First Steps to Solvency

QueenJess

alt80 said:

Not had a bad start to the day, got up with wife and son. Reasonable bed time might have helped lol. Already checked the yolt app forcing myself to now tbf as it’s not great. Caught myself browsing autotrader after checking the app feeling annoyed I can’t buy an AM told wife to take my phone off me and spent a bit of time with son instead. 

Quite a lot of work today so got some emails out. Good to have made a generally better start to the day. Still convinced tackling my issue with spending is mindset.

It is a hard habit to kick, but you are doing brilliantly.  Keep it up

ryanm8655

QueenJess said:

alt80 said:

Not had a bad start to the day, got up with wife and son. Reasonable bed time might have helped lol. Already checked the yolt app forcing myself to now tbf as it’s not great. Caught myself browsing autotrader after checking the app feeling annoyed I can’t buy an AM told wife to take my phone off me and spent a bit of time with son instead. 

Quite a lot of work today so got some emails out. Good to have made a generally better start to the day. Still convinced tackling my issue with spending is mindset.

It is a hard habit to kick, but you are doing brilliantly.  Keep it up

Agreed. In no time you’ll find a habit has formed...it’s amazing how far you’ve come in such a short space of time.

alt80

I am sick of not being able to make ends meet and the stress of it all. Big reminder at work this morning that getting this sorted is important for the sake of me not keep going down the road of remortgaging property wherever possible to get me out of my personal problems  - can’t go into details but let’s just say I’ve yet again seen what happens when BTL goes wrong awful for the landlord awful for the tenants caught up in the mess. 

stymied

Hi @alt80 can I ask what income you used to draw before you had to remortgage? Would this have been sufficient to cover an overseas holiday each year plus beauty treatments if not the shopping habits & 3rd car? Going cold turkey on the holidays doesn’t seem realistic without being able to resume in the medium term plus I assume school trips will get more expensive as DS gets older? It feels so wrong to be asking this when you already have such a healthy income but is there a way in the short - medium term that you’ll be able to increase your income? You mentioned buying another property to turn around but perhaps not keep in your portfolio this time? I wish I had the skills / get up and go to do it!

RelievedSheff

With the way Covid is playing out the OP won't have to worry about holidays, none of us will be going on one!!

Naomim

alt80 said:

[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. 

Hi,

I'm only half way through your diary and think you're doing great so far. I've just got to the SOA you posted.

There are two things that stand out massively for me.  £1,000 a year on presents for your son. This is a huge amount for a young child and as they get older the presents get smaller and more expensive!  I grant you £500 at Christmas could easily be achieved but birthday too? What about the parties he will be going to with presents, and having as he gets older and (hopefully) Covid disappears/decreases? 

And £10pw week pocket money? What is he buying? Didn't you say he was 6?  By giving him these amounts at such a young age, I feel you are encouraging him to follow in your footsteps and spend.  I have a 15 year old and a 10 year old.  The 15 gets £30 a month and the 10 gets £10 a month.  They are encouraged to save for something if they want it and add any birthday/Christmas money they get if it's a big ticket item.  They are both currently saving for the new PS5.  Sometimes I offer to pay half. For example, 10yo has an old iPad. She removed the cover and dropped it so the screen smashed. We have taken it to be fixed at a cost of £60.  I have taken half from her savings, she is aware that breakages cost and things don't just get replaced for free.

Sorry don't mean to rant but there's still a bit of tweaking to do 😁

Naomim

alt80

@stymied The residential portfolio isn't my main income - I have another business also in the property sector.

If the right flip deal came along I could find a deposit from using some of the btl sinking fund - don't really like the idea of using bridging finance at the moment though. I work in property everyday and have no idea what's going to happen in 3/6 months time if there's going to continue to be strong sales demand or if there's even going to be finance availability to remortgage and let it out should the sales demand dwindle. I feel it'd be a really risky time for me to take on more property; its already heavily leveraged without much room to move if required. Perhaps I'm feeling a bit more risk adverse than usual due to my personal circumstances but I want to have a bit more capital before taking on more property.

