Advice from Your Experience ?

EssexHebridean

Loui22 said:

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

Household Information[/b]

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

Number of children in household.........  3

Number of cars owned....................  1[b]

Monthly Income Details[/b]

Monthly income after tax................ 2008

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

Benefits................................ 899

Other income............................ 0[b] No contribution from the children’s Dad here? That needs sorting - has an agreement been made that he’s not keeping to? 

Total monthly income.................... 2907[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

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

Rent.................................... 850

Management charge (leasehold property).. 0

Council tax............................. 106

Electricity............................. 60

Gas..................................... 120 The electric and gas are on the high side - but not wildly so.  Are sure you check readings against bills to ensure that you are being charged accurately, and also do a review of where your account balance is to see if you have more credit there than needed/expected for the time of year. 

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

Water rates............................. 54 Is this metered? If not it could be worth chatting to local friends with a similar family set up to see how your bill compares with theirs - if it IS metered then have a think about how you may be able to use less. 

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

Mobile phone............................ 30 How many phones? If 1, then it can be reduced when your contracts ends. If more than 1, then some small reduction may be possible. 

TV Licence.............................. 12 This is a bit of a red flag - it’s not been that low for a lot of years and is now a little over £14 a month. Have you guessed at the spends you have entered here? If so, I think you need to go back over things and find actual figures - else you are setting yourself up to fail with your budget. 

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

Internet Services....................... 25

Groceries etc. ......................... 400 OK - you have checked this and it is what you spend - food, drinks, toiletries, cleaning materials? If so, great - but just be sure that it isn’t just the monthly total of what you spend on your main weekly shop, without taking into account top-up shops. For a family your size these days that is an achievable but fairly frugal groceries total - however, it’s unusual to see that sort of spend from someone in your position, so definitely needs checking! 

Clothing................................ 20 I’d agree this is low - while you can get by with just a basic “socks & pants” budget for a while, the children are going to need more stuff, at least the oldest one even if hand me downs work from there! 

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

Road tax................................ 19.25

Car Insurance........................... 50.97

Car maintenance (including MOT)......... 20 Where is this being saved - you don’t show any cash assets? Also - with an MoT Test being around £50, and a service to think about as well, there is no way this covers everything. Remember also tyres, wiper blades, screen wash, cleaning… 

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

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

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

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

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

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

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

Contents insurance...................... 0 OK - before you do anything else st all, get this sorted - no insurance is a complete false economy - what happens if you get home later today with the children to find your home burned to the ground - you have just the clothes on your back - how are you rebuilding your lives? You can get basic cover contents insurance for under £10 a month even now - just get it sorted! 

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

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

Presents (birthday, christmas etc)...... 30 You can cover all birthday and Christmas presents, plus extra spent on food for those occasions, with £360 a year, for the children and yourself, yes? Are you certain that is achievable?

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

Entertainment........................... 40

Holiday................................. 0  You never go anywhere at all? Not even a weekend trip visiting family or friends? 

Emergency fund.......................... 0 Defined to start saving something here. 

Kids Drama.............................. 60

Kids Dancing............................ 50[b]

Total monthly expenses.................. 2087.22[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 0

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

Car(s).................................. 5000

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

Total Assets............................ 5000[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

M&S Card.......................616.83....100.......25

Sainsburys loan................3258.59...182.......10

Virgin Card....................3999.69...150.......24

Solicitor......................4000......0.........0[b]

Total unsecured debts..........11875.11..432.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,907

Expenses (including HP & secured debts). 2,087.22

Available for debt repayments........... 819.78

Monthly UNsecured debt repayments....... 432[b]

Amount left after debt repayments....... 387.78 OK - that is a decent surplus you’re showing there - amounting to £4,600 a year - so what are you currently doing with that sum? See below for more on this…! [/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 5,000

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

Total Unsecured debt.................... -11,875.11[b]

Net Assets.............................. -6,875.11[/b]

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

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

See above in bold for comments.


First step then- contents insurance! Get that sorted then come back to this. 

So - that surplus, you don’t have that do you, after all, if you did then tackling that debt would be easy. As much as anything that’s what tells us that there is a lot of guesswork in the SOA. Second step then, go back over it carefully, armed with a year’s worth of bank and card statements, and get actual, accurate spends listed so you know where you really stand. My guess is that surplus is going to shrink a LOT - which is fine, the important thing is knowing how much you really should have left over after the stuff you have to spend on. Once you have that in place, I’d suggest a spending diary - keeping track of everything you spend on for st least a month, as that might let you further refine some of those categories. 

I think you need to spend at least 6 months learning to live to a proper budget, and ensuring that money is set aside for the big one offs like Christmas, before you even think about what to do about the debts. The solicitor is going to have to accept that you will repay, but only at a relatively small amount per month. (If there may be a need to return to court to sort out financial contributions then you do need to keep them onside. 

One thing you can do with the cards is so long as you are absolutely not spending on them, adjust the monthly payment to be a little above the current minimums - say just rounded up to the next £5 or £10. That way you will actually be making small overpayments without even noticing, it makes budgeting easier, and you will make a massive difference in the speed of clearing the balances. You must keep an eye for any paperwork arriving saying the minimum percentage is being increased though, and NEVER spend on a card you are dealing with this way.