an ever decreasing circle of debt

redrolo

squirrel_pigeon wrote: »

Have a chat with one of the debt advice agencies first. They have your best interests at heart whereas the bank will more than likely offer you a loan which unless you're very strict with yourself and your spending, you won't be able to afford. Take it from someone who knows...

When you talk to someone and get it all out in the open, you'll feel much better. They may even be able to help you manage your budget so that you can afford your contractual payments.

Good luck
xxx

I have a good relationship with my branch manager of halifax. Now I know why!!:rolleyes: I will go an speak to someone about it. Thanks for your support.

stapeley

No advantage sending car back , they are often sold at auction at a huge loss and you would still owe the differance . But check the agreement , find out what you owe on it , can you clear it selling privately ?

mum2one

try keeping a spending diary for a week, and haveanotherlook at SOA - list every £1.00, balance on cards, etc

The moreyou break down your SOA- may be able to shave some off x

neverdespairgirl

redrolo wrote: »

A summary of our SOA:
Income - £4022 per month (inc £550 rent from second home) Can't sell it as redemption penalty is £8000 for next 12 months

On the plus side, your income is high - that does give you room for cutting outgoings. Is the rent of £550 before or after tax, though?

At the moment, you seem to have outgoing which are £224 higher than income. That has to change.

redrolo wrote: »

Outgoings
Home - 2286 (mortgages 1800)

Is the other amount after the mortgage for bills, etc? Better if you can break it down

redrolo wrote: »

Eating - 550

For 3 of you? That's really very high, you can cut a third of it.

redrolo wrote: »

Haircuts, dental insurance, contact lenses £70 per month

You need to cut this down.

redrolo wrote: »

Big one offs (birthdays/xmas) 83

Can you halve this, for the moment?

redrolo wrote: »

clothes daughter 40

Can you halve this, for the moment? It really doesn't need to cost that much to dress a toddler.

neverdespairgirl

By the way, are you sure your SOA is complete? You must get child benefit, I presume? What about childcare costs?

When it comes to the 2nd home, the one you rent out, what is the value, the equity, and the mortgage payments on that?

The debt repayments you list - what is the APR, and are you only paying the minimum on some of them?

redrolo

neverdespairgirl wrote: »

On the plus side, your income is high - that does give you room for cutting outgoings. Is the rent of £550 before or after tax, though?

At the moment, you seem to have outgoing which are £224 higher than income. That has to change.



Is the other amount after the mortgage for bills, etc? Better if you can break it down

For 3 of you? That's really very high, you can cut a third of it.

You need to cut this down.

Can you halve this, for the moment?

Can you halve this, for the moment? It really doesn't need to cost that much to dress a toddler.

Thanks for the reply. The biggest issue I have is my OH if I am honest. He M&D are loaded and she constantly goes out with them when I am working. She spends money we haven't got on impressing them. She will not talk to them about how serious the problem we have is. I have sat down several times but she refuses to believe there is an issue, as she believes her pending promotion at the end of the year will solve everything.

The other house is rented out. We get 550 after tax for it. The value is £190k and we have £40k of equity in it. The mortgage is with Edeus, and is £833 a month. The problem is that the house is in the middle of the country side in a sort after buying area. It is isolated, so is not great rental. The ERP is £8k for the next 12 months.

Thanks for listening. I, like all of us, want to do everything for the safety and security of our families. I am just at a loss to how it will improve with the £1k a month debt repayments. I have no family to speak to about it since my mum passed away and I put my dad an EMI home.

mum2one

It sounds like you have not had an easy time one way and another, I always think of people who are on here as friends I just havent got round to meeting.

Maybe if your wife saw the thread and your concerns re the future,( at one time or another weve all been guilty of the blinkered look, ), it may be the starting point that you can both sit down and go through figures.

I would suggest doing a more detailed SOA, (not that were being nosey), but as the old saying goes - something about a new set of eyes......

My sin, if the going gets tough I just want to escape, usually via a trip to the travel agents.

I wouldnt mind, but I didnt go abroad to I was 28, but have made up for it since. x

redrolo

mum2one wrote: »

It sounds like you have not had an easy time one way and another, I always think of people who are on here as friends I just havent got round to meeting.

Maybe if your wife saw the thread and your concerns re the future,( at one time or another weve all been guilty of the blinkered look, ), it may be the starting point that you can both sit down and go through figures.

I would suggest doing a more detailed SOA, (not that were being nosey), but as the old saying goes - something about a new set of eyes......

My sin, if the going gets tough I just want to escape, usually via a trip to the travel agents.

I wouldnt mind, but I didnt go abroad to I was 28, but have made up for it since. x

I went through the budget planner Martin has on here. It is very detailed. I just didn't want to post it completely as it seem extensive!!:o

Mortgages 1808 (975 to Abbey on current house (fixed at 4.99 for next 14 months), rest Edeus on other house (.25 above BoE)
B&C insurance across both houses £30
Overdreft interest £39 per month
Council tax 168
Water 27 (on meter)
Gas 75 (with Scottish power, now switching to BG)
Electric 25 (as above)
Home phone (inc line rental) 25 per month
Internet 16 (BT)
TV licence (11)
Wifes phone (20)
Food shopping (inc toilletries etc) 70 pw
Food for work (I each with clients and contractors) 20
Food for work for wife 10
Car insurance on wifes car 35 pm (am changing in March to 20 pm)
Tax 10 pm
Diesel 25 pw
Car HP 320
Credit cards - 450pm (2 x virgin 0% next 12 months(total balance 8.5k), 1 x Egg 6 months 0%(1.5k)
Halifax loan at 6.9% outstanding 6.8k 24 months left
20 in child trust fund
20 in emergency fund
Child care 69 pm (this goes to nothing in march as daughter will get government funding)
Sky 28 pm (this inc multi room). Current house has not terrestial aerial, which would be £400 plus, so sky was the cheaper option.
Dental insurance for OH and me 30 per month. We both have really poor teeth
Hair 30 per month for the 3 of us
Contact lenses 19 pm
Clothes for all of us 50pm. This tends to all go on daughter as she is shooting up rapidly
One offs (at xmas time/birthdays) would work out at 83.33 pm.

