This time I mean business!

Legacy_user

I've lurked around the forum for some time. I have a history of living beyond my means for most of my adult life. Debt has become the norm for me and I have usually managed to pay it off via a house sale or redundancy. But once again I'm in the same position. I owe just over£7k. It's almost cost me my relationship as I hid it from my partner and the stress of it almost gave me a breakdown. She's moved out but we remain in a relationship, living together was not working but we are going to try living seperately. I've told her about my debt and she just wants to support me emotionally and I have vowed to pay it off before we even consider moving in together again. I'm actually a good money saving advocate when it comes to household bills, well within my means. I'm going back to Uni in September which will mean a reduction in income and student loan will cover my course but I will have extra costs. I need to budget and pay the debt off plus live. My partner had paid half the bills which would have given me adequate to address my debt however I spent it on holidays etc. She had no idea what I was paying out and is very good with money so presumed I was ok. I feel ashamed of myself. I'm 50 years old and should have addressed my emotional spending habits long ago.

But here I am, ready to get going. Here's my SOA:-




Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1494
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1494

Monthly Expense Details
Mortgage................................ 468
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 12.50
Council tax............................. 82
Electricity............................. 31.50
Gas..................................... 31.50
Oil..................................... 0
Water rates............................. 33.83
Telephone (land line)................... 16
Mobile phone............................ 11.00
TV Licence.............................. 12.2
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 120.00
Clothing................................ 0
Petrol/diesel........................... 60
Road tax................................ 2.62
Car Insurance........................... 60
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 5
Contents insurance...................... 5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Toiletries.............................. 10
Sport................................... 0
Union Fee............................... 0
Bike Maintenance ....................... 0
Total monthly expenses.................. 1051.15



Assets
Cash.................................... 600
Credit Union.........................237
House value (Gross)..................... 150000
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 153337


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 72000...(468)......1.3
Total secured & HP debts...... 72000..-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
Barclaycard CC.............5243.76..120.00.....0
Sainsbury's CC ..............1107.43 .. 20.00....0
Credit Union......................881.88......47.00....0
Total unsecured debts.......7230.07


Monthly Budget Summary
Total monthly income.................... 1495
Expenses (including HP & secured debts). 1,051.15
Available for debt repayments........... 442.85
Monthly UNsecured debt repayments....... 187
Amount left after debt repayments....... 255.85

Personal Balance Sheet Summary
Total assets (things you own)...........152950
Total HP & Secured debt................. -72000
Total Unsecured debt.................... -
7230.07
Net Assets.............................. 73719.93

So I think that's it. Going to use the diary to keep myself accountable. Support most welcome:T

JayRitchie

What will your SOA look like when you go back to university? How long are you going for?

System

Hi
I'm going for 3 years. I will drop a day a week at work which will reduce my income by a fifth give or take. I do have an opportunity to do overtime but this is sporadic so will pay directly off my debt.
What do you think?

JayRitchie

trickster76 wrote: »

Hi
I'm going for 3 years. I will drop a day a week at work which will reduce my income by a fifth give or take. I do have an opportunity to do overtime but this is sporadic so will pay directly off my debt.
What do you think?

Will you get a maintenance loan for the three years?

What is the situation with your car? Worth £2,500. Is that necessary for life and getting to work or would you manage without?

What will you be studying? Something sustainable with working a 4 day week on top of a degree?

JayRitchie

Oh, sorry - another question - what % are the debts? the SOA say nil - is this correct?

System

I'm doing a 3 year counselling post graduate and masters. After 2 years I can work full time as a therapist and I have no idea of salary then. The loan is 10.9k over three years and will cover costs of course and sundries related to that. Debt is on two credit cards both 0% for another 21 and 24 months. I also have a loan with credit union and I have another 18 months to pay on that. I'm unsure of the rate but I'll check it out.

JayRitchie

trickster76 wrote: »

I'm doing a 3 year counselling post graduate and masters. After 2 years I can work full time as a therapist and I have no idea of salary then. The loan is 10.9k over three years and will cover costs of course and sundries related to that. Debt is on two credit cards both 0% for another 21 and 24 months. I also have a loan with credit union and I have another 18 months to pay on that. I'm unsure of the rate but I'll check it out.

Is the loan a government postgrad loan or a private one? Your budget looks very marginal to me. You need to consider how reliant on the car you are as that could be a real strain.

System

Government post grad. Yes it's going to be tight but I have no other options other than the occasional overtime shifts. Car will have to remain for now but I'll consider selling if need be. Thanks for your responses. Very thought provoking :money:

System

I've also switched gas and electric suppliers as I'm at the end of the last deal. This will reduce my bill from £63pm for both down to £48pm. Also my water is on a meter and prior to my partner moving in this was £17pm and is currently £33pm for both of us so this will decrease accordingly. So that's a saving of £15 on the gas/electric bill and water bill should halve. I'm also paying a health insurance premium of £21 per month so that will go in September as I was in annual agreement with them. I did get dental and optical benefits but they don't warrant the premium I pay. Back to NHS dentist for me. You see..... living beyond my means

MovingForwards

Could you do compacted hours at work, so five days of work over four days? It would mean you still get your full salary.

JayRitchie

trickster76 wrote: »

Government post grad. Yes it's going to be tight but I have no other options other than the occasional overtime shifts. Car will have to remain for now but I'll consider selling if need be. Thanks for your responses. Very thought provoking :money:

Thats ok then - by my quick calculations you don't earn much over the repayment level at the moment so are not taking any particular risk by using the government loan.

As another quick calculation my guess is that if you go from 5 days to 4 you lose about £240/ month of income - roughly your current surplus.

Your budget looks very tight, even accepting that you have £800 ish of emergency funds to pay for breakages etc. No money for entertainment? Only £120 a month for food - is this sustainable over several years where you are busy balancing work and study?

The car is an interesting one. You only pay £60/month for fuel but have £60/ month insurance costs for a car worth £2,500? That seems a lot. My fear is that if you are reliant on a car you might find that you need to replace the one you have or pay far more for repairs than you have budgeted. This is an important thing to check/ consider.

No clothes budget - no sustainable over several years. On the other hand £600 for presents seems a lot for someone who is broke unless its for grandchildren.

Your debts are a really annoying size! The credit union one will clear itself in time but £6,300 of credit card debt is only reducing at £140 a month. Even if you can get new zero interest deals this will take about 4 years to clear. Far tougher if you can't get new interest free deals.

I think you need to consider whether - for you - the budget is sustainable over a five year period. The car is a particular problem as you might need to replace or run up significant bills. If it is just a nice to have you could clear a lot of problems by getting rid of it.