It's time to get things sorted

Hi All,

For a fair few years I have been struggling with finances but have had periods where it's been a lot better. Then fours ago I lost my mum, a year later I had a breakdown and had to leave my job. This meant my debts mounted while I tried to sort my life out. I had some financial help with some money coming from inheritance (it was not a large amount but it cleared on debt).

Since then I have struggled on and off. I moved into my first flat in May this year and have had to furnish it and pay for the start of tenancy and all those things which has meant I have now ended up in a position where I am using my credit cards to sustain my living. 

For the last few months I have been reducing my outgoings as much as I can and I have paid off a £300 overdraft, but I am still left with credit card debts across three cards to the value of £13,500 
This has now become unmanageable and I need to get it sorted. I have considered the possibility of selling my car and just getting a small car for the amount of journeys I currently do. 

I've popped my SOA below, any advice would be hugely welcomed. 

Thanks 
Emma 

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1[b]

Monthly Income Details[/b]
Monthly income after tax................ 1922
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 15[b]
Total monthly income.................... 1937[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 885
Management charge (leasehold property).. 0
Council tax............................. 155
Electricity............................. 50
Gas..................................... 0
Oil..................................... 0
Water rates............................. 26
Telephone (land line)................... 0
Mobile phone............................ 53
TV Licence.............................. 14
Satellite/Cable TV...................... 23
Internet Services....................... 16
Groceries etc. ......................... 140
Clothing................................ 30
Petrol/diesel........................... 80
Road tax................................ 12
Car Insurance........................... 22
Car maintenance (including MOT)......... 5
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 6
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 40
Entertainment........................... 60
Holiday................................. 25
Emergency fund.......................... 0[b]
Total monthly expenses.................. 1662[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 9500
Other assets............................ 0[b]
Total Assets............................ 9500[/b]
[b]
No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Nationwide CC..................2175......25........0
M & S CC.......................6025......108.......19.9
Halifax CC.....................5391......244.......27.76[b]
Total unsecured debts..........13591.....377.......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 1,937
Expenses (including HP & secured debts). 1,662
Available for debt repayments........... 275
Monthly UNsecured debt repayments....... 377[b]
Amount short for making debt repayments. -102[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 9,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -13,591[b]
Net Assets.............................. -4,091[/b]

Comments

  • fatbelly
    fatbelly Posts: 20,186
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    Forumite
    Hi. To me that looks like a realistic soa.

    The only comment I have at present on your expenditure is have you got a 25% single adult discount on your council tax and is it spread over 12 months? If not, then you have two free months coming up, which would be useful

    On your debts, the minimum payment on the Halifax card looks high. It's 5% of the balance. What is going on there?

    Have you tried the pre-eligibility checker to see if you can get a 0% balance transfer with a lower min payment?

    On the car I wouldn't rush to change. On the one hand it will be depreciating but insurance, road tax and maintenance all seem low. For the moment, better the devil you know.
  • @fatbelly

    Good to know it's realistic. I didn't want to say oh I spend so little on things, when that just wouldn't be true. Honesty is the best policy right now mostly with myself!

    Sadly that is with my single person discount!! Because they fluffed up my direct debit at the beginning, i have already had my two free months at the beginning to account for two missed payments. 

    I hadn't even realised how high that was, I am going to call them either tomorrow or Friday to see if there is anything they can offer me in terms of 0% credit or anything to allow me to be able to repay because minus the nasty interest it would be a lot easier to pay. But I know they are not always amenable to those things.

    Is there a best way to go about asking the credit card companies for help?

    No eligibility for 0% additional credit for a transfer sadly I did already try it. 

    That is what I have decided in terms of the car, it was an option a friend recommended as a possibility to release a bit of capital. But my answer was it has always been reliable. 

    Thanks so much for your info so far, hugely appreciated.



  • fatbelly
    fatbelly Posts: 20,186
    Name Dropper First Anniversary First Post Cashback Cashier
    Forumite
    So when your next council tax bill arrives, in March, go online and choose the 12 payment option as late in the month as it will let you.

    You can ask if Halifax will lower the apr and the minimum payment. If you don't ask you don't get. If they could match m&s you would reduce your payment by £150.

    The other option would be to ask for a higher limit on m&s and/or nationwide and BT across to remove the debt from Halifax.

