First Steps to Solvency

alt80

My afternoon / evening I’m going to try to work out what needs cutting out. 

@mark55man I enjoy kicking a ball about and chilling by the sea. Hopefully will be able to get through this and work towards building the relationship with my son that would make things worthwhile I think. 

Wife is already aware. That’s why she’s charging for the nails so she gets some personal spends. She’s no desire to make a real business of it - annoying but it is what it is. 

@getmore4less I’m certainly not proud of it and a lot needs to be cut wife can forget new clothes for the coming year, eyebrows etc. Don’t think we’re going to be going on holiday either - this was an area of massive overspending £11k over the year so just cutting that out is nearly £1k/m. 

@theoretica The work I need doing isn’t typing / admin it requires a degree and professional quals. My secretary is good and whilst wife does help a bit if i ask her to it’s not on a regular basis. She’s set a self-imposed limit of 6 girls for nails. I’m happy it’s boosted her confidence though seeing people will pay for something she can do well. 

I don’t spend hardly any personal money when I buy a house - too busy and get my fix buying the stuff for the house and doing / getting the work done. Not in a position to get another one unfortunately for the moment. 

@annabanana82 I get free English heritage with my bank I think. Will look into it he would like it.

alt80

Just looking at absolute essentials without the ftype or holidays. I should have £1080 spare after paying for the house / Range Rover / BMW / groceries / £100 for one meal out per month / £30 drinks a week / £25 for a coffee as a family once a week and accounting for £500 for son’s birthday and £500 for son’s Christmas, his school, £10/w pocket money etc. So trying to be realistic. No new clothes for wife and I and no new tech.

alt80

[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......... 1

Number of cars owned.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 7750

Partners monthly income after tax....... 0

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

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

Total monthly income.................... 7750[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 1330

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

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

Management charge (leasehold property).. 0

Council tax............................. 230

Electricity............................. 80

Gas..................................... 70

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

Water rates............................. 55

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

Mobile phone............................ 45 (Just wife’s phone mine covered through business)

TV Licence.............................. 13

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

Internet Services....................... 0 (+ landline covered through business)

Groceries etc. ......................... 650 (Inc. £30 drinks / week and £25 coffee in cafes / week which can’t be expensed)

Clothing................................ 65 (Son only)

Petrol/diesel........................... 300 

Road tax................................ 85

Car Insurance........................... 85

Car maintenance (including MOT)......... 85 (2x services)

Car parking............................. 10

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

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

Other child related expenses............ 1200 (School, school trips and £10/w pocket money)

Medical (prescriptions, dentist etc).... 15 (PMI going to be covered through business this is just incidentals)

Pet insurance/vet bills................. 30

Buildings insurance..................... 30

Contents insurance...................... 20

Life assurance ......................... 70

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

Presents (birthday, christmas etc)...... 85 (£1k/y for son only wife and I will have to go without)

Haircuts................................ 65 (Wife will have to forget eyebrows etc.)

Entertainment........................... 250 (Put this in for general bits / days out etc.)

Holiday................................. 0

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

Total monthly expenses.................. 4868[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 600000

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

Car(s).................................. 125000

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

Total Assets............................ 725000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 295000...(1330).....2[b]

Total secured & HP debts...... 295000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Range Rover....................94000.....1220......3.9

BMW............................29000.....440.......4.9

Credit Cards...................40000.....985.......0[b]

Total unsecured debts..........163000....2645......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 7,750

Expenses (including HP & secured debts). 4,868

Available for debt repayments........... 2,882

Monthly UNsecured debt repayments....... 2,645[b]

Amount left after debt repayments....... 237[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 725,000

Total HP & Secured debt................. -295,000

Total Unsecured debt.................... -163,000[b]

Net Assets.............................. 267,000[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

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

Not sure what I’ve done differently here but these are the essentials. Not £1k/m over at all, I basically have £250/m for a holiday after paying the credit cards etc. 

mark55man

good for you putting a SOA up - I did on my first diary and then took it down.  It was less income than yours, but still in the bracket where people expect you to have sorted it out long time ago - and I did find some of the comments a little hostile in a "how can you earn so much and still be skint" letting the side own sort of way - so just a heads up.  The advice though will be invaluable - and many of the topics have already been aired so far. 

alt80

Looking like until I’ve paid for my Range Rover and the credit cards are clear wife and I can’t have anything for ourselves Including a holiday. This doesn’t feel that realistic. With those clear I would need to put the £2k/m away for another Range Rover but have a much bigger deposit at the 10 year point this is with no new fun car to replace the ftype, no new clothes for my wife and I, no presents for each other etc. Not sure I can deal with the no holidays in the long term either. If I put the same deposit for another Range Rover we would be able to start having some holidays / fun in 4 years time when the credit cards clear and just the Range Rover payment left (will end up refinancing the balloon or just getting a new Range Rover).

