Here we go!

Newbie_2020

Hello everyone,

I’ve been lurking on here for quite a few months now and have finally built up the courage to start my own diary. I’m married to DH and we have 3 boys DS1, DS2 and DS3. My husband is incredibly generous and a natural spender, whereas I enjoy saving. We are in a large amount of debt, but determined to pay it all off! We have a large loan (£15,544) this is mostly from our wedding and nursery fees (these had to be paid a whole term at a time and we never had the £2000plus saved in advance). We also have a credit card (£9300) that we did a money transfer of 10k to pay back family who helped us to purchase our home. 

I recently changed jobs because the childcare costs were going to put us in financial difficulty. I’m now doing night work which means we have no nursery fees at all and I can budget more efficiently for annual spends etc. 

I’d love some advice on our SOA. I wish I’d started coming on here years ago! Thanks in advance  

Household Information[/b]

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

Number of children in household......... 3

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

Monthly Income Details[/b]

Monthly income after tax................ 900

Partners monthly income after tax....... 2500 (due a pay rise soon)

Benefits................................ 195.8

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

Total monthly income.................... 3595.8[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 923

Secured/HP loan repayments.............. 435

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

Management charge (leasehold property).. 30

Council tax............................. 188

Electricity............................. 65

Gas..................................... 80

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

Water rates............................. 46

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

Mobile phone............................ 41

TV Licence.............................. 13.37

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

Internet Services....................... 30.37

Groceries etc. ......................... 350

Clothing................................ 50

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

Road tax................................ 25.36

Car Insurance........................... 40

Car maintenance (including MOT)......... 45

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

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

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

Other child related expenses............ 86

Medical (prescriptions, dentist etc).... 0

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

Buildings insurance..................... 9.86

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

Life assurance ......................... 22.2

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

Presents (birthday, christmas etc)...... 95

Haircuts................................ 10

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

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

Emergency fund.......................... 0

Charity................................. 2

School uniform.......................... 25

Savings for sons ....................... 100

Husband’s football...................... 20[b]

Total monthly expenses.................. 3132.16[/b]

[b]

Assets[/b]

Cash.................................... 5000

House value (Gross)..................... 380000

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

Car(s).................................. 0

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

Total Assets............................ 385000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 266246...(923)......2.25

Hire Purchase (HP) debt ...... 13569....(257)......0< (Car 1)

Help to Buy Equity Lo..........71400....(0)........0< 

PCP Car 2......................10459....(178)......0[b]

Total secured & HP debts...... 361674....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Clydesdale Loan................15544.....287.......0

Virgin Credit Card.............9300......100.......0[b]

Total unsecured debts..........24844.....387.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,595.8

Expenses (including HP & secured debts). 3,132.16

Available for debt repayments........... 463.64

Monthly UNsecured debt repayments....... 387[b]

Amount left after debt repayments....... 76.64[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 385,000

Total HP & Secured debt................. -361,674

Total Unsecured debt.................... -24,844[b]

Net Assets.............................. -1,518[/b]

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

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

LottyWatty

Hi!
Well done on posting and taking the first steps. 

It sounds like the change to your employment will really help your finances. Not sure if you’ve just changed shifts or are new to shift work but working nights can be draining and I used to find when I was on nights there was more temptation to spend money on unnecessary things - coffees, treats, etc, to get me through. I cut it out through simple things just like taking a flask of coffee and enough food for the shift - a mixture of healthier things like nuts and also a kit kit or something similar - rather than being unrealistic and telling myself I won’t have anything then end up buying something instead. 

Could you look at gas and electricity deals? It seems quite high at the moment. 

Do you watch live tv or iplayer? If not then you don’t need a tv licence. We watch everything through Netflix and catch up -  itv hub etc. The only thing we can’t watch is iplayer. We went through a declaration with tv licensing.

