SOA budget advice

snowdrop33
snowdrop33 Posts: 15
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edited 16 December 2022 at 11:20AM in Debt free diaries
So I posted earlier about having 10.5k to pay off debts. I feel an SOA may help better understand our situation. 
Me and my husband are going through everything later this week to plan on reducing our budget and basically get things into the black. So I thought I’d post this on here so we can look at the advice when we go through it together. 

We have two young children under 3, and my husband has an older daughter. The SOA is based off my new income as I am reducing my work slightly. So we’ve been managing up until now as I’ve been doing extra shifts. But I feel I am having to work more than full time hours at times and juggle the children to make ends meet and it’s having an impact on my health. I could continue to work the extra hours and if we can’t reduce our budget I will have to. I just don’t want ti miss out on my children. My husband works full time and in his role he can’t work extra hours like I am able to. 

The only hobby we both have is our sport and we do compete in this on occasion we both really don’t want to give this up. 

We have tried budgets in the past but I think we never created sustainable realistic ones or never budgeted for fun things so would have enough and end up not bothering. 

We really need to sort our spending and manage our budget so we can stop getting into debt and actual pay it off. 

I don’t know if any of the above is even possible. Now to go hide in shame at our lack of budgeting skills and spending. 

And sorry also to mention so we have 10.5k to pay towards the debt. From advice earlier I was thinking of putting £2k in a savings account as an emergency fund as we have nothing. And then using the 8.5k for debts?

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

Monthly Income Details[/b]
Monthly income after tax................ 3119
Partners monthly income after tax....... 2100
Benefits................................ 157
Other income............................ 0[b]
Total monthly income.................... 5376[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 1052
Secured/HP loan repayments.............. 514
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 232
Electricity............................. 150
Gas..................................... 0
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 0
Mobile phone............................ 82
TV Licence.............................. 14
Satellite/Cable TV...................... 20
Internet Services....................... 32
Groceries etc. ......................... 833
Clothing................................ 60
Petrol/diesel........................... 250
Road tax................................ 92
Car Insurance........................... 93
Car maintenance (including MOT)......... 130
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 606
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 7.5
Pet insurance/vet bills................. 31
Buildings insurance..................... 11
Contents insurance...................... 0
Life assurance ......................... 19
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 60
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 50
Child support - husband has older daught 125
Supplements-protein, vitamins .......... 60
Date nights and takeaways............... 100
Me and husband sport comp............... 30
Family days out......................... 60
Children gymnastics..................... 40
House fund - painting/furniture......... 25
Children fund........................... 25
Holiday fund............................ 215
Gym memberships......................... 72
Professional fees....................... 27
Spotify................................. 13.99
Tesco delivery saver.................... 7.99
Breakdown............................... 13[b]
Total monthly expenses.................. 5257.48[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 475000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 475000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 297000...(1052).....0
Hire Purchase (HP) debt ...... 15000....(204)......0<
HP.............................24000....(310)......0[b]
Total secured & HP debts...... 336000....-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Novuna - sofas.................208.......52........0
Barclays loan..................27000.....647.......5.4
Barclays loan..................9300......212.......3.8[b]
Total unsecured debts..........36508.....911.......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 5,376
Expenses (including HP & secured debts). 5,257.48
Available for debt repayments........... 118.52
Monthly UNsecured debt repayments....... 911[b]
Amount short for making debt repayments. -792.48[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 475,000
Total HP & Secured debt................. -336,000
Total Unsecured debt.................... -36,508[b]
Net Assets.............................. 102,492[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
Debt free journey, current debt Jan 2023:
Barclays loan: £29,947.14
HP: £19,410
mortgage: £296,628
«1345

Comments

  • Hi Snowdrop,

    Completely subjective, immediate questions that popped into my head were:

    Would you be able to do your family's hair yourself from time to time? Or only go once 3 months or so?

    I presume the HPs are the vehicles. Are you able to sell these, pay off finance and get cheaper vehicles outright? That would free up a chunk of the monthly budget. That is only a guess. If they are - whats their current market value and the T&Cs in regards to early repayment and vehicle retention?

    I'd pay off the sofa debt immediately. So tiny, but annoying.

    Could also try to minimise 100 budget for take outs for a while. See if it works for you. Homemade taco Tuesdays aren't so bad!

    Holiday fund could get adjusted to 'camping fund' this year. Budgeted accordingly.

    Other than that I'd probably pay off the smaller Barkclays loan and free up some income. Have a tiny emergency fund for a month and start building it up after the loan is gone. Looking at the expenditure, 2k is probably a little modest for you.

    Best Wishes
  • Road Tax £92 a month? What cars have you got?

