Help me with getting debt free :-)

Brie

To do a budget properly it's best to look at at least 2 months bank statements and take every single item and allocate it to a category.  With 2 or 3 months you can then use the average for each category.  And maybe round every thing up rather than down?  i.e. I'm sure a TV licence isn't £14 but £14 and change.  This may help you account for the missing £200.  And well done on getting an extra £800 income going forward.

Is the £50 emergency fund actually going into a savings account somewhere?  Otherwise it may get nibbled away at.  Maybe combine this with your car replacement fund?  And up it to £100?  £200? Or?

Are most of your debts at 0% interest?  You do show the Tesco at 21% which is the one to hit first if that's the only one with interest.  If there is in fact another that is higher then attack that one instead.  My opinion is that the very and Next debts should be paid off, maybe leaving the accounts open only if you get good offers to really needed items.  And then ensuring that they are always paid in full each month.  Anything charging you interest is you losing money so you need to ensure that is minimised.  Ultimately you should aim at having 1 card that is used each groceries and other basics and paid in full each month.

But the situation doesn't look horrible, I've seen much worse.  In fact I've had much worse myself!!  With the new extra income you could potentially clear all your debts in about 10 months and then really start saving for that new to you car!

kimwp

Are all the aprs apart from the Tesco debt really zero?

If you are going to need a car soon, I'd pay the minimums to the debts while you save (hard) for the car.

I agree with the others, you will be in a much better place with your finances if you have an accurate understanding of your spends, your SOA feels a bit too estimate-y at the moment 

ManyWays

The clothes looks a lot too low. 
Are the kids not getting any pocket money? 

Emmia

cheesecake88 said:

Emmia said:

cheesecake88 said:

Emmia said:

What does £120 a month entertainment cover? £110 on mobiles seems high - how many phones does this cover? Are you paying off handsets as part of a contract? Or are you out of the minimum term so the handset(s) are paid off?

£120 entertainment. 

This is an estimate. My partner takes the children out every Saturday, mostly swimming sometimes the cinema etc. Swimming is only around £15 but cinema is a little bit more expensive so I put £120 to cover everything. 

£110 is steep for mobiles. Three are sim only for the children, Me and Other half have a £40 contract each. However, one of the expensive ones is finishing in September so I can change this to sim only. 

You need to be precise about the "entertainment" I suspect it is imprecision which is leading to you leaking £1k a month across various categories.

£800 on the £1000 comes from increasing my wages. I haven't had that income previously. 

You have £1.2k left over each month if you minus your known expenses from your income (that's without your pay rise) - but you have unsecured debts of £7k 

So what have you spent £7k more than you earn on? I expect if you tot everything up properly that you'll find your groceries are more than £800 - perhaps that's just the weekly shop that doesn't include "top up shops" or "lunch" for any of you?

Next and Very (£2,500) are  presumably clothing, which I think shows the clothing budget is off... If you've run that up in a year (for example), you're spending an extra £200ish per month, every month over your budget.

I think you're in a great place to fix this quickly, but that probably means spending time forensically analysing your past and current spending.

Myci85

Mobiles, you can get £10 pm sim with giffgaff that gives plenty of data, if you all changed to that, you'd more than half your mobile amount. 
Your energy payment looks very high to me, are you paying off debt or are you really using that much electricity?
People saying clothing looks low, but in our household clothes are bought when needed, not when wanted, unless kids are using their own money, so we definitely don't buy new stuff often. 

kimwp

Emmia said:

cheesecake88 said:

Emmia said:

cheesecake88 said:

Emmia said:

What does £120 a month entertainment cover? £110 on mobiles seems high - how many phones does this cover? Are you paying off handsets as part of a contract? Or are you out of the minimum term so the handset(s) are paid off?

£120 entertainment. 

This is an estimate. My partner takes the children out every Saturday, mostly swimming sometimes the cinema etc. Swimming is only around £15 but cinema is a little bit more expensive so I put £120 to cover everything. 

£110 is steep for mobiles. Three are sim only for the children, Me and Other half have a £40 contract each. However, one of the expensive ones is finishing in September so I can change this to sim only. 

You need to be precise about the "entertainment" I suspect it is imprecision which is leading to you leaking £1k a month across various categories.

£800 on the £1000 comes from increasing my wages. I haven't had that income previously. 

You have £1.2k left over each month if you minus your known expenses from your income (that's without your pay rise) - but you have unsecured debts of £7k 

So what have you spent £7k more than you earn on? I expect if you tot everything up properly that you'll find your groceries are more than £800 - perhaps that's just the weekly shop that doesn't include "top up shops" or "lunch" for any of you?

Next and Very (£2,500) are  presumably clothing, which I think shows the clothing budget is off... If you've run that up in a year (for example), you're spending an extra £200ish per month, every month over your budget.

