Time to Knuckle Down

lostmyusername

Here's my SOA as promised. Feel like I'm haemorrhaging money, this is pretty scary. I've got my diary out and will sit down and mark each direct debit so I feel a bit more in control. I'm feeling very anxious lately, probably because the sheer amount of change.

A few notes:

1. Rent, service charge and mortgage is paid up until May, so I have a little bit of wiggle room now.
2. The utilities are estimates given to me by the companies. I only moved in at the weekend! The property is a new build with an emphasis on eco-friendliness and energy saving, so should be really cheap utilities. 
3.  As above, the car is a tentative trial at the moment. Boyfriend is keen to keep and I'm keen to be rid. 
4. The property purchase cost loads more than expected. It's shared ownership so I pay rent and mortgage. I own a 40% share. Service charge is expensive but it's a very, very safe development in a less-safe area, and I get a lot for it (window cleaning, 24 hour security, landscaped gardens, free handiman services etc). I can't change the amount I pay for this, anyway. I also did a market value stamp duty election, because I'm not sure if I'm going to staircase to 100%. If I didn't pay stamp duty now and then wanted to staircase, I'd have to pay close to £7,000 in the future (no first time buyer relief) so I decided it would be better to cough up now. 
5. 0% card was run up because the more expensive property purchase meant that my moving funds were eaten up. The £1k was for man with van hire, some furniture, car insurance and other bits and pieces. It's on 0% for another year so I'm not too worried, but will be paying it off monthly. Focus is to build up that EF first. 

[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......... 0

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 2438.42

Partners monthly income after tax....... 1600

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 4038.42[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 335

Secured/HP loan repayments.............. 0

Rent.................................... 454

Management charge (leasehold property).. 126

Council tax............................. 86

Electricity............................. 25

Gas..................................... 0

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

Water rates............................. 20

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

Mobile phone............................ 90

TV Licence.............................. 0

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

Internet Services....................... 22

Groceries etc. ......................... 200

Clothing................................ 5

Petrol/diesel........................... 60

Road tax................................ 14

Car Insurance........................... 62.55

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

Car parking............................. 70

Other travel............................ 300

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 10

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

Buildings insurance..................... 0

Contents insurance...................... 8.79

Life assurance ......................... 14.96

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

Presents (birthday, christmas etc)...... 50

Haircuts................................ 5

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

Holiday................................. 100

Emergency fund.......................... 200

(Unnamed monthly expense)............... 0

Long Term Savings....................... 100

Gym/Hobby............................... 75

Boyfriend's personal.................... 200

My personal............................. 200[b]

Total monthly expenses.................. 2983.3[/b]

[b]

Assets[/b]

Cash.................................... 3400

House value (Gross)..................... 135000

Shares and bonds........................ 0

Car(s).................................. 150

Other assets............................ 0[b]

Total Assets............................ 138550[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 105600...(335)......2.07[b]

Total secured & HP debts...... 105600....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Family.........................32000.....700.......0

0% Interest Card...............1021......6.55......0[b]

Total unsecured debts..........33021.....706.55....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 4,038.42

Expenses (including HP & secured debts). 2,983.3

Available for debt repayments........... 1,055.12

Monthly UNsecured debt repayments....... 706.55[b]

Amount left after debt repayments....... 348.57[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 138,550

Total HP & Secured debt................. -105,600

Total Unsecured debt.................... -33,021[b]

Net Assets.............................. -71[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

MidsHollie

Hi there, 
I have just found your diary. I have a very similar debt picture to you, although no partner to share living costs with!! Well done on doing your SOA. It can be really eye opening. I would also recommend a spending diary. It will help you focus on your targets rather than the here and now. One comment about your SOA. You have said that you and your partner both have £200 of personal spends. I don't like the idea of a personal spends category because I see it as a bit of a cheat. It also is 10% of your income that you have no idea where its going each month. Which seems a lot to me. I normally try to budget about £50 for eating out / drinking out each month, and £20 for "other". If I want anything else, it has to come from somewhere else (eg groceries or fuel) or I have to  wait. By restricting yourself, you will learn what is important. This isn't ever going to be easy! When you are closer to your debt target and have a good insight in to your spending and your triggers, you could relax this. I know this is quite an extreme view, but I'm making really good progress so it is working!
Good luck on your journey

lostmyusername

MidsHollie said:

Hi there, 
I have just found your diary. I have a very similar debt picture to you, although no partner to share living costs with!! Well done on doing your SOA. It can be really eye opening. I would also recommend a spending diary. It will help you focus on your targets rather than the here and now. One comment about your SOA. You have said that you and your partner both have £200 of personal spends. I don't like the idea of a personal spends category because I see it as a bit of a cheat. It also is 10% of your income that you have no idea where its going each month. Which seems a lot to me. I normally try to budget about £50 for eating out / drinking out each month, and £20 for "other". If I want anything else, it has to come from somewhere else (eg groceries or fuel) or I have to  wait. By restricting yourself, you will learn what is important. This isn't ever going to be easy! When you are closer to your debt target and have a good insight in to your spending and your triggers, you could relax this. I know this is quite an extreme view, but I'm making really good progress so it is working!
Good luck on your journey

Hi, thanks for popping by!

Boyfriend and I are only just starting to combine finances and are pretty used to our own independence and own money. In the future, we might merge everything completely and not keep personal pots, but for now, this is the best way forward for us. 

