SOA - How?

Unicorn_cottage

Would be good to know what your debts are i.e. credit card 1 @ 8% etc. It is likely that the overdraft is costing you the most so good to have this information so that you can target overpayments appropriately whilst paying minimum payments to other debts. Also do you have anything you can sell? Facebook marketplace is a great way to sell stuff now for free unless it is super specialist. So get any languishing bits and bobs on there and make sure that money goes into your bank account and straight to your debt.

Compulsive

@essexhebridean thank you so much. I think that’s exactly what I needed to hear! I’ve sold almost all I can but have made the mistake of using that as “extra” money. Only 1 credit card at the moment at 0%. I don’t use it. It was a money transfer to zero the overdraft because I was at my limit.

foxgloves

Ohhh, your behaviour around money is so like how I used to be before I was struck by a massive LBM about 10 years ago, when we changed our spend ways & paid off £30k of debt. Agree completely with the advice that's already been given. You need to plan more & when you are tempted, you need to make different choices. Meal planning can save a huge amount, not just on your grocery budget, but on those expensive extra food spends which usually come down to habit/lack of planning...... frequent takeaways (we had one or two a week....now only about four a year), our seeming inability to walk more than 50 metres down any high street without popping in to a coffee shop, top-up shops at the supermarket on the way home from work because you can't remember what food you've actually got in but you almost certainly won't fancy it as much as the expensive thing you're now going to buy, etc, etc. Oh, & taking packed lunch to work every day. Honestly, it takes minutes, that's all, & in our case, we worked out that we'd previously spent £2000 per year popping out to upmarket purveyors of sandwiches in our lunch hours.
The key is to do a forensic analysis of your bank statements, identify all the money leakages, then put practical plans in place to plug them.
When I first started debt busting, I got my overdraft paid off first. Stop wasting money, so that each month, the amount you are overdrawn reduces. When it's gone, budgeting is much easier because all your income is your own. It isn't disappearing into a black hole. Then you can increase your repayments to other lenders. But get those naughty leaks plugged.
Good luck,
F

Compulsive

Thank you so much. You have just described it in a nutshell. I’ve sorted childcare for tomorrow morning and I’m going to head to the library to spend 4 hours trawling statements and making a proper SOA. Hopefully no distractions and an environment where I can really think will help this all come together.

Compulsive

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1900
Partners monthly income after tax....... 1160
Benefits................................ 137.6
Other income............................ 45
Total monthly income.................... 3242.6

Monthly Expense Details
Mortgage................................ 688.9
Secured/HP loan repayments.............. 182.10000000000002
Rent.................................... 0
Management charge (leasehold property).. 15
Council tax............................. 268.89
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 16
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 32
Groceries etc. ......................... 280
Clothing................................ 80
Petrol/diesel........................... 160
Road tax................................ 10.5
Car Insurance........................... 51.45
Car maintenance (including MOT)......... 20
Car parking............................. 10
Other travel............................ 20
Childcare/nursery....................... 200
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 64.02
Buildings insurance..................... 29.17
Contents insurance...................... 0
Life assurance ......................... 53.51
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 80
Entertainment........................... 160
Holiday................................. 200
Emergency fund.......................... 100
Cleaner................................. 48
Window Cleaner.......................... 10
Swimming................................ 50
Acrobay................................. 30
EIS..................................... 13.47
Total monthly expenses.................. 3035.13


Assets
Cash.................................... 448.02
House value (Gross)..................... 245000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 248448.02


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 198045...(688.9)....2
Secured Debt.................. 3095.....(182.1)....4.9
Total secured & HP debts...... 201140....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit.........................2884......18.11.....0
Credit.........................300.......10........0
Total unsecured debts..........3184......28.11.....-


Monthly Budget Summary
Total monthly income.................... 3,242.6
Expenses (including HP & secured debts). 3,035.13
Available for debt repayments........... 207.47
Monthly UNsecured debt repayments....... 28.11
Amount left after debt repayments....... 179.36

Personal Balance Sheet Summary
Total assets (things you own)........... 248,448.02
Total HP & Secured debt................. -201,140
Total Unsecured debt.................... -3,184
Net Assets.............................. 44,124.02

Compulsive

Hi, I've posted my SOA. I did it myself including all the takeaways etc the now but this is my "realistic" version. I've budgeted enough in entertainment to include a monthly take out and days out etc.
What do I do now? Does this mean I have £179 a month to overpay debts?
Sorry - I just find this so confusing.
Thanks so much to all who have helped so far.

EssexHebridean

Right then - l;et's take a look. Comments in red, as always.

Compulsive wrote: »

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1900
Partners monthly income after tax....... 1160
Benefits................................ 137.6
Other income............................ 45
Total monthly income.................... 3242.6