This just feels depressing and an absolute mountain to climb. Certainly not the lifestyle I’ve been living (wouldn’t be here if I could live within my means lol) and really questioning if I want to do this now. One option could be no new debt so £985/m frees up but I’m not sure juggling 0% deals until the day I die is going to be good for me really. I’m just tempted to ride it out for a bit aim for no new debt and remortgage my house when I can clear the cards and the cars start afresh.

alt80

mark55man said:

good for you putting a SOA up - I did on my first diary and then took it down.  It was less income than yours, but still in the bracket where people expect you to have sorted it out long time ago - and I did find some of the comments a little hostile in a "how can you earn so much and still be skint" letting the side own sort of way - so just a heads up.  The advice though will be invaluable - and many of the topics have already been aired so far. 

Thanks. I put on up in a previous thread but it was based on guessing / lockdown and lockdown was very kind to my finances. 

Bit difficult to see £0 in cash/ savings was sorely to put the value of my resi portfolio in that section and did when i posted the previous soa. Reflecting on it I did it because I was blindly looking for a bit of an ego boost.

QueenJess

I'm sure others more experienced than me will comment on the SOA.  You can't live exactly the same life as before (which you know), but no holiday isn't very realistic.  If you make things too hard then you will fall off the wagon again.

Don't do anything rash.  You are still at the start of the journey for now and it really does need to be small steps.  Stopping the debt getting bigger on a monthly basis is the first step.  Give it time to think through the rest.

Also, do you have anything else you can sell which could pay off a whole credit card or a reasonable portion of debt?  It could then give you a bigger cushion each month.

BlytheDoll

Hey.. I have been following and reading with interest over the past few days, I can really feel your turmoil, and i think you are ready to start tackling the situation head on. Likewise having a business you need to put your business hat on for a while whilst looking at everything. I am sure when you are are in business mode you are squeezing every pound and penny to get that best deal. I am sure you haggled down those BTLs! I often read (in the pension forum on here) people use the term “your future self will thank you” and I often think about this term now, and think this maybe useful to you. Think how your future-self will look back and thank you for dealing with everything NOW, for cutting back and putting that business hat on. 
Blythe x

JCS1

I think the SOA is a good starting point and one to use a a budget for a few months.  Once you settle into the mindset of money saving (and maybe that counselling you have mentioned), you may find you have too much budget in some categories which will then free up money for other things.  For example Groceries and Entertainment, but I also think you do need something here whilst you adjust and clear down your debts.
And the really positive thing about your SOA - debts being paid and you have money left over.

monetxchange

Look you've done the hardest bit now of actually facing up to the hard truth of what you're actually spending, not a best guess hoping for the best. Tbh it's very common on here for the figures to rise massively when the parent with non day to day care for the kids realises just how much the other parent has to spend on the money pit that are kids day to day, so don't beat yourself up about it.

You know you have to make changes and you know what to do, but what I would say is keep remembering to get a balance so it's manageable and not an impossible slog. There's no point saying you'll have no holidays for years or your wife will last indefinitely without wanting eyebrows done etc as you'll all find it too much and give in. You could use the money you'd want to save for another Range Rover on giving yourselves some leeway each month instead.

Could you cut back on the presents budget any more? I can see how £500 could go at Christmas especially as a high earner, but £500 for a 7 year old's birthday is a little excessive. Could he choose a big main gift (eg bike) at Christmas and then birthday being something smaller like games and activities stuff etc? Sounds like he has a big family that care for him so sure he's getting plenty from everyone.

I think I remember you saying that you'd do anything to keep your current Range Rover and then drive it till it falls apart - what's changed in this regard? Is it just the need to have some future spending goal to focus on helps? I hope you have been getting on okay with finding someone to talk to professionally too. In times of stress and relationship issues it's easy to turn back to old habits. I think budget planning has again brought up a little bit of the need to look impressive and spend to fill a gap and that's something that's going to be a constant evolving process to overcome.