    I wonder if you got caught up with 'persistent debt' rules. If that comes out in your conversation with Halifax, remind them they are supposed to be helping, not hindering you to get debt free. I have a couple of helpsheets if that comes up as a topic.
  • Hi All,

    For a fair few years I have been struggling with finances but have had periods where it's been a lot better. Then fours ago I lost my mum, a year later I had a breakdown and had to leave my job. This meant my debts mounted while I tried to sort my life out. I had some financial help with some money coming from inheritance (it was not a large amount but it cleared on debt).

    Since then I have struggled on and off. I moved into my first flat in May this year and have had to furnish it and pay for the start of tenancy and all those things which has meant I have now ended up in a position where I am using my credit cards to sustain my living. 

    For the last few months I have been reducing my outgoings as much as I can and I have paid off a £300 overdraft, but I am still left with credit card debts across three cards to the value of £13,500 
    This has now become unmanageable and I need to get it sorted. I have considered the possibility of selling my car and just getting a small car for the amount of journeys I currently do. 

    I've popped my SOA below, any advice would be hugely welcomed. 

    Thanks 
    Emma 

    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 1
    Number of children in household......... 0
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 1922 Have a think about ways you might be able to add to this - internet surveys can work well to add a little each month. There are threads on the forum relating to bosting income.
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 15[b]
    Total monthly income.................... 1937[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 885
    Management charge (leasehold property).. 0
    Council tax............................. 155 As fatbelly says - get this on to 12 months in the new financial year. It will help with budgeting, albeit you will almost certainly have to account for an increase at the same time.
    Electricity............................. 50 This does concern me as it does seem very low - are you certain it is correct, particularly if your flat is all electric?
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 26 This is metered I assume? If so, make sure that you're not running in credit as that feels a little high for a single person. 
    Telephone (land line)................... 0
    Mobile phone............................ 53 This is high and when your current contract ends you should look to keep your existing phone and go over to a SIM only deal - that will save you a nice chunk each month.
    TV Licence.............................. 14
    Satellite/Cable TV...................... 23 Might you be open to looking at changing this to a cheaper option? You could keep yourself with plenty to watch by alternating between the various providers out there for a couple of months at a time - so a couple of months of Prime, then a couple of Netflix etc. Works out better than a longer contract for a traditional satellite type connection quite often.
    Internet Services....................... 16
    Groceries etc. ......................... 140 Make sure this is really what you are spending - people do sometimes get caught out by adding up their main weekly shops but forgetting the top-up shops. Just one to run a check on every so often. 
    Clothing................................ 30 This is far from unreasonable but I would suggest trying to keep it to absolute necessities only for a while. that doesn't mean not putting this amount aside each month - but it will hopefully be the case that every so often you can then look at an amount built up and transfer some of it to debt.
    Petrol/diesel........................... 80
    Road tax................................ 12 if you are currently paying this monthly then you need to start setting additional money aside now to pay upfront when it is next due as that works out cheaper than paying monthly. Once you have done that, you would then revert to setting an amount aside each month  ready for the payment the following year.
    Car Insurance........................... 22
    Car maintenance (including MOT)......... 5 I'm afraid this really doesn't feel realistic to me - and I don't believe it can be covering all your costs, allowing that you appear to do a reasonable amount of mileage. You need to sit down and think about everything you might have to pay out for in a year - MoT, servicing, a new set of tyres when needed, even things like screenwash or ne wiper blades. Divide that by 12 (months) and then add on 10% for contingencies - and that is the amount you need to be setting aside to avoid needing to reach for credit when a big spend comes along.
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 6
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 5 Well done - this is very low! Just make sure that you are correctly insured.
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 15
    Haircuts................................ 40
    Entertainment........................... 60
    Holiday................................. 25
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 1662[/b]
    [b]

    Assets[/b]
    Cash.................................... 0 There are various bits above that you budget to set money aside for monthly - which means that a zero figure here is a concern. Where is your car maintenance, holiday and anything left of your presents/christmas budget? Are these budgeted amounts actually being set aside, or are they budgeted to be but this isn't happening? one to address - before a bill comes in and you find yourself short! 
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 9500
    Other assets............................ 0[b]
    Total Assets............................ 9500[/b]
    [b]
    No Secured nor Hire Purchase Debts[/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Nationwide CC..................2175......25........0
    M & S CC.......................6025......108.......19.9
    Halifax CC.....................5391......244.......27.76[b]
    Total unsecured debts..........13591.....377.......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 1,937
    Expenses (including HP & secured debts). 1,662
    Available for debt repayments........... 275
    Monthly UNsecured debt repayments....... 377[b]
    Amount short for making debt repayments. -102[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 9,500
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -13,591[b]
    Net Assets.............................. -4,091[/b]

