HONEST FEEDBACK ON MY SOA PLEASE???????

Groovy_Chick_

Hi, I'm 26 and new to SOA completing, Please tell me where I could improve as I am wanting to learn new financial knowledge. All the best, GC. 

Household Information

Number of adults in household........... 1

Number of children in household......... 0

Number of cars owned....................      0

 

Monthly Income Details

Monthly income after tax................     1575

Partners monthly income after tax....... 0

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

Other income............................ 0

Total monthly income.................... 1575

 

Monthly Expense Details

Mortgage................................ 347

Secured/HP loan repayments.............. 0

Management charge (leasehold property)..  112

Council tax.............................  96

Electricity............................. 50

Gas..................................... 50

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

Water rates............................. 18

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

Mobile phone............................ 10 (GIFFGAFF TOP UP PHONE BOUGHT OUTRIGHT)

TV Licence.............................. 13.25

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

Internet Services....................... 35

Groceries etc. ......................... 200 (INCLUDES TOILETRIES)

Clothing................................ AS AND WHEN AS I WEAR OLD CLOTHES

Petrol/diesel........................... 0

Road tax................................ 0

Car Insurance........................... 0

Car maintenance (including MOT)......... 0

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

Other travel............................ I WALK TO WORK

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

Other child related expenses............ 0

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

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

Buildings insurance..................... 0 (INCLUDED IN LEASEHOLD FEES)

Contents insurance...................... 15

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

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

Presents (birthday, christmas etc)...... 0

Haircuts................................ 0

Entertainment........................... 10

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

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

Ring Doorbell CCTV Plan………..3.50

lottery................................. 0

pension................................. NOT CURRENTLY CONTRIBUTING

Total monthly expenses..................959.75

 

 

Assets

Cash...................................NOTHING IN SAVINGS YET AS HAD REPAIRS

House value (Gross)..................... 350,000

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

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

Other assets............................ 0

Total Assets............................350,000

 

 

Secured & HP Debts

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

Mortgage.................. 48,500       347 

Total secured & HP debts...... 0

 

Unsecured Debts

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

OCEAN CREDIT CARD                     1100       100           30%

AQUA CREDIT CARD                        1100       100           30%

VANQUIS CREDIT CARD                  800         100           29%

Total unsecured debts………………….3000

 

 

Monthly Budget Summary

Total monthly income....................

Expenses (including HP & secured debts)……..

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

Monthly Unsecured debt repayments.......300

Amount left after debt repayments.......

 

Personal Balance Sheet Summary

Total assets (things you own)........... 350,000

Total HP & Secured debt................. 0

Total Unsecured debt.................... 3000

Net Assets.............................. 350,000

Mortgage Equity………………….. 301,500

fatbelly

There's a lot of interest being paid on those sub-prime credit cards. You appear to have the surplus to pay them so before we can start talking about a savings pot and contributing to a pension, you need to be getting rid of them.

None of your figures look unrealistic to me so on paper you can probably clear the cards in six months if you are disciplined.

Is your mortgage on a fixed deal? What is it and when does it end?

Groovy_Chick_

Hi @fatbelly, I agree they are quite high interest, what would you recommend as an average figure to pay to them, I live very frugal anyway so it won't hurt to tighten the belt a bit more for a few months, my fixed deal ends March 2028 it's only 3 percent so I am going to overpay once debts are gone to clear the remaining mortgage balance within those 5 years. This is also why I haven't contributed to pension or to savings again as I had some home repairs and want to clear my credit cards and mortgage first.

Thanks 
GC 😃

Groovy_Chick_

Also I have heard of debt snowballing, would this be an effective method in my situation please? Or do I pay each credit card to equal amounts.......hoping someone with experience or knowledge comes along soon......

Martico

By the look of it, you've got 600pm "spare", of which 300 is currently going towards those debts. If I were in this position, I'd keep up the 100pm minimum on two of the cards, and chuck the rest at the third. With interest rates that high, I don't think an emergency fund is particularly worth building up right now.
But, once all three cards are cleared, I'd aim to balance building up a savings pot while paying down the mortgage. 

Groovy_Chick_

@Martico thank you for your wisdom, I never thought of putting the rest to one card with the lower balance, I will arrange for this to be done when I get paid at the end of the month, then once the lowest balance card is gone should I then split the payment equally between the remaining two, given there is not any difference in interest rates? 

Sorry for so many questions, I don't have anyone in real life to talk to about this stuff and I am not the most clued up on clearing debt.

Also not sure if this makes any difference, but the cards are cut up so any payments are towards the debt and are not being re borrowed.

Thanks, 
GC 

Martico

With them at similar interest rates it doesn't make a great deal of difference financially. 
But the morale boost from clearing one completely and then another completely can be great. It's shorter-term attainable targets (monthly targets here are totally made up without calculating at all: "I'll clear one by September, another by December, and the third by February" feels better than "I'll clear them all by February")

WYSPECIAL

The not currently contributing to a pension should be sorted out ASAP. You are literally turning down free money from your employer and the tax man.

Given the massive amount of equity in the house your pension should be given priority over any thoughts of over paying the mortgage.

fatbelly

Yes, the mortgage is on a nice low rate for the next 5 years. The priority is those credit cards. I didn't mention snowballing because the theory is that you preferentially overpay the highest interest debt. But all three cards are equally high atm.

You could try for a 0% balance transfer to a 4th card but do a soft search first. You don't want to damage your credit record

https://www.moneysavingexpert.com/credit-cards/best-0-credit-cards/

You may already do this but a good tip to avoid late payment markers is to set up a d/d with each card for the minimum payment each month. 

theoretica

Living frugally is useful, but also knowledge is power - it might be useful for you to keep track of how much you spend on clothes and stuff - both necessities and nice to haves.

enthusiasticsaver

It looks like you have your budget under control so the biggest areas to work on are the high interest credit cards, the lack of emergency savings and the lack of pension. If the soa is correct and you are really able to live so frugally I would try to chuck £400 at the debt starting with the £800 credit card as all the interest rates are similar. You could have that paid off in 2 months then tackle the next over the next 3 months then the final one.  If you can get any moved to 0% that will sort it quicker. 

After the debt is gone sort out the emergency fund and  pension.