Looking for some advice on finances

sr86

Hi,

We are a couple in mid thirties looking to get a grip on our finances so welcome any advice. I often worry that we have too much unsecured debt and want to make a point of reducing that best we can but seeing some posts on here makes me feel a lot more fortunate than others.

Few plus points in the coming months:-

I'm currently overpaying on the smallest loan with a view to clearing that within 6 month thereby freeing up an additional £120 per month. Also will be saving around £150 in childcare costs from a family member in January as the youngest will receive 30 hours free childcare.

This is a snapshot of our finances currently

[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.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 2480

Partners monthly income after tax....... 1550

Benefits................................ 286

Other income............................ 300[b]

Total monthly income.................... 4616[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 1248

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

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

Management charge (leasehold property).. 0

Council tax............................. 193

Electricity............................. 110

Gas..................................... 110

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

Water rates............................. 31

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

Mobile phone............................ 98

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

Satellite/Cable TV...................... 67

Internet Services....................... 45

Groceries etc. ......................... 320

Clothing................................ 30

Petrol/diesel........................... 120

Road tax................................ 13

Car Insurance........................... 45

Car maintenance (including MOT)......... 10

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

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

Childcare/nursery....................... 300

Other child related expenses............ 53

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

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

Buildings insurance..................... 28

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

Life assurance ......................... 21

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

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

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

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

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

Emergency fund.......................... 0[b]

Total monthly expenses.................. 2955.25[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 360000

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

Car(s).................................. 18000

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

Total Assets............................ 378000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 245000...(1248).....4.7[b]

Total secured & HP debts...... 245000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Loan 1.........................15600.....319.......8.7

Loan 2.........................7400......183.......4.9

Loan 3.........................3000......120.......14.8

Credit Card....................1600......100.......0

Car Loan / PCP.................9000......259.......0[b]

Total unsecured debts..........36600.....981.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 4,616

Expenses (including HP & secured debts). 2,955.25

Available for debt repayments........... 1,660.75

Monthly UNsecured debt repayments....... 981[b]

Amount left after debt repayments....... 679.75[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 378,000

Total HP & Secured debt................. -245,000

Total Unsecured debt.................... -36,600[b]

Net Assets.............................. 96,400[/b]

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

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

joedenise

Do you have £679.75 left at the end of the month?  You've entered money against things like clothes but where do you save that money?  This seems more like where you would like to be rather than where you actually are!  Do you really only spend £320 a month on groceries for 6 people?  I would suspect it is much higher than that - I spend £250 a month for just 2 of us!

There are some things which look very high such as gas and electric; mobiles (how many?); satellite etc.  Do you really need satellite?  Could you cut that out and just have Netflix or Now TV instead?

I think it would be a good idea to keep a spending diary for a month and see where you money is actually going - I think that would give you a better of idea of what you are really spending.  You also need to be saving the money for things like clothes but I suspect you are just buying as and when needed out of that month's money.

Hope that helps a bit.

sr86

Thanks for the response

It is more of a where we would like to get to tbh.

We probably get an £80 a week shop delivered and then end up spending £20 here and there on milk/bread etc when needed.

We end up spending on takeaways/treats/Hello Fresh etc so that's easy to cut out/lower.

Currently in contract for Sky until June and will be cutting that down when the time comes.

Mobiles are 2 devices (mine & wifes)  which also will be likely SIM only when the time comes

We live to our means most months waiting a day or 2 until payday but most of that is things we don't necessarily need (like the treats/takeaways)

Richard1212

The whole LemonFool chart seems way out of line. Some of it just doesn't make sense. As joedenise says, I think you should either keep a meticulous diary for a month or two of all transactions ; or fill out your LemonFool chart realistically.

I haven't got time to go into every detail of your chart but take a few examples : 
1. your house and car are not really assets---you're a long way from owning either of them.
2.Given all your outgoings , including mortgage and the loans, how can you possibly be £679 in credit at the end of the month ?
3.How can a family of 6 spend a mere £320 pcm on groceries ( and the etc you put after it probably means it includes all household things from soaps, toiletries, the very many cleaning products needed in every home, stationery and greetings cards, towels and dish cloths, etc etc) ?
My wife and I spend twice as much as that but you think you spend about the same as that lot AND food that you spend on childcare; or the same as you spend on petrol + council tax. Those sorts of examples ( and there are more) are not anywhere near the "norm" or any figures that make sense.
4.How can any family with 4 children pay nothing at all on birthday/xmas/etc gifts or cards ??????? Or even on haircuts--does your wife not even use a hairdresser?
5.You have no contents insurance ?
6. Four children never have a holiday ?
7. As joedenise says, the gas and elec figures don't look "right" and they happen to be exactly the same figure as each other ?
8. Very large expense on cable/sat TV, mobile phone/s ( getting on towards £200 ) --- when you spend £30 on clothes for a family of 6 ?

I could go on but I haven't got the time. As has already been said by previous poster, your financial chart just cannot be correct. It does sound more to be something you wish it was rather than actuality.

I'm sorry to be blunt but it is meant in a constructive way that may lead you look again at your income vs outgoings and figures that show large disparities. I would advise keeping a financial transactions diary every single day ( without missing any items at all, even minor ones ). You may then be able to see a different picture than you see now and be able to return to this forum if you wish. Good luck and best wishes.

