SOA Advice

sosta

Hi

I have read these threads for a while, so wondered if I could join and get advice? I would like to organise our finances to try and pay debts off as quick as possible, save a little at the same time, and also be a bit more prepared on upcoming expenses, rather than feeling like we are planning month to month?

I have done a SOA best I can - we have switched banks so I haven't got spending history/statements, and we only got DH's car late last year and mine in Jan, so I have estimated the expenses at 800 per year for both? We have just paid 604 on his for an MOT and belts? I haven't got an idea for entertainment - have just put down disney plus/amazon prime we currently using - and gifts at £1k at year - spent about £450 -500 on gifts for xmas just gone?

 I have started paying a lot of bills annually, but may have done this a bit topsy turvy - as I find on some months I have paid for the annual bills due - I try to allocate the amount left after to adhoc MBNA overpayment/savings/ predicted expenses that month - but then we spend up and/or have small overspend from previous month we have put on to another CC we have that needs paying (which is always paid off so no interest) so then I don't put a monthly amount away to cover the annual bills?! or save anything for clothes or entertainment as I said above. I have started a spending diary.

The big annual things coming up for the rest of the year are; Aug - my car insurance (250?) + MOT and Tyres = 390? Sept - DH car service - ?? Oct - dog vaccine - 44.50, then Xmas?

I have a cash sum at the minute due to a recent bonus and savings made in lockdown due to not paying for childcare/lessons etc. so where do I plan from now?! If I add up all the expenses annually, I think these come to £5696.70 = £474.25 a month - nearly the amount we should have free after everything comes out? I need to work out where this going from spending diary and saving bank statements so we can ideally have this saved?

The 3 debts - loan for DHs car/other bits is until June 2022. 2 MBNA cards were to pay for my car using money transfers. We picked 3.9% apr for 18 months and 0% fee, as this worked out cheaper than the 0% apr, 4% fee as long as we pay them off by Xmas?

Do I use the cash saved towards the annual expenses, and next years? over pay debts? mark some as an emergency fund? Any help welcome.

Thanks for reading

Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

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

Number of children in household......... 1

Number of cars owned.................... 2[b] both cars needed pre-lockdown due to working hours/childcare

Monthly Income Details[/b]

Monthly income after tax................ 1299.93

Partners monthly income after tax....... 1586.93

Benefits................................ 84.2

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

Total monthly income.................... 2971.06[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 590

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

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

Management charge (leasehold property).. 1.13 (£13.50 paid by cheque once a year)
Council tax............................. 140 (12 months)

Electricity............................. 90 (gas&elec)

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

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

Water rates............................. 35.13

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

Mobile phone............................ 12

TV Licence.............................. 12.88

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

Internet Services....................... 19.95

Groceries & Petrol ......................... 420

Clothing................................ 25

Road tax................................ 12.5

Car Insurance........................... 50

Car maintenance (including MOT)......... 66.66

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

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

Childcare/nursery....................... 68

Other child related expenses............ 26

Medical (prescriptions, dentist etc).... 20.7

Pet insurance/vet bills................. 35

Buildings insurance..................... 14

Contents insurance...................... 0

Life assurance ......................... 80.57

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

Presents (birthday, christmas etc)...... 90

Haircuts................................ 0 (started cutting own hair)

Entertainment........................... 12.49

Holiday................................. 166.66

Emergency fund.......................... 0[b]

Total monthly expenses.................. 1988.67[/b]

[b]

Assets[/b]

Cash.................................... 2416.25

House value (Gross)..................... 177000

Shares and bonds........................ 315

Car(s).................................. 9000 

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

Total Assets............................ 188731.25[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 126734...(590)......1.93[b]

Total secured & HP debts...... 126734....-.........-   [/b]

[b]Unsecured Debts[/b]

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

yb loan........................9932.71...418.4.....4.9

mbna........................2000......30........3.9 

mbna...........................2000......30........3.9

Total unsecured debts..........13932.71..478.4.....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,971.06

Expenses (including HP & secured debts). 1,988.67

Available for debt repayments........... 982.39

Monthly UNsecured debt repayments....... 478.4[b]

Amount left after debt repayments....... 503.99[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 188,731.25

Total HP & Secured debt................. -126,734

Total Unsecured debt.................... -13,932.71[b]

Net Assets.............................. 48,064.54[/b]

theoretica

Are you sure you can't access your old bank statements any more?  That would really help give you better information about your spending.  From your SOA you look like you could be in a very good position, just knowing a bit more about your spending, being organised to always have money for your big one off spends and making sure you don't let money not in your budget get spent. 

