Advice for SOA

Ambyth

How do I get an accurate SOA? This is the recent result and it is sooooo far off correct. On a good month I get to around 10 days from payday before I'm using the credit card for basics.

With the buildings insurance (arrives Dec) and water rates (Mar and Sept), I pay on receipt. Currently by using C/C, which I want to stop.

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

Monthly Income Details[/b]
Monthly income after tax................ 1604
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 1604[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 440
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 108
Electricity............................. 33
Gas..................................... 49
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 21.5
TV Licence.............................. 0 (no tv licence)
Satellite/Cable TV...................... 0
Internet Services....................... 0 (I use unlimited phone data to stream services)
Groceries etc. ......................... 300 (this is includes everything: clothing, entertainment, etc)
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 80 (I've put the most it would cost for a full month of public transport (winter), summer is only a few pounds as I can walk)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 16.3
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 6.83
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 70[b]
Total monthly expenses.................. 1144.63[/b]
[b]

Assets[/b]
Cash.................................... 325 (had to use £1,400 savings due to recent emergency bill)
House value (Gross)..................... 110000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 110325[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 61780....(440)......5.39[b]
Total secured & HP debts...... 61780.....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Lloyds CC......................2471.83...65........0 (until Nov)
TSB cc.........................1121.76...72........24.95
NationW cc.....................1900......25........0 (until end 2027)
Hastings Loan..................5380.97...93.61.....14.23
TSB Loan.......................5664.24...199.3.....8[b]
Total unsecured debts..........16538.8...454.91....- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 1,604
Expenses (including HP & secured debts). 1,144.63
Available for debt repayments........... 459.37
Monthly UNsecured debt repayments....... 454.91[b]
Amount left after debt repayments....... 4.46[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 110,325
Total HP & Secured debt................. -61,780
Total Unsecured debt.................... -16,538.8[b]
Net Assets.............................. 32,006.2[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Dakota_Rose

Others more experienced will be along soon I’m sure, but the first thing I would suggest is to do a complete review of your spending so that you can make this accurate. Our first SOAs can often be a ‘wish’ or ‘supposed to be’ SOA rather than a true reflection of the actual amounts we are spending. Are you really spending £300 a month on groceries, clothing and entertainment for example? Or is that what you can ‘afford’ to spend on them and are going over each month? Do you really spend nothing on water?

Do you know for sure where every pound is going? By going through your bank records and receipts, you might be surprised how much small amounts here and there are chipping away from your income. You should do this, and then re-do your SOA being completely honest - warts and all. Only then can you start to tackle it and make a realistic budget plan moving forward.

foxgloves

Hi Ambyth,

That's good advice from @Dakota_Rose. SOAs are tricky to get right first time but in order to move forward, they need to reflect actual spending. This will involve going through your bank/credit card statements for the last 3 months to get absolutely as accurate figures as possible of what you are spending now. Once you have that, people will be able to help with suggestions.

I think while you are doing this, you need to separate out your spending on groceries, clothing & entertainment because they are 3 very different categories & it is impossible to see what you could potentially save with them all jumbled together into one monthly lump spend.

You have nothing for contents insurance which is a pretty essential category & nothing for presents. Do you never buy a gift?

Remember that at this initial stage your SOA is a statement of how you are spending now, then it can be worked up into a viable budget for moving forwards.

Good luck with it all....& it's a positive step that you've realised there's a problem & have come on here to start addressing it. We've all been in a similar position at one point.

F

Edited to say I've just noticed you have a mortgage but haven't listed any building insurance. Is this correct? I thought it was a condition of having a mortgage but I'm sure others will correct me if I'm wong.

ArtyJ931

First thought was £300 is not a realistic total spend on everything for an adult in the UK. Go through your bank statements for the last three months (or longer) to get an average of what you have spent on groceries, gifts, entertainment, holidays, clothing replacements, maintenance costs of a house or person (glasses, dentist etc).

Also you have no buildings or contents insurance and no water rates in.

ArtyJ931

also you have posted this in the diaries section rather than on the main board so it may not be seen by everyone who usually gives SOA advice

Ambyth

The housing insurance and water rates are paid when due (unfortunately by cc). If I paid water rates by DD Welsh Water want to take a lot more than my actual water usage costs me (metered).

I have started going through the last 3 months of my statements, and in by the end of the first statement I can see how I'm in this pickle!

FootyFanDan

Reading back through the statements can usually be a daunting but also eye-opening task but once you can see it in black and white where that money is going you are then able to hopefully start adjusting and getting an handle on the outgoings.

Dakota_Rose

https://forums.moneysavingexpert.com/discussion/comment/82120525#Comment_82120525

You probably know this now, but really you need to be putting an amount aside for this each month even if it’s only paid annually. They aren’t surprise payments, so save them monthly as if you were paying out a direct debit. We call those sinking funds - saving ahead in instalments for costs that need to be budgeted for.

Blackcats

hello and welcome to this lovely, helpful community.

I echo what others have said - basing your SOA on real spend figures will be eye opening but really helpful.

With water and insurance you could work out and include in your SOA the annual payment divided by 12 so you can at least see the affect they have on your monthly costs. You can eventually get into a position where you can avoid using the credit card.

Also, I agree that food is a separate budget to clothes etc. food is essential and clothes are more of a discretionary spend.

There is a grocery challenge on the Old Style board - lots of great recipes, hints, tips and inspiration.

13thlegion

2 ways to get accurate data.

First look back. Get the statements for your bank accounts and CCs for the past few months (or whole of last year for super detail) and go through line by line to see where your money actually goes.

Second, keep a spending diary. Write down every spend for a couple of months, what it is, how much, when, where etc.

Armed with this info you can create an accurate budget. It still takes a while to get settled into it.

To echo something from above. Sinking funds changed my life. Popping a little away for as many different things as you can think of (and then some more as they come into the light of day) eases so much pressure. E.g. Each month I put away £10 for a washing machine. There is nothing wrong with my washing machine but one day their will be and it won't upset my month when it does. Same for car tyres, MOT, Xmas, shoes, holidays, phones, emulsion paint for when my wife will want to redecorate a room. The list goes on and on.

RAS

It doesn't matter whether water is on DD or metered, you need to make the relevant allowance for the cost in your SOA. And for all the other things that 13thlegion mentioned.

You've got housing at a fairly low cost but your income is also low and isn't sufficient for non-mortgage costs. Any chance of increasing income? Any chance of taking a lodger? What's the likely rate in your area? The rent a room scheme allowance if £7500 tax free but that includes all costs like the lost single person CT allowance, increased utilities. Nothing to say you have to offer a full year's lodging.

Do check Welsh occupancy rules on lodgers as they may be different from English ones.