In a mess, need some perspective, SOA

YORKSHIRELASS

Statement of Affairs and Personal Balance Sheet[/b]

Household Information
Number of adults in household........... 4
Number of children in household......... 0
Number of cars owned.................... 3

Monthly Income Details
Monthly income after tax................ 1625
Partners monthly income after tax....... 900
Benefits................................ 83
Other income............................ 0
Total monthly income.................... 2608

Monthly Expense Details
Mortgage................................ 349
Secured/HP loan repayments.............. 250
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 137
Electricity............................. 75
Gas..................................... 0
Oil..................................... 50
Water rates............................. 22
Telephone (land line)................... 105
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 350
Clothing................................ 30
Petrol/diesel........................... 100
Road tax................................ 3
Car Insurance........................... 31
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 240
Medical (prescriptions, dentist etc).... 16
Pet insurance/vet bills................. 9
Buildings insurance..................... 28
Contents insurance...................... 0
Life assurance ......................... 22
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 30
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1929


Assets
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 10000
Other assets............................ 0
Total Assets............................ 220000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 21261....(349)......1.37
Secured Debt.................. 25000....(250)......5.24
Total secured & HP debts...... 46261.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin.........................8421......84........0
Halifax........................3173......38........0
MBNA...........................9277......93........0
Barclaycard 2..................2098......71........21.2
Barclaycard 1..................10556.....238.......20.7
Total unsecured debts..........33525.....524.......-


Monthly Budget Summary
Total monthly income.................... 2,608
Expenses (including HP & secured debts). 1,929
Available for debt repayments........... 679
Monthly UNsecured debt repayments....... 524
Amount left after debt repayments....... 155

Personal Balance Sheet Summary
Total assets (things you own)........... 220,000
Total HP & Secured debt................. -46,261
Total Unsecured debt.................... -33,525
Net Assets.............................. 140,214

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

Deep breath. Please see my SOA above. My income has gone down as we were previously relying on my overtime which has been cut. The £900 is the average monthly profit from DHs self employment, so after expenses like running his vehicle. He is trying to increase this but this is worst case scenario.

We also have two sons 18 and 20 who live at home. DS1 had an accident and temporarily moved back home, he has just got Universal Credit. DS2 is currently doing A levels, the £240 is for him to get to college which ends in May. He goes to Uni in September but will have to be self sufficient.

We have a Mortgage Reserve with Barclays (the £25k) which has to be cleared when our mortgage ends in 6 years time. We are paying £250 a month which is not enough to clear this.

We run 3 vehicles and live somewhere where there is no public transport. DS1 has done an apprenticeship and we have helped him a lot financially, which has contributed to our debt. As soon as he is recovered and can start earning he will pay us something back. DS2 gets very little from us other than his college travel.

The debt seems to have piled up, a lot of of it stupidity and bad management. I am worried sick, cant sleep and am desperate to put things right.

Ideas please.

Sanctioned_Parts_List

At first look, not so terrible. It doesn't look bad enough for a DMP or anything more dramatic, to me.

Your living expenses already look reasonable, and you've a good amount available for debt repayments. Some obvious questions though - is your SOA complete and accurate based on what you are currently spending, not on what you intend to spend? Reason for asking is that the exercise only works if it's based on reality and not forecasts - normally for debts of this level, I'd expect to see a slight cash negative each month to account for how the debt built up in the first place.

So...
1) Do you actually have £155 left over at the end of every month?
2) (Bear with me because it's not very MSE) do you need to pay that £250/mo towards the secured loan, or can it be reduced short term?

Without knowing the expiry dates on your 0% cards, it wasn't very revealing, but taking your SOA on trust I had a play with the snowball calculator ( http://stoozing.com/calculator/snowball-calculator.php ) on the assumption that you did have that extra £155 available, and that your 0% deals would stay 0%, by switching to new deals at the end of each period.

Anyway, you could be slightly more efficient with your existing repayments and clear the credit cards in about 55 - 60 months, which will then leave you in an awkward place for your secured loan.

If you are able to stop supporting your second son in May, that would obviously reduce the period to 36 months, which would give you just about enough time to save the £25000 needed to clear your secured loan before the deadline.