Boyfriend was in a financially and emotionally abusive relationship with his ex. He was with her for around five years and for two of the years, he wanted to walk away but he never could, because she took all his money. He's understandably not keen on getting himself in a similar situation (although I would never do that to him). For me, I'm used to spending whatever I want because I've always earned enough and not planned properly for the future. I'm working on it by tapering off slowly. 

Potentially, in the future, once we have each built up small personal buffers, we might combine everything entirely. For now, it's not for us. I totally get your point though! 

lostmyusername

Why am I here?

My debt has almost always been "good debt" - I took out a £20k loan for a postgraduate course, which now has me earning more than £40k in my mid 20s. I took out a £100k+ mortgage which has got me somewhere to live. I "borrowed" (re: received a gift that I want to pay back) roughly £27k for my deposit. I have had other, reasonably small debts (£2k overdraft when I left uni which is now paid off, a CC balance of roughly £500 each month that's always paid back in full) so theoretically, I should be fine. I do all the moneymaking stuff, I never let anything go and always do all the bank switches, surveys etc.

My problem is that I spend far, far too much money that I should be saving. I spend like I'm earning double what I do. I never had big bills so I had a lot of discretionary money, easily spending £1k+ each month on things I want, rather than need. It was the shock of my life when we moved house and I saw how much stuff I really have! I have no proper EF to speak of, I have always been "frugal" in terms of accommodation, bills etc, I shop around when travelling....but I have a coffee habit, I always forget to bring lunch and I like to go to restaurants a lot. I buy too many groceries and then stuff them all in the freezer until my freezer's bursting and I just buy more fresh stuff. I go on too many holidays that I can't properly afford. 

On paper, my bills are more than covered by my income. In reality, I can't stick to a budget. I keep trying to wrap my head around YNAB but I honestly just cannot understand it. Is it worth giving it another go? 

Here's to making and actually sticking to a budget! 

Sarahwithlove

Yes go back to YNAB and give it another try, it's worth it if you can get your had around it. The important thing I have found is to remember to use YNAB for seeing what money you have rather than your actual bank accounts. It's helped me reduce my wasteful spending but I still have a long way to go. 

PurpleFairy26

I'm a recent YN@B convert. I tried a couple of years ago and couldn't get on with it or get my head round it so stuck to my trusty spreadsheet. This time it's different though and I'm finding it so useful and definitely worth it. I'd definitely recommend. 

lostmyusername

YNAB sounds great. I'll have another look at it. Think I will start using it from this month's payday onwards. It always seemed a little pointless because I had few bills before, but it's not the same now. Worth giving it another shot! 

Sarahwithlove

But your obviously spending your money somewhere so this will help you to better budget for it and learn to categorise those payments. 

lostmyusername

A few spends today. £7.50 upgrading travel insurance for upcoming holiday so that we're covered in case coronavirus hits. £11.46 first payment for my income protection insurance. £10 on lunch (my last day is tomorrow so my colleague wanted to have lunch with me to say bye). Also set up contents insurance, opted for the higher level of insurance so that we get more cover and the excess is lower - £11.12 per month. Still waiting for news about council tax/rent/bills etc and need to properly work out how the heating and hot water works. We have a communal heating system so it's billed separately, but I have no idea how it works, how much it costs etc. 

Also bought 4 dining chairs and an armchair for £105 - coming out of the furniture fund. 

Tonight, need to book hire car for holiday - will cost about £20 for the whole week. 

I switched electricity companies last week so should get a small bill from the old company in a few weeks. The new electricity company provides green energy, is cheaper and gave me a joining bonus!

Everything is so frantic right now with the house move, holiday and impending new job. March has already been a record busy month! 

lostmyusername

May as well take this opportunity to do a little round-up of account balances:
Debts

1. ~£600 credit card 1. This isn't included in the above SOA because I don't carry the balance, I use it for budgeted spends for the rewards, and pay it off each month.
2. £5.99 credit card 2. Will be paid by automatic direct debit. 
3. £1,021 credit card 3. This is my 0% card and this balance will be carried until next month when I will pay it off come payday. 
4. £32,000 family. 
5. £105,600 mortgage. First payment 01/04/2020, how exciting! 

= £139,226.99 (£33,626.99 unsecured)

Short term funds

1. 300 Euros for our holiday next week.
2. £1,250 in my personal current account, earmarked for my credit card bill. 
3. £51 in my bills account (my phone bill of £34 will come out on the 7th)
4. £967.84 in our joint account consisting of £728 in an emergency fund, £50 in a car maintenance fund, £102.53 in a holiday fund (this is the first to be robbed if we get short).

= £2,268.84 + 300 euros

Medium term funds

1. £200 in my Marcus account.
2. £20 in our newly started marriage fund.
3. £20 in my "lump sum for debt" savings account.

= £240

Ultra long term funds

1.  Employer Pension: £4,000. This was £4,800 before the wonderful stock market crash that's happening right now, but I'm not so bothered because I won't be accessing it for another 40 years. New job offers defined benefit pension (final salary!!) as long as I pay 5% of my gross, so I'm fairly confident I won't starve in my retirement. 
2. SIPP: £125. Pathetic. Was £150 but see above re: stock market. 

=£4,125