Feels like im going under!

Andyjflet

How much for shopping, haircuts, dentist, school clubs, coffee, subs for clubs etc, you need to do a zero budget and count every pound or you will never know where your money is going. 

NiteEyez1980

Hi andy

Pufs me in the minus figures

I'm still working it up. 

Clubs 60pm
No allowance for anything else

madaboutspots

Hi

i don’t wish to sound critical but it looks as though some of the issue is you’re unsure what you’re spending and how much you’ve actually got.

You’ve mention around £950 for the mortgage but then later said it’s £1,094. This is quite a difference. 

You’ve also given a “draft” SOA which doesn’t look to add up and doesn’t seem to include everything you could reasonably expect over a year’s living expenses. The draft seems to leave a shortfall of over £300 but you have suggested it leaves about £300 for the family. Do you mean groceries perhaps?

I honestly think you need to apply a complete attitude shift from where you are to being in a place where you know exactly what you have and why you need.

Is there a possibility that as you earn well you have tended not to “worry” (ie: think) much/at all about the bills? I would suggest learning where every penny goes is the right approach to being able to track spending, live within your means and not risk putting yourselves at risk in the future.

I would think it really is the same plan for paying down the debt. You need to actually KNOW what your entire income is - to the penny and KNOW what you’re spending - to the penny - to have any chance of getting debt free and not returning to debt once you are.

I realise you’re incredibly stressed and that’s understandable. If you can try to calm yourself just a bit and instead of putting down guesstimate figures, find the real figures - you will start to see what you’re dealing with. It might not be pretty but if it’s honest it does at least give you some control. You seem to sound as though you feel out of control at the moment. Get that back and start from there. Knowing what you’re facing surely has to be the first step.

if you always look after the pennies, the pounds will look after themselves. Sounds geeky but I always know every bill, DD and account balance - to the penny. I lost control many years ago and I’d say it’s been the most basic foundation for me to know where I am and keep it that way.

NiteEyez1980

Hi ya

That was my calculation error. 

The rest of the figures are to a letter what I paid in September. 

Fuel or shopping (aka family) ends up going on the credit card.

Do not smoke, have any hobbies, vices or expenditures. 

Grumpelstiltskin

You need to do a proper SOA.

SOA Calculator (lemonfool.co.uk)

Format for MSE and then we can make suggestions.

EssexHebridean

NiteEyez1980 said:

Hi guys

I'm drafting my SOA and its:

Mort=1094
Council tax: 146
Cc/loans: 1578
Energy 340
Road tax: 65
Water:41
Diesel/fuel: £300
Car insurance: 70
Tv/mobile/broadband:100

My take home is about £3,400

Leaves about 300 for a fam of 6 a month

This is excluding any luxuries or clubs or anything for kids etc

If I wrote to all my creditors and offered a 50% payment, what do you think, any templates about? 

This is the reason we say work through the form given in the link in my signature. You've already been given examples of all the things that you're not including. The form we recommend lays things out so not only we - but more importantly YOU can see what's being spent in each area - it also separates out the things you MUST pay as priorities from the debts -take a look again at the "money over" once the debt payments are excluded - looks like a rather different picture, doesn't it! 

A couple of questions - your mortgage payment amount has increased by over £100 since you made your original post a couple of days ago - is that because you're now on a variable rate and so the payments have increased? Have you spoken with your existing mortgage company about a new product for a fix? 

Take a breath and then go back to the beginning - you need to do the steps on this one, not try and just "fix everything" - until you do the SOA we don't know whether you can even afford 50% payments to the debts do we - and come to that, neither do you! It also might be better to NOT pay anything in the first instance - in the longer term you may well do less damage to your credit file by stopping payments and letting things default.

As I say - baby steps. Let's get your budget sorted first, and then worry about how to clear the debt. And if making that level of debt payments IS going to leave you going further into debt this month, stop paying some of them. Initially that could be by asking for breathing space as that will buy you some time to work things out. I'd suggest that if you're going to not pay some then make sure it's not anything with the same provider as your mortgage simply because you still may need to negotiate a new product with them, and there's no point in risking complicating that. 

MrsBunny

NiteEyez1980 said:

Hi ya

That was my calculation error. 

The rest of the figures are to a letter what I paid in September. 

Fuel or shopping (aka family) ends up going on the credit card.

