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SOA - Any advice gratefully received

edited 30 November -1 at 12:00AM in Debt-Free Wannabe
36 replies 3.6K views
sunflowerladysunflowerlady Forumite
76 posts
Sixth Anniversary 10 Posts Combo Breaker
edited 30 November -1 at 12:00AM in Debt-Free Wannabe
A few people on here suggested I fill an SOA in, so here it is!


We've had credit cards for as long as I can remember, cleared with a loan a couple of times but always gone back to the bad habits of living beyond our means and just putting it on credit.


Bit older, and almost wiser, and we seem to have stopped reaching for the credit card like we used to and have been trying to pay them back but it's all getting a bit overwhelming with all the 0% rate swapping etc. etc.


The CC/Loan debt is pretty much 17 years of living beyond our means at an average of £200.00pm!


*we would like to clear our debts by taking equity out of the house*


I know this is a big no, no for most people but we feel that we are able to close our CC accounts and with the excess we save, start to increase our savings/shares and use that instead of credit!


If we could borrow £40k over 15 years and have it paid off at the same time as the mortgage that would really help us out with other goals - such as saving for POTENTIAL University and Weddings.


We have 24/26 years left at work respectively and DH is looking at a promotion later this year (obvs not guaranteed) and I am currently studying to finalize my qualifications.


And as a final note - DH gets anywhere between £1,500 and £3,000 bonus each year (not included below).


Statement of Affairs and Personal Balance Sheet


Household Information


Number of adults in household........... 2

Number of children in household......... 2 (Under 11)

Number of cars owned.................... 1


Monthly Income Details



Monthly income after tax................ 2567.1

Partners monthly income after tax....... 1909.9

Benefits................................ 137.6 (Child Benefit)

Other income............................ 0

Total monthly income.................... 4614.6



Monthly Expense Details


Mortgage................................ 902 (15 years left and includes monthly overpayment)

Secured/HP loan repayments.............. 275 (Loan to pay CC)

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 139

Electricity............................. 42.5 (Elec & Gas Combined £90pm)

Gas..................................... 42.5 (Elec & Gas Combined £90pm)

Oil..................................... 0

Water rates............................. 39.31 (Water meter)

Telephone (land line)................... 0

Mobile phone............................ 121.64 (inludes 3 x mobiles, no land-line, broadband, spotify, Netflix)

TV Licence.............................. 12.83

Satellite/Cable TV...................... 0

Internet Services....................... 0

Groceries etc. ......................... 400 (includes household items)

Clothing................................ 50

Petrol/diesel........................... 70

Road tax................................ 3.21

Car Insurance........................... 26.23

Car maintenance (including MOT)......... 50

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 40 (after school club)

Other child related expenses............ 100 (Sports Club, Tutor)

Medical (prescriptions, dentist etc).... 8

Pet insurance/vet bills................. 0

Buildings insurance..................... 7.5

Contents insurance...................... 7.5

Life assurance ......................... 70.45 (inc, Critical illness)

Other insurance......................... 0

Presents (birthday, christmas etc)...... 150 (def needs upping)

Haircuts................................ 30

Entertainment........................... 100

Holiday................................. 200

Emergency fund.......................... 100

Bank Fee................................ 15.5

Total monthly expenses.................. 3003.17



Assets


Cash.................................... 2000

House value (Gross)..................... 280000

Shares and bonds........................ 6000

Car(s).................................. 1500

Other assets............................ 3000

Total Assets............................ 292500



Secured & HP Debts


Description....................Debt......Monthly...APR

Mortgage...................... 160000...(902)......0

Secured Debt.................. 2070.7...(275)......0 (ends Jan21)

Total secured & HP debts...... 162070.7..-.........-



Unsecured Debts
Description....................Debt......Monthly...APR

Credit Card....................7621.74...265.......0(overpaying each month)

Credit Card....................2877.96...100.......0
(overpaying each month)

Overdraft.......................500.......0.........0

Overdraft......................1800......0.........0

Store Card.....................1000......90........23.9


Credit Card....................7039.87...250.......0
(overpaying each month)

Credit Card....................10543.9...250.......0
(overpaying each month)

Credit Card....................6059.32...200.......0
(overpaying each month)

Credit Card....................5091.23...150.......0
(overpaying each month)

Total unsecured debts..........42534.02..1305......-




Monthly Budget Summary


Total monthly income.................... 4,614.6

Expenses (including HP & secured debts). 3,003.17

Available for debt repayments........... 1,611.43

Monthly UNsecured debt repayments....... 1,305

Amount left after debt repayments....... 306.43





Personal Balance Sheet Summary

Total assets (things you own)........... 292,500

Total HP & Secured debt................. -162,070.7

Total Unsecured debt.................... -42,534.02

Net Assets.............................. 87,895.28



Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.