I didn't used to take any income from the res portfolio; it's only fairly recently I've taken any monthly income from my btls. Before I used to keep all the money from the incoming rent and use it along with the uplift in value after refurbishment to buy more property. At one point I was buying a house every four to six months or so in lower value areas where there's decent tenant demand. I've sold some on because the time/ deal was right, the others I've kept. As my personal finances started to get worse I scaled back and took a small income to help me out personally and still leave some for further growth. I don't need anyone on here to tell me I've impacted upon the growth of the portfolio; I know that. Long story short the financial issues I had personally were spiralling out of all control but at the time I wasn't ready to admit I was the problem and I panicked. Things were a lot worse than they are now, on more than a couple of occasions I paid the mortgage on my home by shuffling money from credit cards around. I've stopped this time around because I saw that coming again, panicked but decided I was the issue this time. I am truly sick of the stress and ashamed of the mess I've got myself into but know I need to move on, work through and build some sustainability into my personal life.

5/6 years ago we did live on £5.5-6k/m (what I see from the other business). Same house, no school, one car on finance c.£600/m I think - the other two were paid for. Aggressively trying to grow the res portfolio. I had some credit card debt then probably about £20/25k in total almost all of it spent on non-essential clothes / tech / gifts for my wife but it was all one off purchases but generally more money left at the end of the month rather than more month left at the end of the money.

Holidays - I think you're right it's not realistic to say 'no more holidays'. Not sure it's the end of the world not going anywhere for the rest of this / next year for the reasons @RelievedSheff pointed out though? It allows me to cut out an area of big spending for a year or so which will hopefully really help.

alt80

@Naomim thanks for the input on the soa. It's work in progress.

Presents are a bit of a cut down from what's been spent in the past. I hadn't considered perhaps less for birthdays though I think someone mentioned so on here. I suppose I'm hoping the £1k total would cover any kids parties and inevitable presents also but no parties for the foreseeable so not getting too worried about that for now.

The £10/w is put into his bank account. I've told him if he saves the money (given him that since birth and planned to revise up to £20/w at 10 and £40/w at 16 until 21), we'll go and buy him his first property when he graduates and I'll fund its refurbishment. Whilst he doesn't really understand now so he doesn't actually get to spend the pocket money when he's older I will give him an informed choice of whether to spend it on games or phones etc or whether to wait for Christmas etc for those things and the opportunity to top it up with doing work for me in the business. Don't want him to struggle to get on the ladder, I had the advantage of 100%LTV he won't get that opportunity but he needs to know if you want anything in life you need to work for it. Ideal world he'll decide he wants to come into my business and he'll become my succession plan but that's up to him. Oh and when he's older if he breaks things he'll do without or pay half - I'm not that much of a soft touch lol.

alt80

22/9/20
Finished work 7.40pm.

1. Yolt everyday: 2/7 🙂
2. Make most of long weekend but not spend more than £100: n/a
3. Activity with son everyday: 2/7; 20min dog run and bedtime story. 
4. October budget: started to set up yesterday will spend another 20/30 mins on it tonight before I do to bed. Hoping the template will then be set and will only need to be duplicated thereafter.
5. 3x workouts, 3x 5km: nothing today too busy with work.
6. Plan weekend in advance: going to stick with a film night one evening 1/2 with son, 1/2 with wife.
7. Switch off work number/ email apart from twice a day to check when off: n/a - mixed feeling about this today half want to and half stressing about doing so.

Mrs_F_2017

Morning @alt80
I commented on one of your other threads and just wanted to say hello here too, you clearly are taking a lot on board and your attitude really has changed compared to your earlier comments, you seem a lot calmer and more focussed on the future. 

Reading you post above, you clearly are a seriously hard worker and have the potential to fix the situation you've got in to and I just want to congratulate you on that.  I know you've take some stick on here but you've built two successful businesses and now you are using your business head in your personal finances I'm sure you'll be able to channel that success to that area too.