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Help needed to break cycle of debt

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13

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  • Bookgal88
    Bookgal88 Posts: 80 Forumite
    Second Anniversary 10 Posts Name Dropper
    I also notice you haven't included your transport to work costs, which I assume will be a few grand a year. 
    Agree with Andyjflet and zx81 - get rid of the pricey gym membership and your various other subscriptions. They're luxuries not necessities. Having an Amazon Prime membership also likely leading to overspending on there. Both your mobile bills are high too. You can get SIM only deals for £10 a month. If you can swap to that kind of set up, you'd be saving £80 a month in a heartbeat. 
    "We're going to need a bigger boat."
  • sourcrates
    sourcrates Posts: 31,447 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    edited 24 February 2020 at 5:52PM
    Deleted_User said:
    .
    The mobiles also look a bit pricey for the odd phone call and a game of Snake*.

    *Other more modern games are available.
    Agreed, mobile bill can be cut, showing ones age there, zx81 although Clive should have clinched it for me.

    Lots to cut from that budget OP, its a typical example of an SOA from a family who don`t know where their money goes, until its all written down.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • TW82
    TW82 Posts: 13 Forumite
    10 Posts First Anniversary
    Thanks all. I'm really motivated to nail this. 
    In my haste (as was pointed out) I forgot to add my commute costs which amount to £124 a week ... doh.. Working through the recommended comprehensive SOA document and will post once that's completed. 
    Thanks again.Such a great community. 

  • TW82
    TW82 Posts: 13 Forumite
    10 Posts First Anniversary
    Hi, everyone, 

    Below is my completed SOA. I don't think there's anymore to add but there could be some mistakes. 

    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 4086.78
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 4086.78[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 1111
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 122
    Electricity............................. 74
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 74
    Telephone (land line)................... 35
    Mobile phone............................ 40
    TV Licence.............................. 13.99
    Satellite/Cable TV...................... 0
    Internet Services....................... 29
    Groceries etc. ......................... 500
    Clothing................................ 80
    Petrol/diesel........................... 60
    Road tax................................ 0
    Car Insurance........................... 55.57
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 450
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 30
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 35
    Contents insurance...................... 0
    Life assurance ......................... 82.02
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 30
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0
    (Unnamed monthly expense)............... 0
    commute ................................ 496
    gym..................................... 180
    spotify................................. 0
    disney.................................. 4.99
    amzon prime............................. 7.99
    netflix................................. 5.99
    car lease............................... 179.52[b]
    Total monthly expenses.................. 3696.07[/b]
    [b]

    Assets[/b]
    ................................... 0
    House value (Gross)..................... 350000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 11.000[b]
    Total Assets............................ 361000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 293.09...(1111).....2.29[b]
    Total secured & HP debts...... 293.09....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Santander......................2500......44........23
    MBNA...........................6958......76.77.....0
    MBNA...........................718.......16.52.....27.93
    TSB overdraft..................2200......10........0
    M&S............................2307......80........27.93
    TSB............................800.......8.4.......0[b]
    Total unsecured debts..........15483.....235.69....-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 4,086.78
    Expenses (including HP & secured debts). 3,696.07
    Available for debt repayments........... 390.71
    Monthly UNsecured debt repayments....... 235.69[b]
    Amount left after debt repayments....... 155.02[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 350,000
    Total HP & Secured debt................. -293.09
    Total Unsecured debt.................... -15,483[b]
    Net Assets.............................. 334,223.91[/b]


  • TW82
    TW82 Posts: 13 Forumite
    10 Posts First Anniversary
    TW82 said:
    Hi, everyone, 

    Below is my completed SOA. I don't think there's anymore to add but there could be some mistakes. 