Thank you!
Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

Jun 2020 Update: Loan £1,925.63, Credit Cards £37,541.74Overdrafts £1,540.00 Total Debt: £41,007.37 / 1% = £410.07
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Replies

  • EimearFEimearF Forumite
    185 posts
    100 Posts Second Anniversary Name Dropper
    I dont think you should add the debt to your home. As you have said already you have consolidated before and it didnt prevent you racking the debt up again.

    You have high grocery spends and are putting £200 a month for holidays, which you cannot afford at the minute.

    You should switch your overpaying to the store card which you could clear within a months or two and free up money to snowball.

    I think snowballing - either Dave Ramsey or Martin Lewis method is right for you. Focus your overpayments so you see successes and you will stay motivated.

    Good luck. Its a tough journey but you have the means to solve this.
    Light Bulb Moment 13/09/17: Non- Mortgage Debt £42295; 01/04/19: £13645; 01/10/19: £9707; 01/11/19: £5525; 14/01/20: £883
    27/01/20: DEBT FREE!!!
  • Willing2LearnWilling2Learn Forumite
    6.3K posts
    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    If you were to keep your existing budget, you could use your £306.43 monthly budget surplus, to repay all your unsecured debt in 11.5 years. If you factor in unbudgeted bonuses, possible promotion for your DH, and your income increasing once you are fully qualified, then starting a debt snowball rolling could well be a sensible way to pay down those debts, over a reasonable period of time. :)

    There are two differing methods to snowball debts. They are described in the article linked below:
    https://www.thebalance.com/debt-snowball-vs-debt-stacking-453633
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • monetxchangemonetxchange Forumite
    538 posts
    500 Posts First Anniversary Name Dropper Photogenic
    ✭✭
    Don’t put money on to your home. You’ve said it yourself - you’re bad with money and have been overspending to get to this point. How would that change if you suddenly have a lump sum to take the pressure off? I’d guess you’d remain the same. Then you’d be back here in a few years with £20k of credit card debt PLUS an extra £40k on the house. Don’t ever risk your home.

    Learning to spend within your means and tightening your belt for a while really helps to put things into perspective and teaches you how not to repeat the cycle in the future.

    I’m guessing this is an aspirational SOA, or else you wouldn’t be in CC debt. Could you split mobiles, broadband and TV services such as Netflix onto separate lines so we can see if there are savings to be made?

    The presents budget is huge. Times that by 12 - £1800 a year for two small children. That’s around £450 each for birthday and Christmas. A crazy indulgence. Stop buying for adults and buy young relatives token presents only. Ask your friends and relatives with kids if they’d like to all agree to opt out of buying for each other’s kids - I’d bet many would welcome it. At the end of the day, I bet you’re buying toys that get thanked for and mostly left to one side - a waste of everyone’s money.

    Learn how to cook from scratch and batch cook. Your grocery spend could go down at least £100 easily. Cancel your bank fee - packaged accounts are not a priority at the moment. Cancel your holiday money - or reduce it down to get a cheap Sun £9.50 caravan holiday. My friends kids love those, often much more than expensive trips abroad.

    You can do this! Now you’ve taken the hardest step of writing it down and asking for help, the rest is all up. You’ve got a decent surplus, one you could increase, and you could smash the debt down in no time. We’re always here to help, have been there myself :)
    Debt Free: 06/03/2020 Highest Debt: £37,514
  • -taff-taff Forumite
    12.2K posts
    Eighth Anniversary 10,000 Posts Name Dropper Photogenic
    ✭✭✭✭✭
    Use the overpayment on the mortgage to pay the CCs. You definitely do not need to up your presents quota, you need to redue it, to maybe 10 a month..Check your mobile contracts, if they're up, go sim only. You don't need a flashy phone, in fact, unless you actually use it for anything else other than keeping in touch with people and emergencies, you can go down a version or two of whatever you have now.


    Get into the mindset that you need to pay your debt off, not increase it by saving for things that shouldn't be on your list right now until you've got a handle on your debt and how your budget actually works. Presents and holidays are not a necessity until you've done this because while you're thinking about them, then you're thinking, yeah, we can afford it, and you can't.

    As above, snowball your debts for a while, see where you actually are spending money [ have you really got 300 quid left every month?] and rejig your budget accordingly.


    If I've said anything above above that you're thinking, 'no, couldn't do that! I/they deserve...whatever it is' then you are not thinking in terms of debt owed, you're still in the mindset of, I can afford that monthly payment so why not have...whatever it is.
  • edited 14 January at 4:57PM
    sunflowerladysunflowerlady Forumite
    76 posts
    Sixth Anniversary 10 Posts Combo Breaker
    edited 14 January at 4:57PM
    EimearF and Willing2learn......