    Hi OP - first up I'm so sorry you've been having a tough time of it, and especially about the loss of your Mum. It's incredibly tough losing a parent and I don't truly think anyone can understand how hard it is unless they have also been through it - that's not in any way trying to stamp on anyone else's empathy, just that until you've been there you haven't done some of the trickiest stuff to know how much of an effect it has. Do remember that there is no time limit on grief. 

    I have made some general comments on the SOA above as to me there are definitely some tweaks/adjustments that can/need to be made there. 

    Well done for getting shot of the overdraft - you now need to work on really nailing the budget so that you don't need to go back into it again. A relatively small amount of additional earnings could make a big difference to your monthly position, and definitely follow up on what fatbelly said about that Halifax payment too as if that turns out to be incorrect that could make the difference between a shortfall and a break-even.

    Make a diary note now to re-check for any available 0% deals in a couple of months time - the (free) MSE Credit Club is great for this as it shows you your percentage chance of being accepted. It may well be that in your case, and with that Halifax rate being so high, even a low percentage likelihood of acceptance is worth an application - remember that if the percentage shows is 20% chance, that means that of every 10 people in your position who apply, 2 of them will get approved - so why shouldn't you be one of them? And also, don't worry if you can't get a high enough limit to shift a whole debt to - you don't need to. Concentrate on getting what you can on to 0%, when you can. 

    Don't underestimate what a good resource this board is - not only for advice, but also for support. There will always be someone here to listen, and there is a huge wealth of experience on offer to help you along the way. 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
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  • Hey @EssexHebridean

    Thanks for your reply and your comments, I have definitely taken them on board when looking at my budget. 

    I have started to do survey agains the last week and have already made some great progress on prolific, I also have an account on yougov although that is one that takes forever to get a payout for! I am sure i might hit that by the end of next year if I'm lucky, but I'll keep plugging away at it. I have also been selling some items and just this weekend have sold a jacket that I picked up on a whim and have only ever worn once, even though I love it it's not really my style sold it for £50, only a little less than I paid for it.

    The electricity is correct, I've only got a smallish one bed and even though we've had a bit of cold weather so far have not used the heating here. I am very mindful of how much electric I use as well and try my best to cut usage where I can, not to the point of any discomfort just thinking of simple changes I can make. I am on a flexi plan with octopus so I keep an eye each month to see if I am ever eating into my credit on the account and if I am I have space to make adjustments. 

    Mobile - It's a reasonably new contract so I've got a while yet until i can make any changes to this one, but it's definitely my choice to go sim only once the contract runs down. Hence choosing to upgrade recently to ensure I've still got a decent level of phone at the end of the contract. 

    Sky/Broadband - This includes my netflix access that is linked which I used to pay separately. Again a new contract when i moved into my flat so a while to wait out until the end of the contract.

    I very rarely buy clothes to be honest, that amount is a rough calculation of what I would maybe spend across the year split down. I would rather spend on a few decent items that I will get the wear out of for the value. 

    I take your point on the car maintenance and when i've done a new budget I did include more money towards that to ensure I am not shocked if i need a new tyre for example. 

    To update, I had a very frank and difficult discussion with my dad over the weekend after spending hours on the phone to Halifax, M&S and Stepchange some more helpful than others I will say. He has loaned me the money to pay off my Halifax card, but has said I only need to start paying back once I have cleared a decent amount from the M&S card. I am beyond grateful that he has been able to help me and it's definitely one weight off my mind. Whilst there are various things to think about with how to deal with the M&S card, I now have breathing space to be able to pay more off that card each other and still have more available to live with and also to save a small amount. 




  • Well done @emskibeach re difficult discussions & the subsequent help from your dad. What a big help! Hope you can now smash the rest of the debt quickly :) Have you considered switching bank accounts for the cash offers and other bits that they tend to offer like decent savings rates? I just got £175 from Barclays.
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