From what I can see, your fastest, safest bet is to increase your income, and about the easiest way to do that will be to take in a lodger when one or other son moves out, or take on a second job, or both.

YORKSHIRELASS

Thank you. I take your point about the SOA needing to be accurate to mean anything. In reality much of the £150 "spare" per month has been going on our eldest son recently - just helping him with clothes, running his car, etc. We also have no savings to pay for one off bills (like the boiler needing servicing) so I suppose we should have something in there for that. But we are prepared to live very frugally and have already cut out all unnecessary spending.

We dont have to pay anything towards the secured loan and in theory could throw it all at the cards - but that feels a little scary. £100 a month would cover the interest though.

We have just renewed the Virgin 0% deal until 31/12/2020 and the MBNA until March 2020, we just have to hope we can keep getting 0% deals, if we have to start paying interest that will put a lot more strain on the repayments.

DH has just taken on some new work which might give us an extra £150 a month. He could possibly increase his profits further but needs some encouragement to do that.

I can take on some short term extra work which will give us £150 - £220 extra a month and there is a possiblilty of a pay rise later this year for me. And we have said that as soon as the eldest son is earning he has to start contributing if he is living at home.

On the downside DHs work van is 15 years old and has not cost us too much so far. It might be that he just has to get something very cheap when it comes to the crunch. In theory there should be no other big expenses on the horizon.

getmore4less

How much room do you have on the barclays reserve?

How old are you?

Sanctioned_Parts_List

That all looks very positive.

I think you're in that awkward position where you've just got to knuckle down and get on with it - you've caught things early enough not to need complex arrangements like DMP or IVA, which is good, but not early enough to avoid the trap of secured loans, which applies a time limit.

At full earning and saving potential, you could save that £25k loan value in less than 2 years. But at the moment you will not cover it, in which case having paid a few extra pounds towards it won't matter anyway.

I would reduce the payment on that too just cover the interest for now. Then make #1 son's life a little harder by cutting off the help - he gets UC, spend that. Then take the extra hours. It's hard, but the sooner you make headway, the sooner you'll sleep at night.

That done, play with the snowball calculator, and come up with a strategy. Getting it all paid off before the secured loan clock runs out is achievable, though, I think.

Sorry for brevity - I'm in the wrong timezone, it's late. Will check in tomorrow - hopefully the clever people will have joined in by then, too 😁

theoretica

If your husband is working full time does he realise how much less he is making than minimum wage? Would be be better off looking for salaried employment? From April, minimum wage on 38 hours a week will give £1200 take home. Something to think about, especially if he is currently working long hours.

YORKSHIRELASS

Thanks so much for the helpful comments. DHs business is a bit of a touchy subject and he refuses to budge on it. Better things are always just around the corner but I have been through all the numbers with him and he does understand that his earnings are low. He points out that he spends hardly anything on himself and never goes out or has any hobbies, plus his vehicle costs £1700 a year to run, and he would have to still run a vehicle if he got a job. I just have to keep working on this one.

Of course the advantage of being self employed is that you can increase your earnings and DH has a good business with plenty of work. The downside is that you have to be motivated to do this, and careful to budget for fluctuations in earnings across the year which we have not done.

Barclays Reserve has £2k available on it, so not great. DH and I are both 46. We have had a very honest conversation with both boys and they understand that they have to start standing on their own feet financially.

Any more comments welcome.

JayRitchie

Hi. It doesn't look so bad really. How old are you and your husband? That makes the big difference. What line of work is your husband in? He needs to increase his income one way or another.

enthusiasticsaver

Why is your telephone bill so high?

I think you need to carry on with the £250 secured loan payments. Always prioritise secured loan payments over credit cards.

You have no savings so if that budget is correct I would allocate some of the spare money to an emergency fund. You are putting a roof over your boys heads and feeding them so I am not sure you should be giving them money too when you can't afford it.

Tackle the Barclaycard 2 first to get that down as far as possible when you have any spare money.

YORKSHIRELASS

Telephone bill is 4 mobiles (yes paying for son's there too), plus broadband, line rental, calls and BT TV package.

enthusiasticsaver

Can you move to sim only on any of the mobile contracts or cancel the tv package? The boys get payg phones.