Monthly Expense Details
Mortgage................................ 688.9
Secured/HP loan repayments.............. 182.10000000000002
Rent.................................... 0
Management charge (leasehold property).. 15
Council tax............................. 268.89 Assume you're in scotland and this includes water rates? Either way though this seems VERY high - especially in light of your property value as stated.
Electricity............................. 50 Use the comparison sites to make sure you're on the best deal for this and your gas. also look to reduce useage.
Gas..................................... 50
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0 Bundled with internet?
Mobile phone............................ 16
TV Licence.............................. 12.12 Check the pennies on this - mine's recently gone up.
Satellite/Cable TV...................... 0 No paid for TV services at all?
Internet Services....................... 32 If this includes line rental then fair - if not then it's expensive.
Groceries etc. ......................... 280
Clothing................................ 80 This is a bit high - for now trim to essentials only for adults (pants & socks) and look to charity shops/eBay for kids stuff for everything aside from underwear.
Petrol/diesel........................... 160
Road tax................................ 10.5
Car Insurance........................... 51.45
Car maintenance (including MOT)......... 20 for two cars this is a lot too low. Think of Serv icing, MOT, tyres, screenwash...
Car parking............................. 10 Is this avoidable - can you park & walk for example?
Other travel............................ 20
Childcare/nursery....................... 200
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20 Can this be made cheaper by using pre-paid prescription cards?
Pet insurance/vet bills................. 64.02 This is VERY high - have yiou checked that the cover you get is worth the cost, and whether there is anything available for better value from elsewhere?
Buildings insurance..................... 29.17 This includes contents too, yes?
Contents insurance...................... 0
Life assurance ......................... 53.51 have you done a recent price comparison to check this is your best value option for the cover you need?
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 80 HOW much? This is for 4 of you, two of whom are kids and one of whom is a chap, right? If you'd said half of that in a month I'd have said it was too pricey!
Entertainment........................... 160 This sounds quite high for someone in debt, if I'm honest.
Holiday................................. 200 Is this something you're committed to already?
Emergency fund.......................... 100 Yep - great.
Cleaner................................. 48 Your partners monthly income suggests part time hours - allowing for that, there is not really any place for £48 a month to a cleaner.
Window Cleaner.......................... 10
Swimming................................ 50 Is this lessons, for the kids?
Acrobay................................. 30 Gymnastics club? Might be better to bump this and the swimming under other child costs to be honest.
EIS..................................... 13.47 What's this - and is it actually needed?
Total monthly expenses.................. 3035.13


Assets
Cash.................................... 448.02 Allowing that you're putting £350 a month aside for EF, car maintenance, presents and holiday, this doesn't quite add up. Are those amounts definitely being put away?
House value (Gross)..................... 245000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 248448.02


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 198045...(688.9)....2
Secured Debt.................. 3095.....(182.1)....4.9
Total secured & HP debts...... 201140....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit.........................2884......18.11.....0 is this a credit card? If so when does the 0% interest finish? The monthly payment also looks very low - is this a typo? If not are you definitely paying the minimum payment?
Credit.........................300.......10........0 is this a credit card? If so when does the 0% interest finish?
Total unsecured debts..........3184......28.11.....-


Monthly Budget Summary
Total monthly income.................... 3,242.6
Expenses (including HP & secured debts). 3,035.13
Available for debt repayments........... 207.47
Monthly UNsecured debt repayments....... 28.11
Amount left after debt repayments....... 179.36 Do you actually have this each month?

Personal Balance Sheet Summary
Total assets (things you own)........... 248,448.02
Total HP & Secured debt................. -201,140
Total Unsecured debt.................... -3,184
Net Assets.............................. 44,124.02

There is some wiggle room there as there is a fair amount of "luxury" in there - the holiday spend, and the haircuts are the obvious ones, but also a high monthly clothing spend.

Be sure where you are budgeting for month being put aside for things that actually happens - and revisit that car maintenance amount pronto as for cars of the ages yours presumably are this is a long way short of enough! An annual service is going to cost you £100 - £150 for each, and a set of tyres even every 2 years on each car is going to be another 120 - 200 a year or possibly more. Add in MOT and sundries and I'd think you need at LEAST £50 a month going to that area, for security.

enthusiasticsaver

Ok there are some things on that soa I would say are not essential but your debts aren't huge so it is your call as to which takes priority. I am not sure how old your kids are but if your partner is part time it does not seem unreasonable for he/she to clean the house and dispense with the cleaner and the entertainment could be shaved off a bit too. You have some savings which is good but if you are saving the £200 monthly for a holiday the balance looks low unless you have already paid for it. Even without cutting anything you have £179 spare each month which could go towards the credit card as the monthly payment looks very low.

I wonder if a spending diary would work for you where you record everything you spend for a few months to see how accurate that soa really is. When do the 0% deals expire? What was the secured loan for?

macman

£636pa on life assurance, but no contents insurance at all?
£768 on vet bills?
Query no water rates-you are in Scotland?
Query C. tax at £3216pa?!
You may think some of the SOA comments are nitpicking, but you can't begin to manage your debt until you know exactly what your assets and liabilities are.

Compulsive

Thanks so much to all who have replied. To clear a couple of things up.
Dog is epileptic on every medication going and rescue meds. No other insurance would touch him and at the moment his monthly premium is still cheaper than his meds would be.
Appreciate points about car money. Second car is newer so no MOT etc but wasn’t thinking of tyres etc.
In Scotland and unfortunately that council tax is correct! We are second highest band. Water is included.
Life insurance is joint for both me and my husband but does need reviewed.
Home insurance is buildings and contents combined.
Cleaner is absolutely a luxury but my husband is a beekeeper working across various locations so on the two days he’s not at work he’s doing that in the mornings and looking after both kids in the afternoons. We have 4 bathrooms and a huge kitchen so the cleaner comes once a fortnight for 2 hours to do them. We do everything else.
Entertainment is high. Could definitely be reduced.
1;1 swimming lessons for my 4 year old and gymnastics is for both him and the 2 year old. 2 year old not yet entitled to any free childcare. 4 year old is half day at nursery. We pay for a childminder on a Friday and playgroup 2 days a week for the wee one.