Do not smoke, have any hobbies, vices or expenditures. 

Honestly, you need to break everything down. Even the stuff on the credit cards.

I have had to adjust my budget over the years to include things like school dinners, breakfast/after clubs, school trips, bookfairs, £1 for charity day, raffles etc etc - School are a nightmare. I budget £200 a month (1 child) and that includes lunches and breakfast/afterschool clubs and the rest goes into a savings pot for the other adhoc stuff and for the new shoes/uniform they need. With 4 children, school must be part of your spending? 

Does your wife work? 

Visit one of the charity websites, they have templates and advice on how to write to your creditors. 

RAS

Grumpelstiltskin said:

You need to do a proper SOA.

SOA Calculator (lemonfool.co.uk)

Format for MSE and then we can make suggestions.

Absolutely, until you understand fully (both of you) how much you are spending on what, you've no chance of dealing with your debt. Get out all the bank and credit card statements for the last 6 months and work though them slowly but consistently.

That may show up latte habits, in one case it showed up a £400 per month beer habit. And I've just watched multiple families this afternoon spend £4 per child on after-school snacks in Greggs. Add the odd weekend visit and that's £100 per child per month. 

Or it may show up the real costs of your commute.

The best way of improving your family income now is NOT for you to get paid more. It is for your wife to work one day a week and maybe a couple of evenings. Anything she earns under the NI limit is received in full, anything else under the tax limit only contributes to her NI account and is otherwise tax free.

And if either of your wife's eldest children are still in school, she really needs to chase CMS.

Andyjflet

As Ras says, start with controlling and having a look at what the whole picture is, the biggest thing for me when I started my debt free journey was how much more money I now have left at the end of the month, not how much month is left at the end of the money. It really is a liberating experience being able to see ££ in your bank and allocating it to savings, debts or pots. I challenged myself to under £1000 a month outgoings, I start a new job this Monday on £59k and now I have lower outgoings and close to clearing my debt It feels great. Thankfully I found this Forum and Dave Ramsey many years ago, in fact I discovered Dave Ramsey from this forum.

Bite the bullet, get everything listed and start from there, we can help, most of us have been there or are going through similar. 

NiteEyez1980

[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......... 4

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

Monthly Income Details[/b]

Monthly income after tax................ 3400

Partners monthly income after tax....... 600

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

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

Total monthly income.................... 4000[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 775

Secured/HP loan repayments.............. 328

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

Management charge (leasehold property).. 0

Council tax............................. 146

Electricity............................. 170

Gas..................................... 170

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

Water rates............................. 66

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

Mobile phone............................ 25

TV Licence.............................. 46

Satellite/Cable TV...................... 60

Internet Services....................... 20

Groceries etc. ......................... 800

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

Petrol/diesel........................... 350

Road tax................................ 70

Car Insurance........................... 84

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

Car parking............................. 38.5

Other travel............................ 120

Childcare/nursery....................... 100

Other child related expenses............ 100

Medical (prescriptions, dentist etc).... 25

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

Buildings insurance..................... 56

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

Life assurance ......................... 0

Other insurance......................... 15

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

Haircuts................................ 40

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

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

Emergency fund.......................... 50[b]

Total monthly expenses.................. 4004.5[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 300000

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

Car(s).................................. 2000

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

Total Assets............................ 302000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 133000...(775)......0

Secured Debt.................. 54000....(328)......0[b]

Total secured & HP debts...... 187000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Natwest credit card............5276......122.......0

Natwest overdraft..............1200......26........0

Natwest loan...................16000.....254.......0

Next...........................600.......50........0

Creaton (wardrobe) ............500.......16........0

Sainsburys credit car..........9449......180.......0

Virgin credit card.............6549......70........0

Tesco credit card..............4961......61........0

MBna credit card...............5915......151.......0

Hsbc credit card...............3142......130.......0

Shawbrook bank loan............13674.....247.......0[b]

Total unsecured debts..........67266.....1307......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 4,000

Expenses (including HP & secured debts). 4,004.5

Available for debt repayments........... -4.5

Monthly UNsecured debt repayments....... 1,307[b]

Amount short for making debt repayments. -1,311.5[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 302,000

Total HP & Secured debt................. -187,000

Total Unsecured debt.................... -67,266[b]

Net Assets.............................. 47,734[/b]

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

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