 

sr86

Apologies. I think I may have misunderstood how in depth the SOA needed to be as my main concern was the Unsecured debt which is what I'm attempting to address. 

We end up living month to month after spending that "£679" on treats/birthday presents/hair cuts every other month/little trips out etc (Basically living "just" to our current means")

Food costs arent too bad as the kids are at school Mon - Fri and also get tea at Grandmas twice a week after school.

Contents Insurance was in with my buildings insurance

Gas & Elec is £220 a month (6 bed house over 3 floors) so I just halved the figures but will get actual split

I will look to do a more comprehensive SOA and re-post it to the degree required

pearl123

6 people are in the household, yet it's only £30 in clothes per month. Does that include shoes?
Any costs with Opticians?
Do the children have no birthday gifts or money towards clubs/outings? Sweets per week?
A lot of figures seem very low for 6 people. 
£10 a month car maintance seems very low too. 

sr86

Thanks for the reply Pearl123. Some responses in terms of your queries

The kids 2 (2 girls and 2 younger boys) have a lot of cousins who are slightly older so we get a lot of clothes/shoes that way. 
No opticians related costs
Kids have odd birthday parties to attend at a cost of maybe £5 here or there every month or so (nothing consistent in order to document)
Kids have an animal which they part loan which I put under the Entertainment category
Cant think of anything obvious in terms of car maintenance (Popped £20 per month which pays for annual MOT, tyres etc)

The £600 left in the previous SOA is always used up by the end of the month on the things you have mentioned, just looked at October alone and £200 has been spent on the likes of McDonalds, Hello fresh, Bakeries, Takeaways etc

New sheet filled in with a little further look into my bank statement

[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................ 2480

Partners monthly income after tax....... 1550

Benefits................................ 286

Other income............................ 300[b]

Total monthly income.................... 4616[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 1248

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

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

Management charge (leasehold property).. 0

Council tax............................. 193

Electricity............................. 116

Gas..................................... 79

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

Water rates............................. 31

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

Mobile phone............................ 98

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

Satellite/Cable TV...................... 67

Internet Services....................... 45

Groceries etc. ......................... 550

Clothing................................ 60

Petrol/diesel........................... 150

Road tax................................ 13

Car Insurance........................... 45

Car maintenance (including MOT)......... 25

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

Other travel............................ 30

Childcare/nursery....................... 300

Other child related expenses............ 75

Medical (prescriptions, dentist etc).... 10

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

Buildings insurance..................... 20

Contents insurance...................... 10

Life assurance ......................... 21

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

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

Haircuts................................ 43

Entertainment........................... 150

Holiday................................. 80

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

Dining Out / Treats etc................. 20[b]

Total monthly expenses.................. 3542.25[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 360000

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

Car(s).................................. 18000

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

Total Assets............................ 378000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 245000...(1248).....4.7[b]

Total secured & HP debts...... 245000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Loan 1.........................15600.....319.......8.7

Loan 2.........................7400......183.......4.9

Loan 3.........................3000......120.......14.8

Credit Card....................1600......100.......0

Car Loan / PCP.................9000......259.......0[b]

Total unsecured debts..........36600.....981.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 4,616

Expenses (including HP & secured debts). 3,542.25

Available for debt repayments........... 1,073.75

Monthly UNsecured debt repayments....... 981[b]

Amount left after debt repayments....... 92.75[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 378,000

Total HP & Secured debt................. -245,000

Total Unsecured debt.................... -36,600[b]

Net Assets.............................. 96,400[/b]

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

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

Richard1212

That was a quick SOA transformation. I would keep the diary for at least one month, preferably two months, as suggested by others and then try a much more considered and wholly accurate SOA rather than a quick change done in just a few hours. Good luck.

enthusiasticsaver

The second soa looks a bit more realistic.  Your situation is not dire as you can manage at the moment to cover your outgoings.

Is the car loan really 0% or are you  leasing the car? Once your childcare reduces I would start by overpaying the smallest loan which also appears to be the most expensive.  When does the 0% credit card deal expire? 

Moneywhizz

Now that you have a more realistic SOA you can see that you need to start making some changes so that you can work at getting your unsecured debt down as that is what your original post was about. Your debt is taking up almost a £1000 which is a high percentage your income. How much better would it be if you had no debt and could use that money to make your life more secure and enjoyable. You need to study your SOA and see where you can cut back to free up some extra money to put towards your debt. Obviously it can't be from your fixed household bills so areas like cable tv, mobile phones, eating out/takeaways are the ones that will have to be tackled.  There is a snowball calculator that will show you the best way of tackling the debt and how long it will take to clear it depending on how much you can overpay. This is a great board for reading how people are tackling their debt and managing to cut back so keep reading the diaries and you will pick up tips along the way. I wish you good luck with your journey. 

sr86

enthusiasticsaver said:

The second soa looks a bit more realistic.  Your situation is not dire as you can manage at the moment to cover your outgoings.

Is the car loan really 0% or are you  leasing the car? Once your childcare reduces I would start by overpaying the smallest loan which also appears to be the most expensive.  When does the 0% credit card deal expire? 

Thanks for the response.

Im not sure what % the car loan is tbh (something I’m going to find out)

Hopefully the smallest loan (£120 per month) will be paid off by March and then I can start using that £120 to pay towards the next lowest loan.

the credit card isn’t 0% so I’m looking to get a 0% balance transfer card - £31 interest was added this month on the £1600 statement balance