new to the board

falady

Hi there everyone,

Forgive me a if a very similar post from me also appears - I thought I had posted earlier, but it doesn't seem to have come up on the forum, so i'm posting again.

Anyway, I've been a fan of MSE for a while, though not posted much. I haven't really been on this forum much before, but I have realised that i need to sort my debt out before it gets any worse. I have about £15500 of debt (not inc mortgage and personal loan) and earn £28k per year. I won't go into loads of detail here, just in case my previous post does appear, but can always add more details later.....

My basic problem is that I spend more than I earn (same as everyone I guess!), and although this is not causing any big problems yet, and the bills are always paid, I cannot continue to build up more and more debt or I will get into trouble with it.

I'm 27 and live with my fiancee and our 3 cats. We're getting married next year. We both earn about the same and use a joint acount to pay all the essential bills (mortgage, utilities, food, pet insurance and pet food, home insurance, life and critical illness cover, BT landline etc) plus a loan that we took out earlier this year to consiolidate our debts (thought this didn't quite work for me and I just carried on spending and had miscalculated my debt).

I have about £550 left each month after my contribution to the joint account. My student loan repayment is taken out of my salary before I get paid. The student loan counts for about £7900 of the £15500 mentioned above.

I realise that my circumstances are a lot easier than some people's, but I don't want them to get worse and want to sort it out now before it causes problems.


Any tips on where to start would be much appreciated.

I started filling in Martin's budget sheet, but found that the joint account arrangements I have with my fiance make it a bit awkward.

If I can do anything to help anyone else, i would be very happy to do so.

Ali

GirlieSurfer

How much do you set aside for personal spending, clothes-shoes-meals out etc? Also, have you checked that you are getting the cheapest deal possible for your utilities/TV/phone etc? These are the best places to start as they are the most flexible. Let us know what they are and we will see what we can come up with!

GirlieSurfer

CLAPTON

to be of help we need to know your full details i.e. income, full spending details (including breakdown of the joint account) and full debt details (amount, APRs, monthly payments )

falady

Hi girliesurfer,

To be honest, I don't really have a budget - think this is where I'm going wrong!

I think my next step is to find out my exact debts (have started doing this this afternoon) and then to set myself some sort of sensible realistic budget for the £550 i have left each month.

Thanks also for the tip on utilities - I haven't checked recently that we get the best deals. With our gas and electricity we pay monthly and it averages out over the year. I think that because they set the monthly amount too low to start with we have 'arrears' included with our current monthly payment and we would need to be up to date before we switched?

pinkshoes

Why don't you post your SOA on here so others can help you out?

ps - ignore the student loan!! that one doesn't involve balifs chasing you for payment and is paid off automatically from your salary!

falady

Hi Clapton,

I will post these details when I get home from work and have more time. I think it will give me the kick up the backside I need!

Briefly, the headline details are:

my income = 1447 per month take home pay (will go up a bit shortly with an honorarium)
I'm due an honorarium backpayment of about £300 in the next few weeks.

my contribution to joint account (JA) = £930. OH pays similar.

JA monthly costs:

Mortgage = 818.27 (£113k borrowed at Dec 05 over 25 yrs, fixed rate 4.79% until Jan 2009, plus £21k borrowed july 07 over approx 23 years (both mortgage loans will finish at same time) at variable rate of approx 7.9%??

loan = 430 (£14k borrowed over 3 yrs (poss 3.5?) taken out in Sept / oct this yr at 6.9% (I think - will check)

water = 26.50
npower gas = 45
npower electricty = 35
BT landline = 18
broadband = paid for by OH work
home insurance barclays = 39.16
life and critical illness insurance = 54.39
council tax = 120
pet insurance = 25 but think they are charging us for a phantom cat so will query this

food = varies from week to week but we do spend quite a lot. average £70-80 week, inc cat food for 3 cats and some toiletries. OH is working in australia until feb 08 so food spending should be less. This is something I know I can cut back on, but would still like 'nice' food as I am a foodie and enjoy cooking.

My personal expenses from my account:

gym = 36 don't really go - will cancel this
mobile phone = 35
amex payment = varies but paid off in full each month. Currently £660 but usually much less
virgin credit card payment - not sure what to set this at, currently 60/month on a debt of 6626.17 - need to increase this
clothes - can be quite a lot eg 200/month
taxis - can be up to 20/week
drinks out - no more than 40/month but will be more during dec due to xmas parties
meals out - 50/month but may be less due to OH being away but more during dec due to xmas parties etc
lunch at work - average £3 2-3 times per week
puzzle books and magazines - £10/month
presents eg birthdays / xmas - not sure byut have tried to keep xmas spending down

Can't think of any others at the moment but will have a more detailed look when i get home.