Life assurance looks like it might be high, have you shopped around for the best deal?  Entertainment is low - family days out?  Icecream?

ryanm8655

Was going to sag the same as above, is that life assurance figure monthly? Likewise entertainment is virtually non-existent. Makes sense at the moment but is it realistic? Do you not go out for dinner etc?

I see you’ve combined groceries and fuel, what’s the split like on those? Presumably you’re saving fuel at the moment so is that reflective of lockdown or beforehand? Is maintenance for 2 cars? The £600 bill for belts is presumably a cambelt/waterpump change. That’s generally only needed at most every 40k miles (usually more like 60-80k miles depending on the car) so shouldn’t need to fork that out every year.

Presumably the MBNA cards are promotional rates, when do they end?

My advice would be to take advantage of lockdown and hit the debt hard while you can. Depending on when the promotional offers end I’d probably take out one credit card at a time initially. If the £500 is genuinely spare then set one of the DDs to £500/month and then overpay any left overs (other than savings for the annual expenses - recommend setting up pots for these on either Monzo or Starling) at the end of the month while we’re in lockdown.

Once the cards are tackled I’d then overpay the loan.

I’d be tempted to use some of the £2.5k savings towards debt too but that does make a nice emergency fund.

sosta

theoretica said:

Are you sure you can't access your old bank statements any more?  That would really help give you better information about your spending.  From your SOA you look like you could be in a very good position, just knowing a bit more about your spending, being organised to always have money for your big one off spends and making sure you don't let money not in your budget get spent. 

Life assurance looks like it might be high, have you shopped around for the best deal?  Entertainment is low - family days out?  Icecream?

Thankyou for replying - I think when I closed the account I should have got an encrypted email with my account history in, but not appeared? I will have to contact them, then I can get an idea of what we have actually spent on entertainment etc.- maybe 160 at highest?

I have already looked at life assurance and cut it down from 90+!! This is 2 policies, one covers mortgage on death or critical illness - if i get a new quote it comes out at more! and another is a lump sum - 50k for me and 200 or 300k for DH? He gets annoyed if I try to change these too much, as our IFA set them up, and he doesnt want me to be in financial difficulty if anything happens!

sosta

ryanm8655 said:

Was going to sag the same as above, is that life assurance figure monthly? Likewise entertainment is virtually non-existent. Makes sense at the moment but is it realistic? Do you not go out for dinner etc?

I see you’ve combined groceries and fuel, what’s the split like on those? Presumably you’re saving fuel at the moment so is that reflective of lockdown or beforehand? Is maintenance for 2 cars? The £600 bill for belts is presumably a cambelt/waterpump change. That’s generally only needed at most every 40k miles (usually more like 60-80k miles depending on the car) so shouldn’t need to fork that out every year.

Presumably the MBNA cards are promotional rates, when do they end?

My advice would be to take advantage of lockdown and hit the debt hard while you can. Depending on when the promotional offers end I’d probably take out one credit card at a time initially. If the £500 is genuinely spare then set one of the DDs to £500/month and then overpay any left overs (other than savings for the annual expenses - recommend setting up pots for these on either Monzo or Starling) at the end of the month while we’re in lockdown.

Once the cards are tackled I’d then overpay the loan.

I’d be tempted to use some of the £2.5k savings towards debt too but that does make a nice emergency fund.

