Help

EssexHebridean

Ok - that’s certainly better on the SOA and it’s now started the “work in progress” phase - well done! 

First thing is that there needs to be an income from your daughter now she is working - and well done to her for overcoming challenges to get there! I’d suggest as a starting point that you should discuss with her that 20% of her income should be a household contribution - that will then begin to cover her share of the costs, and will also give her an excellent grounding for the future in terms of budgeting and paying bills. At the same time if there are personal costs for her that you guys currently pay, you need to start transitioning her over to paying those for herself too - by that I mean things like mobile phone cost or any other tech type subscriptions, toiletries, spending money for time away in the motorhome. Again, this will help her to get her head around budgeting for the things she wants to do. Also encourage her to start paying into a pension, and to start saving a set amount of income each month too - the sooner she starts with healthy money habits now, the better. 

I can well see that the motorhome would be a bit of a game changer for you - not least as it does mean you have the option for holiday time - but it is expensive, and right now I’m not convinced you can really justify it. I’d suggest that one option might be to give yourself this summer to change some habits - cut spending to the bone elsewhere, make sure you really start budgeting for time away using it (and realistically, that might be the deal-breaker as I’m not sure you have the surplus available for this) - but in 6 months time, if you’re not managing to make inroads into the debt, you have to look at terminating the HP  and handing it back. 

Start a spending diary from now to document every penny you spend. Have a separate page for groceries, then you’ll be able to track what you are spending there (it will have been more than you think!) and also, before you head out for the weekly shop, stocktake your fridge, freezer and cupboards and challenge yourselves to create as many meals from the things you already have as possible - once you have the contents lists this could be a family exercise. Start to stop and think before you hand over money for anything at all. 

stymied

Can the motor home be used to pay for itself? Maybe start with friends and family only renting it, making sure to get the right insurance?

What do you need to do to get your health back on track? That should be a priority too.

kimwp

stymied said:

Can the motor home be used to pay for itself? Maybe start with friends and family only renting it, making sure to get the right insurance?

What do you need to do to get your health back on track? That should be a priority too.

This is a great idea, you'd need to consider tax as well as insurance, it might be possible to get an income of £1000 tax free under the self-employment allowance.

Just occurred to me- you said that you use the motorhome a lot, have you put the fuel costs for that in the holiday (plus any camp site fees, cooking fuel costs, meals out etc)- it may make sense to put the motorhome insurance, mot, tax and maintenance in this category as well (or put the motorhome related expenses) in a separate category below the holiday entry (deducting them from the lines above if you've included them there). This would show the true costs of your holidays.

TheAble

Any way you can get out of the motorhome? It's a big liability and you just can't afford it on your income - as it is you have quite a considerable shortfall on your monthly debt commitments.

enthusiasticsaver

I think you need to sort out the priorities and move to essential only.  

There is nothing in the soa for groceries but I am sure you definitely do spend on food so you need to find out what that spend is by checking bank statements etc. 

You can default on the credit cards as even without groceries you cannot afford the repayments. Your credit record will be shot but that is no  bad thing.  Unless you can increase your income  or your daughter  starts paying board it does not even look like a debt management plan is an option at the moment.  

You are obviously way overcommitted on the car and the motor home so I would be looking to get  out of both of those HP deals and buy a runaround. The mobile phone deals are expensive so as soon as the contracts finish move to sim only. 

I appreciate your income has taken a hit but as you have no reserve I cannot see you can afford the car and motor home. Not only the cost of the HP but running costs.  No point in having a motorhome and paying a fortune in HP if you cannot afford the fuel to run it or the insurance or running costs. You have one car free of finance so using just the one car would be the ideal and handing the other one back. 

You can get out of this but it looks like you will need to adjust lifestyle.  You are still spending as if your income is good. 

katsu

Is your income likely to go back up from the £900 a month? If this if a short term issue it might change the choices you make than if its likely to be a long term new income level 

littleelse

Hi  A couple of questions, thoughts and ideas from me.

Back to basics:

• If you are on sick leave where is your income from, a workplace sick scheme (full pay for x months, half pay for x months) or statutory sick pay? When does that reduce or stop if you are unable to return to work? You will be entitled to benefits when that happens.
• Your SOA is 'jumpy' with different debts and amounts, are you able to really concentrate on getting those figures correct then you'll be in a much better position.
• Incidental spends and groceries. Really think about what money leaves your hands every day. Do any of you buy food and drink in work for example? A daily paper? A milkman? Be realistic about the things that are not in your weekly shop. Any smokers, drinkers, lottery players etc.

Suggestions:

• With your SOA in hand, ring all of your credit card, catalogue and credit scheme (Paypal got missed in your last SOA) and ask them to suspend your accounts for 3 months from 1st March.  This will stop interest and contact for the period while you work out what to do bringing your expenses well within your budget.
• Benefits checker - get on to an online checker with your income and expenditure. Don't underestimate things that you need to plan for like utility bills.
• SORN the motorhome and reduce insurance to third party fire and theft if your HP agreement allows you to.  This gives a couple of pounds back while you work out your masterplan.
• Open a savings account that allows you to create pots.  Aim for a small amount every month against an emergency fund and things like clothes and birthdays.

Motivation - a clear mind always starts with a declutter. 

• Start with your paperwork and accounts. Contact details of all along with account numbers all in one place.
• Using a calendar (online even), make a note of dates that contracts expire.  Mobile phones, internet, insurances etc. Actively prepare to shop around before they just rollover and leave you committed.
• Now you are at home and when health allows. Every cupboard and drawer emptied, cleaned and things to keep all tidied. Work out what you might be able to sell, maybe photographing and listing could be a job for your DD if she is unable to contribute to bills just yet. Aim for 10 items every month and set money aside for now. Separate pot that is just for sales.
• Freezers and cupboards. Full inventory of items in the cupboards and freezer stops unnecessary spend.
• Poorly days and lazy days.  Batch cook some things you all like and get them into the freezer. This stops any spend from last minute chips shop runs because everybody is too tired to cook (I'll never forget eating takeaway on credit card for 7 nights running just because I didn't have the energy with fibromyalgia!)

Mindset:

• This is too much, depressing, embarrassing and beyond your coping ability OR it is a fresh start, a project and motivational, something to be proud of doing. You will feel both at times, always try to keep in the latter.

Get started on putting things in order and you will feel much better.  It may be a slog, it will have ups / downs /slips and trips but there is a way out!

Looking forward to seeing your posts become more positive as the days, weeks and months roll on.