Thanks,

Ali

free4440273

Welcome falady to MSE DFW. Hope you enjoy your stay

falady

Dear free4440273,

Thank you for the kind welcome!

I already have a special 'money sorting out' notebook and a couple of things to sort out!! Plus writing down my spending and adding up my debt has given me a shock. Hopefully this will translate into action.......

GirlieSurfer

Ok, so things that jump out at me:

Try to combine your gas&electricity - there are some great savings to be had at the mo if you can do this. Check out Martin's tips on the Utilities page.

Definatley check your pet insurance for a phantom cat! With your food you can certainly afford nice food - but how about rationing it. I.e set yourself 'nice food nights', see it as a treat rather than the norm. Do 'normal' money saving meals 4/5 nights a week and then treat yourself with some lovely gourmet dinners on 2/3. You will appreciate them more and save money!

I'm sure you know this is coming, but the clothes allowance is rather high!! You can easily halve it and then some! How about 70pounds a month. You'll then get used to bargain shopping and feel much more satisfied with your purchases!

Do you really need the taxi's or could you walk/cycle/bus? Also, after the Xmas season try to bring down your drinks/meals out if poss - invite friends over instead and get everyone to bring a bottle! How about having a moving dinner party with your group of friends - a regular dinner party at each of your houses on rotation. Its something different that everyone will enjoy.

Food bills will naturally come down if you change your eating habits. Lunch at work and magazines are obviously a flexible luxury that should be the first to go!

You should be able to save quite a lot - maybe 200-300 per month which is amazing!

Hope that helps some

GirlieSurfer

falady

hi girlie surfer

Thank you - definitely some thoughts to be going on with!

I have contacted pet plan this afternoon about the possible phantom cat and they have no record of extra payments, so i'm going to double check through our bank statements - it might be me that has it wrong.

Thank you for the idea about food - that's a really good one that I know I can do. I love cooking so can make cheap and easy meals. its a bit strange at the moment just buying food for one person as OH is away, but I'm going to have to remember to buy less and use what i have more wisely. Some friends came round for tea over the weekend (one on fri night and three on sat night) and I tried to be quite savvy in using what i already had in the cupboard / fridge / freezer to make the meals and was pretty successful.

Friday was pea and mint soup (sainsbury's - half a tub left from previous nights tea, bulked out with extra peas and whizzed up, then salmon, greek salad and mash, with bread and butter pud to finish (stale bread, milk that was due to be replenished and cream that was a few days from going off).

Sat was pasta bake with the end of about 3 difgferent packets of pasta (panicked slightly there!) passata and a dolop of pesto and some leftover olives for the sauces, mixed with roasted veggies (needed using up) and baked in the oven with cheese on top. More greek salad with that one. The end of about 3 tubs of icecream for pud.

think I did quite well - especially compared to previous times when i would have just gone and bought ingredients especially and made whatever I fancied, not what was in.


I know the clothes allowance is the big thing that has to change. I'm really bad for impulse buiying, but it has to stop. Still allowing myself some money for clothes is a good idea though and £70 seems pretty generous.

Taxis - definitely one to come down. I live about a mile from the train station (i get the train into leeds for work) and walk to and from the station, but when its cold and dark (or I am jetlagged from visitng OH in Oz!) the tempation is there to get a cab. its ridiculous though. i will just have to get used to the uphill slog on the way home!

I'll let you know how I get on1

Thanks,

Ali x

CLAPTON

just a few comments

Firstly I'm afraid its not true that 'everyone' spends more than they earn. You need to see spending more than you earn as a crisis not a minor inconvenient 'fact' of modern life. While it might be sustainible in the shortterm it will quickly become more and more uncomfortable and will start limiting your lifestyle options.

You have made a good start on the budget but can you take the following on board and repost in due course

a. put everything on a monthly basis... so work lunches are (say) 36 per month and food is 300 per month or whatever.

b. you must include all the annual and one off spends otherwise you wont be able to see by how much you are overspending or on what
so that means if you spend 360 on xmas then write in 30 per month (360/12), similarly you need figures for birthdays, any holidays, weekends away etc?
Do you spend anything on the house or applicances or furnishing etc?
In any event if you own a house you need an emergency fund to pay for breakdowns / repairs etc.

Thirdly ; what do you mean you spend 600 on amex ... is that in addition to 200 on clothes, meals , drinks etc or is it included. If its the same then this is double counting if not what exactly is included.

Forthly : do you have any travel expense except taxi. (or car?)

Fifthly : you say you are getting married next year (congratulations by the way) but is it going to be an inexpensive do or is it costing a lot and how are you planning to pay for it?


Basically what you should be aiming at is to know where all your money goes averaged over a full year so you can compare this with your income and see how much you are overspending and on what so you can make informed choices about cutting back.