Sorry its so long, but you did ask!!

Thank xx

neverdespairgirl

redrolo wrote: »

Thanks for the reply. The biggest issue I have is my OH if I am honest. He M&D are loaded and she constantly goes out with them when I am working. She spends money we haven't got on impressing them. She will not talk to them about how serious the problem we have is. I have sat down several times but she refuses to believe there is an issue, as she believes her pending promotion at the end of the year will solve everything.

I know it's really easy for me to say, and hard for you to do, but I think you really need to sit down and discuss it. Maybe print out your initial SOA, and say you are getting deeper into debt at your current rate of spending. The extra £600 a month will help, but given your current SOA will only leave c. £350 for extra debt repayment.

redrolo wrote: »

The other house is rented out. We get 550 after tax for it. The value is £190k and we have £40k of equity in it. The mortgage is with Edeus, and is £833 a month. The problem is that the house is in the middle of the country side in a sort after buying area. It is isolated, so is not great rental. The ERP is £8k for the next 12 months.

At the moment, then, you are getting £550 and spending £833, plus running costs? How come? I don't think anyone expects house prices to rise much over the next year or two, so you are really subsidising someone else's living there.

Perhaps you should consider selling it? That would free up equity to pay off your debts. It would make a massive difference, as you would not only be a minimum of £300 a month better off on the mortage / rent issue, you would also be paying back less as lots of your debt would have been cleared.

redrolo wrote: »

Thanks for listening. I, like all of us, want to do everything for the safety and security of our families. I am just at a loss to how it will improve with the £1k a month debt repayments. I have no family to speak to about it since my mum passed away

I'm sorry to hear that - you must feel very isolated. Hope these boards can help!

wydsiwyrg

Hi there Redrolo.. hope I can help some - well done on having a great income, but obviously some of these outgoings need to come down.. I'll have a go at suggesting a few things!

Mortgages 1808
B&C insurance across both houses 30
Overdraft interest 39
Council tax 168
Water 27
Gas 75
Electric 25
Home phone 25

-- Can you take calls using your mobile phone free minutes and then cut this to the cheapest BT tarriff (10.50)?

Internet 16
TV licence 11
Wifes phone 20

-- How long are you tied into this? If you are disciplined when you finish go for a cash back deal, they can be very cost effective as long as you go with a reputable company.

Food shopping 70 pw

-- can this be cut? We currently spend 20pw on two of us. Try planning meals for the whole week and home cooking exclusively (take the time you save from not watching TV! ) If you could cut to 40pw (go for no luxuries); that'll net you 120pm

Food for work (I each with clients and contractors) 20

-- i guess this can't be cut? If you can, can you take packing up on days that you don't have meetings? If it's eating with clients over meetings can you claim it back as expenses?

Food for work for wife 10

-- get cheap packing up. Bread with pate and fruit can cost less than this per week; include it in your food shopping bill.

Car insurance on wifes car 35 pm
Tax 10 pm
Diesel 25 pw
Car HP 320
Credit cards - 450pm (2 x virgin 0% next 12 months(total balance 8.5k), 1 x Egg 6 months 0%(1.5k)
Halifax loan at 6.9% outstanding 6.8k 24 months left
20 in child trust fund

-- don't save while you have debt, can you stop this for now, and make payments in the future?

20 in emergency fund

-- as above.

Child care 69 pm (this goes to nothing in march as daughter will get government funding)
Sky 28 pm (this inc multi room). Current house has not terrestial aerial, which would be £400 plus, so sky was the cheaper option.

-- How about going really radical and getting rid of the TV for a few months?!! The other option is cancel the sky subscription and just use the box with the satellite, you'll get all the normal channels (1-5) plus Film Four and a lot of others (check out freesat.co.uk); you won't need to do a thing other than cancel sky and remove the card.

Dental insurance for OH and me 30 per month

-- can you ignore this for 6 months then start up again?

Hair 30 per month for the 3 of us

-- get cheaper haircuts! Don't know where you live, but in our area, and more so in London there are plenty of places where you can get kids haircuts for £3 and adult haircuts for £5. Else, grow your hair - or buy a pair of clippers and scissors and start doing it at home. £30 pm is a lot for hair cuts.

Contact lenses 19 pm

-- get them cheaper. I pay £79 per year for mine, and they are very specialised (continuous wear toric). If you have your prescription head over to http://www.visiondirect.co.uk, they saved me a fortune on contact lenses.

Clothes for all of us 50pm. This tends to all go on daughter as she is shooting up rapidly

-- can you forego this for a few months, what age is your daughter? Can you buy ahead and let her wear big clothes for a while?

One offs (at xmas time/birthdays) would work out at 83.33 pm.

-- Buy smaller presents. Suggest family secret santa. A gift budget of £20pm should be more than manageable in that case (depending how big and close family you have? how much are you spending on average on a present?)



Hope this helps,
Try to cut back as much as possible, you really will reap the benefits in the future,

Tim