »

Can't think of anything we buy for the car for maintenance every month? Only really pay for things if something goes wrong like new tires or something.

And a new set of tyres costs...?

As I'm interested I found a newish Ford Focus for sale and put the reg number into BlackCircles (you'd pay more from a dealer).

Turns out if you want a top-rated tyre (and if you're interested in stopping the car quickly you should be) the cheapest would be over £400 for a set of four.

So your budget should be at least £200 per year. If you have something expensive or do a high mileage I'd double that

Your car is not an asset on a PCP deal - you're effectively hiring it at £330 per month. If you want to get out of the deal you can do so at the point where you've paid 50% of the total credit figure. You can get out sooner by doing a voluntary termination but would still remain liable to pay up to the 50% figure

You've got good income and if you're serious you can get rid of this debt with a traditional debt management plan in about 3 years. You don't need an IVA and you definitely don't want a high interest 10-year secured loan!