    Groceries plus Takeaways almost £1000 a month?  What on earth are you eating?
    If you go down to the woods today you better not go alone.
  • RobM99
    RobM99 Posts: 2,490
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    edited 12 December 2022 at 9:19PM
    £80 - mobiles?  Holidays £215?  With the above post, I can see where the problems lie!
    Now not a gainfully employed bassist.
  • TheAble
    TheAble Posts: 1,586
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    RobM99 said:
    £80 - mobiles?  Holidays £215?  With the above post, I can see where the problems lie!
    £215/month for holidays isn't that egregious. What is that nowadays, one week in Spain? I can sympathise with this one as I generally have to stump up similarly myself.
  • Road Tax £92 a month? What cars have you got?

    Groceries plus Takeaways almost £1000 a month?  What on earth are you eating?
    We are both higher tax I think both of them reduce to £16 a month each from 2023.

    the groceries includes nappies, wipes etc but we do spend around £200 a week sometimes a bit less. This includes dog food too I think I may have added that twice. 
    Debt free journey, current debt Jan 2023:
    Barclays loan: £29,947.14
    HP: £19,410
    mortgage: £296,628
  • With holidays so we don’t go regularly and it may seem like it from the above. But we haven’t been on holiday since our honeymoon 3 years ago. But we have Center parcs booked next year which I didn’t budget for so now have tried to and estimated £65 a month between now and May. 
    The other £150 a month is because we both really want to take our children to Lapland in a couple of years. And I did a rough estimate and that was approximately how much we would need to save to do it for a week and the activities etc. 
    Debt free journey, current debt Jan 2023:
    Barclays loan: £29,947.14
    HP: £19,410
    mortgage: £296,628
  • You are almost £800 short each month so you really need to cut back urgently. Half your income is going on debt repayment including the mortgage. Once you add in the very high groceries/takeaways and childcare and child maintenance there is little left but you are still trying to do holidays and expensive hobbies. That is unsustainable long term.

    The groceries is very high. I would leave the Lapland holiday until the debt is gone or nursery costs reduce or stop. You can’t afford it at the moment and no leeway in budget to save for it. 

    You appear to have two expensive cars but nothing showing in assets. Are you leasing them? 

    I would use the money to tackle one of the Barclays loans if you are able to overpay and see if you can make the car costs more affordable. 

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  • In your other thread you talked about CC debts but the SOA doesn't have them?

    As you are short each month it will take some serious cut backs to cover the debt. Once it's gone you will be able to save for the Lapland holiday much faster, and with less worries.

    Well done for putting up a SOA. I see so many here that can't reflect actual spending but are an aspiration. If all figures are accurate it does explain how you ended up where you are. And knowing that is an excellent first step getting to where you want to be

    Feel free to ignore this last but as others will also be able to advise and you are not me. If I were you I'd use the lump sum to set aside an emergency fund (for actual we have no place to live, car blew up, replace boiler in winter emergencies) then pay off as many of the little debts on one go. This will free up some  minimum payments quicker. Also sit down together with your partner and work out what you can realistically spend in each area. Because somethings have to change in order to make ends meet.

    Good luck and if there is anything I've learnt about this forum from lurking is that everyone here is rooting for you.
  • foxgloves
    foxgloves Posts: 10,919
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    edited 13 December 2022 at 7:53AM
    Well done for being brave enough to put up an SOA. One pretty easy money-finding win should be your groceries. Over £800 a month for a family of 2 adults & 2 tinies is insanely high. With the kind of food planning required to run an effective debt-busting budget, you can half this amount. That would give you an extra £400 a month to throw at your debts.
    Also.....Lapland. Lovely idea, but it's one for a family which isn't in debt. Once your debts are paid off & you can start saving a monthly amount for this holiday within your budget, then that will be the time to book it. When you've been used to using credit to buy things, it becomes an ingrained habit (I speak from experience as did not decide to reform my sloppy money habits till in my early 40s) & the following simple fact can get lost......that what you earn each month from whatever source is YOUR money. There isn't any more. Anything else (ie credit) is SOMEBODY ELSE'S money & that means payback time will inevitably descend.
    You're right that budgets need to be realistic, but so do spending choices when there is already debt. Definitely worth sorting it out now before it gets any bigger.
    F
    *Edited to say I replied before I had read your earlier post.
    "For each of our actions there are only consequences" (James Lovelock)"For in the true nature of things......every green tree is far more glorious than if it were made of gold & silver" (Martin Luther King Jnr)
  • I think you are living in a dream world just sticking anything and everything on credit without thinking how you are going to pay for it.

    Why did you book Center Parcs if you didn't know how you were going to pay for it?

    Forget Lapland that  is an over hyped place by the Travel Companies to bring in loads of money during their quiet winter.
    If you go down to the woods today you better not go alone.
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