Statement of Affairs

Grumpelstiltskin

Baby formula, does your wife buy the most advertised  expensive brand?  This gives some idea of the costs of various brands.

Best baby formula milk brands 2024 and expert buying advice - Which?

Special dog food do you buy it from the vet or do you shop around online?

Post on this section to see if you can get advice about that.

Pets & pet care — MoneySavingExpert Forum

Grocery shopping do you buy 'brands ' or supermarket own brands?

This board can help you with saving money on groceries.

Old style MoneySaving — MoneySavingExpert Forum

MFWannabe

PCNSlayer said:

Hi all,

I have been a passive viewer of MSE for some time now but thought I should now become an active member to gain as much useful insight and helpful suggestions.

Attached below my SOA. 

Some background info. 

Our household is currently myself, my wife, our 2 year old, our 2 month old and our dog.

I am in full time employment, my wife is on maternity leave. 

2 cars, one is owned outright and one is 3 years into a 5 year HP. 

We have a dog who unfortunately is very ill hence the high vet/dog insurances. 

The full amount of excess money goes to overpayment of the credit cards. 

Welcome any comments. 

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... 2

Monthly Income Details

Monthly income after tax................ 3931

Partners monthly income after tax....... 616

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

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

Total monthly income.................... 4547

Monthly Expense Details

Mortgage................................ 791.3

Secured/HP loan repayments.............. 246.32

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

Management charge (leasehold property).. 45

Council tax............................. 186

Electricity............................. 86

Gas..................................... 86

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

Water rates............................. 33.98

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

Mobile phone............................ 72.22 - Are you in contract? If you are then change to sim only as soon as these end

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

Satellite/Cable TV...................... 38

Internet Services....................... 0

Groceries etc. ......................... 450

Clothing................................ 0

Petrol/diesel........................... 250

Road tax................................ 16.93

Car Insurance........................... 104.8 - wow this is expensive. Do you shop around at renewal time? 

Car maintenance (not including MOT)......... 19 - I doubt this is enough when you consider service, new tyres etc. Where is the cost for mot? 

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

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

Childcare/nursery....................... 306

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

Medical (prescriptions, dentist etc).... 13

Pet insurance/vet bills................. 118.17

Buildings insurance..................... 0

Contents insurance...................... 15.37 (includes buildings & contents)

Life assurance ......................... 60 (includes critical illness covers)

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

Presents (birthday, christmas etc)...... 100 - this could be reduced; your children are young and don’t need £1200 a year spending on them 

Haircuts................................ 20

Entertainment........................... 13.98 - what is this for? You need to account for family days out etc here 

Holiday................................. 0 - Do you not go on holiday? 

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

Savings................................. 400 - do you actually save this? 

Pet Food................................ 75 - if you buy this from vets you should be able to get cheaper online 

Total monthly expenses.................. 3560.32

Assets

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

House value (Gross)..................... 295588

Shares and bonds........................ 611.92

Car(s).................................. 9381

Other assets............................ 4500

Total Assets............................ 310080.92

Secured & HP Debts

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

Mortgage...................... -233,546..(791.3)....1.97

Secured Debt DFS.................. 774......(16.12)....0 - Is this really secured debt? Pay this one off after HSBC

Hire Purchase (HP) debt ...... 5524.08..(230.2)....6.8

Total secured & HP debts...... 6531.63

Unsecured Debts

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

Tesco Credit...................7921......92.72.....0

HSBC...........................198.93....12.78.....21.9 - Pay this off with your first month of money left over, you don’t need to pay interest if you have the money to pay it off 

Total unsecured debts..........8119.93...105.5

Monthly Budget Summary

Total monthly income.................... 4,547

Expenses (including HP & secured debts). 3,560.32

Available for debt repayments........... 986.68

Monthly UNsecured debt repayments....... 105.5

Amount left after debt repayments....... 881.18

Personal Balance Sheet Summary

Total assets (things you own)........... 310,080.92

Total HP & Secured debt................. -6,531.63

Total Unsecured debt.................... -8,119.93

Net Assets.............................. 295,429.36

Thanks all. 