    Thank you for this. I have just downloaded a snowballing tool which I am going to complete tonight. You're right about holidays, we've committed to a holiday in May this year and would lose more cancelling than going, but after that it's going to be camping only for us for a couple of years. I keep reading about people spending £200pm on food shopping, I really don't know how they manage!
    Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

    Jun 2020 Update: Loan £1,925.63, Credit Cards £37,541.74Overdrafts £1,540.00 Total Debt: £41,007.37 / 1% = £410.07
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • edited 14 January at 4:57PM
    sunflowerladysunflowerlady Forumite
    76 posts
    Sixth Anniversary 10 Posts Combo Breaker
    edited 14 January at 4:57PM
    Monetxchange,


    When you say aspirational do you mean not factual? I have put everything on there! But obviously it hasn't always had the same numbers for the past 17 years, this has been a slow and steady build up of debt, not a few sudden large purchases.


    Mobile phone............................ 121.64 (inludes 3 x mobiles, no land-line, broadband, spotify, Netflix)

    (Breakdown is - Vodafone £85.65 per month - this is my mobile (no landline), Broadband and Spotify. Then 2 x £15pm for DH and DS Mobiles and £6pm for Netflix)


    As for presents, we spend £100 each on the two children at Christmas, I know it is crazy crazy but as a family we buy for all nieces and nephews (gift vouchers since 2019), both of our own parents, my brother who is single, a couple of friends children, the old lady over the road, kids teachers, secret santa, then of course there are the million kids parties during the year plus nieces/nephews, friends kids, our own kids....I could go on but you are probably wanting to shake me as it is........We definitely spend £1800 per year!
    Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

    Jun 2020 Update: Loan £1,925.63, Credit Cards £37,541.74Overdrafts £1,540.00 Total Debt: £41,007.37 / 1% = £410.07
  • sunflowerladysunflowerlady Forumite
    76 posts
    Sixth Anniversary 10 Posts Combo Breaker
    -taff wrote: »


    Get into the mindset that you need to pay your debt off, not increase it by saving for things that shouldn't be on your list right now until you've got a handle on your debt and how your budget actually works. Presents and holidays are not a necessity until you've done this because while you're thinking about them, then you're thinking, yeah, we can afford it, and you can't.

    You're dead right there Taff, I've been having conversations with some friends about a big holiday in 2021 - we can't afford it one bit and I am going to be honest and just tell them
    Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

    Jun 2020 Update: Loan £1,925.63, Credit Cards £37,541.74Overdrafts £1,540.00 Total Debt: £41,007.37 / 1% = £410.07
  • EimearFEimearF Forumite
    185 posts
    100 Posts Second Anniversary Name Dropper
    Sunflowerlady you are in a similar position as i was financially 2.5 years ago (debt level and amount available monthly to service it) and ill be debt free this month.

    You can do this in two years with some focus and 3 with a few falls form the wagon. I know it seems daunting but you can do it.

    Listen to Dave Ramsey's post cast if you need someone to yell at you a little to stay on track lol
    Light Bulb Moment 13/09/17: Non- Mortgage Debt £42295; 01/04/19: £13645; 01/10/19: £9707; 01/11/19: £5525; 14/01/20: £883
    27/01/20: DEBT FREE!!!
  • SusieTSusieT Forumite
    445 posts
    Part of the Furniture 100 Posts
    ✭✭
    With the changes to overdraft changes that are approaching it may be worth targeting them first and then not using them, as they are going to be expensive, and also can be recalled on demand so with savings in some categories and adding in the overpayments they should clear quite fast.
    Other than whats already been said above, presents should be reduced and try looking in £ shops for token sweets or similar for parties, no need to be spending loads on them. If you cut back to just children and tokens rather than spending a lot you can really save a lot there.
    Changing the mobiles (as the contracts end) all to gif gaf will save a lot, free calls to other gif gaf numbers and a lot cheaper plans than you have at the moment.
    Credit card debt - NIL :j
    Home improvement loans 41,000 now 30,130 26% paid original finish dates 2025 and 2027
    Mortgage 100,000 now 64,513 35% paid
  • monetxchangemonetxchange Forumite
    538 posts
    500 Posts First Anniversary Name Dropper Photogenic
    ✭✭
    I wasn’t saying not factual in that you were making it up, just that you may be underestimating as it can’t be the budget you actively stick to as it’s relatively modest - if you had £300+ spare a month you wouldn’t have any debt and much more in cash savings than £2K (plus savings for holidays and emergency fund and Christmas you’re presumably putting aside).

    I’m not surprised you can spend £1800 a year on presents, my point was you shouldn’t be. You aren’t in a financial position to until you clear your debts.

    I’d seriously suggest cutting out some of the adults you buy for (via mutual opting out as described above). I’m sure a lot of friends and family would welcome it. Friends kids will get loads from family - you don’t need to add to it.

    Any absolutely necessary buys: kids parties - by a token gift: goodie bag made up of Poundland sweets/toys. Split packs to make several gifts. Look for deals for cheap gifts for older relatives/neighbours - 2 for 1 sets, make a jam, get the kids to craft something.

    I know many teachers and the majority of gifts get given away - they get hundreds of chocolates and “best teacher” mugs that they simply can’t get through them. Just get the kids to make a card. Secret Santa is inevitably tat - Poundland it is from future! :D
    Debt Free: 06/03/2020 Highest Debt: £37,514
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