Help please! SOA Included

Iwantanewlife

Hey Everyone!
I hope you are all well in this sunshine we are having!

Before i get down to business, i firstly just wanted to say a massive thank you to all of the contributors to this forum - especially the regulars, your help has been absolutely astounding to others and with such, gave me the initial knowledge and confidence to tackle my issue head on, and turn my life around.

Background and info about my life:

I am a single mum, in my early thirties. I work full time and live in London. I have always been silly with money, can even remember it when i was younger wasting money out of my piggy bank/spending it as soon as i was given it etc. I am ashamed to say, I do not think I have ever saved up for anything. I get it, deal with the consequences later. That has meant, I have never learnt the value of things. I have paid ridiculous interest rates, and most importantly to me left myself in a really weak financial situation. If i was to lose my job tomorrow, everything is finished.

So, enough is enough.

I made a budget cutting back everything. I have closed all subscriptions, and taken down all my TV, phone and internet bills ( im contracted in all). I have also set up a bank account and separated each heading off my budget into 'pots' so am always 100% clear on what i have left in my budget as i go through the month.

My question is this.......The debts I have are on high interest arrangements. I feel confident in the budget side, but i am unsure how and in what order i should tackle the debt. Could somebody please assist me in working out the quickest route to my new debt free life?

SOA - New Budget, and what i am living to now.

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2604.17
Partners monthly income after tax....... 0
Benefits................................ 82.8
Other income............................ 0
Total monthly income.................... 2686.97

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1000 (London)
Management charge (leasehold property).. 0
Council tax............................. 114 (moved to over 12 months)
Electricity............................. 35
Gas..................................... 35
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 45 (just cut this, contracted till may 2020)
TV Licence.............................. 12.5
Satellite/Cable TV...................... 28 (as above)
Internet Services....................... 24 (as above)
Groceries etc. ......................... 200 (sticking to this well with meal planning!)
Clothing................................ 40
Petrol/diesel........................... 120 (company car for private use, no other costs bar tax)
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 280
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 14
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 12.5
Entertainment........................... 50
Holiday................................. 20
Emergency fund.......................... 50
Total monthly expenses.................. 2295


Assets
Cash.................................... 50 (only just started this, this month)
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 50

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
CC 1...........................1373.19...42.71.....38
CC2............................442.7.....15.66.....38
PayPal Credit..................218.76....8.........0 (not sure)
Loan...........................1345.47...90........NaN 89%!!!(ridiculous i know, and is currect)
CC 3...........................188.2.....50........38
Total unsecured debts..........3568.32...206.37....-


Monthly Budget Summary
Total monthly income.................... 2,686.97
Expenses (including HP & secured debts). 2,295
Available for debt repayments........... 391.97
Monthly Unsecured debt repayments....... 206.37
Amount left after debt repayments....... 185.6

Personal Balance Sheet Summary
Total assets (things you own)........... 50
Total HP & Secured debt................. -0
Total Unsecured debt.................... -3,568.32
Net Assets.............................. -3,518.32

Silver_Queen

Your APRs are enormous but your debt level is relatively low. Is there a penalty for early repayment on the loan?

What is your credit record like? Do you have anything in your past that's resulted in such high APRs? Can you potentially transfer your debt onto a lower interest rate?

chelseablue

Does your income include child maintenance from your child's father?

Willing2Learn

Just wanted to say well done on starting up an Emergency Fund category. People often miss this out, but is it a vital component of all successful budgets.

On the loan, is your APR 89%, as it showing as a NaN error?

You really need to start snowballing those debts. There are two differing snowball methods.

• Method #1 is to focus your payments on debts according to their size. Starting with the smallest debt first and then moving onto the next smallest. This is the Dave Ramsey method.
• Method #2 is to focus on the debts according to their APR. Starting with the highest APR first and then moving on to the next highest APR. This is the MSE method as it saves the most money.

Your SOA suggests that you have £185 'spare' every month after expenses and contractual debt repayments. Have you really got this money left over? Or do you have money leaking out from your budget each month? You may want to start a spending diary to track where this money is going.

Iwantanewlife

Thank you for your reply! Yes APR’s are huge due to poor credit rating in the past! No option to transfer balance unfortunately

Iwantanewlife

No income from his father, he is no longer around

Iwantanewlife

Hi! Thank you for your response. This money is now spare, as I am sticking to this new budget, so I’m really just wondering how much of this to throw at what debt first as balance transfer etc is not an option for me!

Iwantanewlife

And sorry just to confirm, yes that is an 89% APR loan :eek:

Willing2Learn

Iwantanewlife wrote: »

This money is now spare, as I am sticking to this new budget, so I’m really just wondering how much of this to throw at what debt first as balance transfer etc is not an option for me!

If it were me, I would use the 'spare' £185 to clear CC3 and then your PayPal credit as that will release an additional £58 into your budget. (£185+£58=£243/month).

I would then plough every possible penny toward that ghastly loan whilst maintaining minimum payments to your other creditors. This would mean you would be initially snowballing using the Dave Ramsey method and then switching over to the MSE method.

Iwantanewlife

Thank you! That is exactly what I was thinking - thank you so much for your help.

Honestly this forum has been an absolute god send! I now have a budget, cost spreadsheet, emergency fund (pending) - even with that awful loan, I feel so in control to sort it out and start saving!

JayRitchie

Hi

How does the company car work? Do you need to have it? £120 seems a large amount for private fuel living in London.