Created using the SOA calculator at www.stoozing.com. 

I’ve made some comments above 
If you really have that much left over every month you need to start hitting those debts hard and getting rid of them 

Floss

£19/m for car maintenance wouldn't cover the cost of an annual service for 2 cars, never mind tyres / wiper blades etc.

You have £4,500 listed as "other assets" could you clarify that please? Is that your emergency fund?

PCNSlayer

Thanks all for the suggestion, agreed the car maintenance cost was low as it only counts for servicing of one car and no MOTs the second car is a little run around and doesn’t really get serviced. 

I will ago away and review the SOA and make more allowances for the more annual costs and go from there. 

Thanks again

Floss

PCNSlayer said:

... agreed the car maintenance cost was low as it only counts for servicing of one car and no MOTs the second car is a little run around and doesn’t really get serviced. 

False economy - are both cars under 3 years old? An MOT is £54.85 each year from 3 years after initial registration; assuming both cars need MOTs, from your £228 a year, that leaves £111 which doesn't cover my 2019 Hyundai i10's annual service at a local garage. And that is without replacing tyres / exhaust/ anything due on the service schedule.

Coffeekup

Hi and welcome to the forum.

I personally would pay that 21% c.card off, it's a small debt but you're paying interest on it and the few £ saved there in interest and payments can help pay off the other c.card.

Spending diaries can help for both you and your partner, made easier these days with a Google spreadsheets so you can both fill in when and where you spend. This will help figure out where money is going and is it worth it.

You're electric seems quite high for a duel fuel house, so I would look Into what's causing the usage shaving £25 a month off that should be reasonably easy unless you have some high consumption items.
Similar issue for gas, tweaking the thermostat a degree or two lower and not having the heating on when you are out the house or having the heating on with windows open is money spent, so that could come down £10-30 a month.

Picking up clothes/shoes on vinted is quick and easy. It's also a good way of selling on clothes/toys and making a bit of extra cash. Same goes for eBay.
As is charity shops, people donate perfectly good clothes and toys and you giving that product more use.

As you say birthdays and Christmas could come down a bit but I have no idea who and how many you buy for.
Set a budget for people's birthdays then times it by 2 (for their Christmas gifts), then add in mother's/father's day and Easter eggs or other regular gift buying events + bit for Christmas food and booze, put it in a separate savings account and you'll always have the money for someone's birthday etc when it comes round.

Good luck with getting your debt down, then as someone else said figure out where you're next LTV bracket is for a cheaper deal. Then if it's doable before your fixed rate finishes, I repay the mortgage and if any cash is spare save it.

Edit: Another thought... there is also some bank account switches where you can grab some quick cash. Also one or bank accounts give you cash back for paying your bills through them. It all adds up, some people on these forums make good money.

EssexHebridean

Clear the interest bearing debt in full ASAP - no sense in doing otherwise allowing you have the monthly surplus to allow it. 

Start budgeting for the things you don’t currently - clothes, holidays. (Even if you don’t go away on holiday as such, surely there are days out, trips to visit friends or family, that sort of thing?)

make sure that where you say you are budgeting monthly for annual spends, you really do. 

If you are paying car tax monthly, then instead pay upfront, and set aside the relevant amount each month going forwards ready to pay in full again next year. Same with car insurances - with your monthly surplus, it’s ridiculous paying more to make monthly payments. 

Mobiles - very high, already mentioned to go on to SIM only once contracts are up, and don’t just automatically replace phones at end of contract either - modern phones last far longer than the contract length.