Thank you for replying - 
I have already looked at life assurance and cut it down from 90+!! This is 2 policies, one covers mortgage on death or critical illness - if i get a new quote it comes out at more! and another is a lump sum - 50k for me and 200 or 300k for DH? He gets annoyed if I try to change these too much, as our IFA set them up, and he doesnt want me to be in financial difficulty if anything happens! 

 I will try and get my old statements to calculate entertaiment normally, as above as what we are spending at the minute - maybe 160 extra at an estimate? 

Food/petrol is reflective of before lockdown - february was split as 100 fuel, rest groceries? maintenance is for 2 cars - we managed to pay the 600 bill from lockdown savings on fuel/food etc 

MBNA deal at 3.9% is for 36 months 

I'm thinking save 2k as emergency cash, which is about a month of bills of food, put the rest as a pot for the annual bills coming out for the rest of the year, then whatever we have left at the end of the month then overpay the MBNA.

enthusiasticsaver

The only thing on the soa I would query is the holiday.  Are you taking one this year in view of the travel situation?  We have just rebooked the two we had planned and rearranged them for 2021. 
On the face of it your finances do not look bad if the debt was taken out for cars rather than general overspending and the rates, although not 0% are relatively low.  I would still overpay the MBNA initially then the loan though to get rid of them asap as undoubtedly the rates you are paying are much higher than anything you would get on savings.  You need to keep some emergency money though.  
My plan would be £1000 in emergency savings, unless one of you thinks there is a risk of redundancy in which case keep it all in savings. Whilst I understand keeping £2000 as a months worth of bills and foods is sensible most people would advise paying off debt first and just keeping a basic £1k as emergency money.  Once the debt is gone then build up 6 months of expenses. 
If your income is relatively secure I would keep £1000 of the £2416 in emergency savings and pay £1200 off one of the MBNA  cards.  Going forward I would start a savings account for xmas, your dog  and your cars and maybe save around £100 a month for the cars given you have car insurance to pay for in August.  I would then overpay the smaller MBNA card by £100 per month until that was gone then direct the £130 to the other MBNA card maybe more if you can.  That should pay it off within the deal period and if it was 0% I would say there is no rush but given you are paying interest of around £150 per year I would get rid of it asap.  

sosta

enthusiasticsaver said:

The only thing on the soa I would query is the holiday.  Are you taking one this year in view of the travel situation?  We have just rebooked the two we had planned and rearranged them for 2021. 
On the face of it your finances do not look bad if the debt was taken out for cars rather than general overspending and the rates, although not 0% are relatively low.  I would still overpay the MBNA initially then the loan though to get rid of them asap as undoubtedly the rates you are paying are much higher than anything you would get on savings.  You need to keep some emergency money though.  
My plan would be £1000 in emergency savings, unless one of you thinks there is a risk of redundancy in which case keep it all in savings. Whilst I understand keeping £2000 as a months worth of bills and foods is sensible most people would advise paying off debt first and just keeping a basic £1k as emergency money.  Once the debt is gone then build up 6 months of expenses. 
If your income is relatively secure I would keep £1000 of the £2416 in emergency savings and pay £1200 off one of the MBNA  cards.  Going forward I would start a savings account for xmas, your dog  and your cars and maybe save around £100 a month for the cars given you have car insurance to pay for in August.  I would then overpay the smaller MBNA card by £100 per month until that was gone then direct the £130 to the other MBNA card maybe more if you can.  That should pay it off within the deal period and if it was 0% I would say there is no rush but given you are paying interest of around £150 per year I would get rid of it asap.  

Thanks very much for responding - 
We are due to be on holiday right now - I had divided the total cost into the monthly amount above. Luckily we have had this refunded - some went in to the cash lump sum, some went on the garden recently to make it nice for summer, as we aren't planning on trying to take another one this year! 
Glad you think they don't look bad! and yes i thought clear MBNA then loan.
I'm not sure how secure jobs will be to be honest, we both have been fairly lucky up to now, but who knows? im quite nervous about it, which has made me err on the side of caution to keep a higher amount of saving? I'll have a think.
Thanks for the good advice about the savings accounts and overpayments for the MBNA, i'll re-jig my SOA with these amounts in and see what it looks like .