I think you're in a great place to fix this quickly, but that probably means spending time forensically analysing your past and current spending.

I think OP is saying that until very recently, their income was £800 less than it is in the SOA. 

So that leaves £200 spend in addition to the expenses in the SOA, which would quite easily disappear with a family of five who isn't keeping an eye on spend. Plus the 7k of debt of course, we don't know how long it's taken to accumulate that, but again that could be an easily lost/accrued over 3-4 years with a big family - school trips, family days out, new sofa. The reality is, with this income and this size of family, unless naturally very frugal, attention needs to be paid to what is being spent to prevent debt.

Emmia

kimwp said:

Emmia said:

cheesecake88 said:

Emmia said:

cheesecake88 said:

Emmia said:

What does £120 a month entertainment cover? £110 on mobiles seems high - how many phones does this cover? Are you paying off handsets as part of a contract? Or are you out of the minimum term so the handset(s) are paid off?

£120 entertainment. 

This is an estimate. My partner takes the children out every Saturday, mostly swimming sometimes the cinema etc. Swimming is only around £15 but cinema is a little bit more expensive so I put £120 to cover everything. 

£110 is steep for mobiles. Three are sim only for the children, Me and Other half have a £40 contract each. However, one of the expensive ones is finishing in September so I can change this to sim only. 

You need to be precise about the "entertainment" I suspect it is imprecision which is leading to you leaking £1k a month across various categories.

£800 on the £1000 comes from increasing my wages. I haven't had that income previously. 

You have £1.2k left over each month if you minus your known expenses from your income (that's without your pay rise) - but you have unsecured debts of £7k 

So what have you spent £7k more than you earn on? I expect if you tot everything up properly that you'll find your groceries are more than £800 - perhaps that's just the weekly shop that doesn't include "top up shops" or "lunch" for any of you?

Next and Very (£2,500) are  presumably clothing, which I think shows the clothing budget is off... If you've run that up in a year (for example), you're spending an extra £200ish per month, every month over your budget.

I think you're in a great place to fix this quickly, but that probably means spending time forensically analysing your past and current spending.

I think OP is saying that until very recently, their income was £800 less than it is in the SOA. 

So that leaves £200 spend in addition to the expenses in the SOA, which would quite easily disappear with a family of five who isn't keeping an eye on spend. Plus the 7k of debt of course, we don't know how long it's taken to accumulate that, but again that could be an easily lost/accrued over 3-4 years with a big family - school trips, family days out, new sofa. The reality is, with this income and this size of family, unless naturally very frugal, attention needs to be paid to what is being spent to prevent debt.

The SOA shows a current income of:

Monthly Income Details[/b]

Monthly income after tax................ 1960 (this will increase in 5 months to 2156)

Partners monthly income after tax....... 1870

Benefits................................ 241 Child Benefit

Other income............................ 0[b]

Total monthly income.................... 4071[/b][b]

£1960 + £1870 + £241 = £4071

When their pay rise comes through, the monthly household income will be £4267

£2156 + £1870 + £241 = £4267

Their "essential expenditure" (before debt repayment) is £2808

£4071 - £2808 = £1263 (before pay rise)

£4267 - £2808 = £1459 (after pay rise)


If the numbers are correct, they have substantially more than £200 a month "spare"

kimwp

cheesecake88 said:

800 has come from going from part time to full time in my job. The extra 200 I was spending on silly things like eating out and games for the children. We are not going to be eating out anymore. We want to try and save some money while repaying our debts so we can save for a new car. I am just looking for a good plan to do this. 

@Emmia. So the debt accrued when OPs income was £800 less than in the SOA. 

Emmia

kimwp said:

cheesecake88 said:

800 has come from going from part time to full time in my job. The extra 200 I was spending on silly things like eating out and games for the children. We are not going to be eating out anymore. We want to try and save some money while repaying our debts so we can save for a new car. I am just looking for a good plan to do this. 

@Emmia. So the debt accrued when OPs income was £800 less than in the SOA. 

That's still a £400 surplus per month. I think the OPs numbers are a bit vague overall, and they don't really have a handle on their spending. 

Whatever. In theory the OP has a good amount of surplus now to pay down their debt.

Smudgeismydog

As other posters have said, this can be sorted, although I agree it’s worth reviewing bank statements to establish how accurate some of your figures are.

I agree with Myci85, your electricity looks very high. The kids are old enough to have the conversation about turning things off. Do you use a tumble drier or line dry clothes? Do you have a cheaper rate for overnight electricity use? If so, can you e.g. delay the washing machine to start in this window? Do you batch cook? This can help with both the electricity and grocery budget. The kids can be involved in meal planning and cooking which helps get them on board.

Well done for addressing this and posting.