I agree with the previous poster that said it was a false economy not servicing the second car. To all intents and purposes, failing to service a car that new is effectively treating it as “disposable” - as you will be dramatically shortening its lifespan. It might be one thing treating an old banger - that you intend to run into the ground, scrap and replace - like that, but to do it with a car that is practically brand new…just no! Start budgeting properly for car costs - so servicing, cleaning, consumables etc - and maintaining both cars properly too. (And remember as each car turns 3 years old you will need to factor in MOT Test costs too). 

kimwp

PCNSlayer said:

Hi @fatbelly, thanks for the reply....

As for the savings, the £400 is probably only more like £100-£150 savings and the rest for general expenses such as days out clothing etc. Unfortunately the car has just packed up and the washing machine followed it hence the savings were used for these occurrences!

We are aiming to overpay credit card as much as possible as maternity leave pay finishes in April hence we would be -£616 a month. 

The first paragraph (and a later comment about increasing your allowances for annual spends) makes me wonder if your SOA accurately represents reality - have you been through your statements or tracked your spending? It's only once you get to the nitty gritty that you can identify things you want to spend less on.

What's your reasoning for paying off as much as possible by April? Your income will reduce at that point, but your outgoings will remain the same as you won't have paid the debt off by then unless you can find another £780 a month. Depending on when the 0% offer expires, you'd be better to hold back from overpaying the 0% to give you a cushion when your income reduces - if you are worried about being short then. If your SOA is accurate, then you shouldn't really be worried and you should be aiming to pay off the debt as fast as is reasonable - but April will only be when you reduce debt payments, your living standards won't be affected.

(Definitely pay off the interest bearing debt asap)

hugheskevi

Our household is currently myself, my wife, our 2 year old, our 2 month old and our dog.

Monthly income after tax................ 3931

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

Fortunately we don’t have issues paying down the debt, the full £880 goes to overpayment of the CC. I was hoping for more insight with regards to expenditure against individual items and if I should be saving more than overpaying?

Based on your monthly income, your taxable income looks to be around £66,000?

If you can reduce your Adjusted Net Income to £50,000 then you become eligible for full Child Benefit. This would be worth around £2,220 per year for your 2 children. Even reducing it below £60,000 means you would become entitled to reduced Child Benefit.

The obvious way this could be achieved would be through a pension contribution, which would also benefit from higher rate income tax relief. To get £16,000 into a pension would require a net contribution of £9,600, after higher rate relief - less if your employer offers salary sacrifice pension contributions. 

You could then also benefit from Marriage Allowance, further reducing your income tax paid by £252 p/a

Taking the additional Child Benefit from the net pension contribution required and the gain from Marriage Allowance would see your income reduced by (£9,600 - £2,220 - £252) = £7,128. In return for this, you would have an additional £16,000 in your pension.

That is a lot of tax benefit and would roughly double the contribution straight-away, and so gives a strong incentive for pension saving.

Although with the Child Benefit taper threshold and higher rate tax threshold frozen, it would require discipline to maintain over time and might be too much of a stretch given your income, forthcoming partner income reduction, and debts at the moment, but could be a longer-term target as it is a huge incentive to be missing out on year after year.

sourcrates

Floss said:

PCNSlayer said:

... agreed the car maintenance cost was low as it only counts for servicing of one car and no MOTs the second car is a little run around and doesn’t really get serviced. 

False economy - are both cars under 3 years old? An MOT is £54.85 each year from 3 years after initial registration; assuming both cars need MOTs, from your £228 a year, that leaves £111 which doesn't cover my 2019 Hyundai i10's annual service at a local garage. And that is without replacing tyres / exhaust/ anything due on the service schedule.

It does depend on mileage, your environment, and the sort of journeys you undertake, but essentially, there is very little to service on a modern car, aside from an annual oil and filter change, cabin and air filters can go 50/60,000 miles between changes, spark plugs should last 100,000 miles, an exhaust 100,000 miles, brake pads 35/40,000 miles, tyres are dependant on your mileage, topping up fluids and checking ancillary belts is about all you need to do these days.

Unless tyres need replacing, any DIY home mechanic can keep there car on the road, service wise, for less than £100 a year, easy.