Is there any way to reduce your mobile phone bills or are you still tied into a contract? Next time the contract is up, keep your current handset and look for a cheap sim only deal. We’ve just found one with virgin and it’s £8 for 8gb and unlimited calls and text. I was previously paying up to about £40 a month just for me  in previous years!

What does your entertainment budget include? To be fair, it doesn’t seem like loads but there could be some ways you could make savings with cheaper alternatives, use of vouchers/offers etc. 

Groceries - depends what you currently use this amount for, but batch cooking/meal planning to reduce waste always helps if you’re not doing this already. Also look at cheaper supermarkets or getting supermarket value brands, again if not already doing this. 

Just suggestions and may not be fully applicable to your circumstances but hopefully of some help. 

Good luck with your debt free journey 

LottyWatty

There’s also an American blogger called Lydia Senn who paid off about $35000 of debt through frugal living - I found her videos on YouTube, frugal debt free life, really helpful and inspirational. A lot is centred around activities she does with her kids, meal planning, household management etc. 

RelievedSheff

Well done on starting your diary.

Do you have any specific plan for paying down the debt. We have found having a plan really useful in giving us small goals to aim for. 

ZaSa1418

Well done on starting your journey. 
Definitely look at switching the Gas & Electric, use the tool on citizens advice as i think you should be able to save quite a lot with a switch. 

enthusiasticsaver

It is not the worst soa I have seen and on the positive side you have a decent emergency fund (£5000) and a surplus, albeit a small one.  You also know what the original loan is for rather than debt consolidation but it looks like you have overstretched buying the house, paying for a wedding, two relatively expensive cars on credit and childcare costs.  I think it is sortable though with some financial discipline.

Your biggest issue is the two cars which are both on HP/PCP and £845 each month is going on paying for these and maintaining them etc.  If you are doing night work do you need both cars? What is the situation with the Help to Buy equity loan.  When do you have to start paying that back? Not helpful now but borrowing the deposit from a family member would have been against the terms of your mortgage. 

If the soa is correct and you can live within that budget the only thing I would say is that getting rid of the debt before saving for your sons is more sensible at least until you have more disposable income. Assuming you can keep that credit card at 0% interest it will take you almost 8 years to clear the credit card whereas if you directed the £100 savings for your sons it would halve that term. Alternatively use some of that cash to pay the card down and just keep a basic £1k emergency fund.  No point in keeping savings when you have debt. 

Newbie_2020

Thank you all so much - loads of things to think about/sort out already!
@LottyWatty Loads to consider there, thank you so much for taking the time to help. Luckily I've landed a really convenient job for now - sleeping nights caring for a lovely lady. My husband watches iplayer sometimes but it does seem like a lot of money for our use - I'll discuss this with him, thank you. Husband is SIM only, but I definitely need to finish my contract and keep the phone this time! £100 entertainment budget is basically what I leave in my husbands account for him to do as he wishes, which is usually buy us a takeaway or occasionally dinner with a friend. I'll definitely be checking out Lydia Senn  

@RelievedSheff I have no plan besides chucking every spare pound and penny at it. That's great advice about aiming for smaller goals along the way! The number just seems impossible atm. Thank you

@ZaSa1418 Thank you for reading through SOA Gas and electric definitely need addressing. Every time I tried to enter readings into app it didn't work so instead of sorting it out I've just been paying what we were using in old property. This has given me the kick up the bottom to sort it out  

@enthusiasticsaver Yes we've definitely overstretched ourselves! I'm kicking myself about the cars. I knew they were a mistake when we got them and there was a lot of arguing involved. We can't go down to one car atm but I'd love to at some point. We've got another 4 years before interest begins on the HTB loan. We had a lot of issues selling our previous property and eventually it sold for less than anticipated. The family member kindly gifted us the money to help it all go through. I know you're right about our sons savings... I will seriously consider this. The other savings just help me to feel a little in control. The plan is to use this to pay off the debt if/when it is no longer 0%. 

Thank you again everyone