    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 4086.78
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 4086.78[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 1111
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 122
    Electricity............................. 74
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 74
    Telephone (land line)................... 35
    Mobile phone............................ 40
    TV Licence.............................. 13.99
    Satellite/Cable TV...................... 0
    Internet Services....................... 29
    Groceries etc. ......................... 500
    Clothing................................ 80
    Petrol/diesel........................... 60
    Road tax................................ 0
    Car Insurance........................... 55.57
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 450
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 30
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 35
    Contents insurance...................... 0
    Life assurance ......................... 82.02
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 30
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0
    (Unnamed monthly expense)............... 0
    commute ................................ 496
    gym..................................... 180
    spotify................................. 0
    disney.................................. 4.99
    amzon prime............................. 7.99
    netflix................................. 5.99
    car lease............................... 179.52[b]
    Total monthly expenses.................. 3696.07[/b]
    [b]

    Assets[/b]
    ................................... 0
    House value (Gross)..................... 350000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 11.000[b]
    Total Assets............................ 361000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 293.09...(1111).....2.29[b]
    Total secured & HP debts...... 293.09....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Santander......................2500......44........23
    MBNA...........................6958......76.77.....0
    MBNA...........................718.......16.52.....27.93
    TSB overdraft..................2200......10........0
    M&S............................2307......80........27.93
    TSB............................800.......8.4.......0[b]
    Total unsecured debts..........15483.....235.69....-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 4,086.78
    Expenses (including HP & secured debts). 3,696.07
    Available for debt repayments........... 390.71
    Monthly UNsecured debt repayments....... 235.69[b]
    Amount left after debt repayments....... 155.02[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 350,000
    Total HP & Secured debt................. -293.09
    Total Unsecured debt.................... -15,483[b]
    Net Assets.............................. 334,223.91[/b]


    worth also noting that whilst my wife is starting her business we are using her redundancy pay to add to my salary. We're 'paying' ourselves 800 a month from that and can continue to do so until around September. By which time (april) childcare costs drop to 250 Vs the 400 figure, and her work will be paying more later in the year. 
  • Magsmx5
    Magsmx5 Posts: 19 Forumite
    10 Posts First Anniversary
    I notice that you have not included anything for presents or entertainment  - do your never buy any presents, birthday cards etc, no family days out & nothing for car maintenance or is this including in the lease plan?. Well done for not using your credit cards. 
  • JayRitchie
    JayRitchie Posts: 563 Forumite
    Seventh Anniversary 500 Posts Name Dropper
    The debts are not that huge. If your wife went back to work bringing in £1,000 a month and you cut down a bit on some of the spend categories you could easily pay off the unsecured loans in a year.
  • warby68
    warby68 Posts: 3,134 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    I get the temptation of hiding the debt away in the mortgage and having an easy life (that's what it amounts to - avoiding the need to change what you spend).
    However your debt is not huge, largely at 0% and your budget has plenty of room for savings so you could probably get rid in a year if you put your mind to it. This will embed some good habits as well.
    I suspect you haven't uncovered all your spending yet. Your SoA works and doesn't include £800 from your wife yet this and more is going out - perhaps review your statements and look where ALL the money goes (gifts, weekend activities with children, coffees, lunches and pub trips, cosmetics, treatments, house maintenance, the garden, magazines, gadgets, medical, cinema - to name but a few)
    Consider that your wife is setting up a highly seasonal business - she may be as well getting an additional part time job to cover both the growth phase and the winter months. You will need to be careful that you plan for her earnings being lumpy at best.
    If she is concentrating on a business which will be very physical and you are changing your ways, what about giving the gym up for a year and a few of the subscriptions?
    I wouldn't look at paying interest on this debt for years and years until you've given budgetting and discipline a real go as there looks scope to deal with this quickly and easily with just a bit of those two.
  • TW82
    TW82 Posts: 13 Forumite
    10 Posts First Anniversary
    Magsmx5 said:
    I notice that you have not included anything for presents or entertainment  - do your never buy any presents, birthday cards etc, no family days out & nothing for car maintenance or is this including in the lease plan?. Well done for not using your credit cards. 
    I found it difficult to attribute an amount to presents and entertainment. Yes , these do happen throughout the year but very adhoc. 
    In terms of car maintenance, yes this is all included in the lease. It's a new car so no MOT etc.  
  • Bookgal88
    Bookgal88 Posts: 80 Forumite
    Second Anniversary 10 Posts Name Dropper
    Can i ask - what's the £11,000 of other assets?
    "We're going to need a bigger boat."
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