Newbie SOA Can anyone help?

Izzy44

I desperately need to make drastic changes in how I deal with my finances – basically I’m useless. Today has to be the day I start to make a change – I’m completely letting my husband and children down.
Today my husband went to the supermarket and was unable to pay for our shopping as his debit card was declined (joint account card). He had no idea that there were no funds available in our account and obviously he was very embarrassed. I have to admit that the overspending that has got us into this situation is my fault entirely – as with many others, shopping seems to give me a temporary lift when I’m feeling low – of course this doesn’t last and I end up feeling worse. Although I realize this I am still unable to stop. I won’t bore you with all the details but I do have a problem with my image, and buying clothes, make up and having botox (yes I am a fool!) give me the confidence to leave the house when somedays I wouldn’t. I’m currently studying a science degree full time which I am now half way through – this puts more stress on us as a family as we are dependant really upon my husbands income alone. I do get a maintenance grant – just had a payment of around £2000 which I had intended to use to pay off one of our credit cards. However I used around £1000 for this and have spent the rest. I am due another payment of the same amount in March.

I have listed below all our incomings and outgoings in the hope that someone might be able to offer me some advice. I have added up the amount we spent on food at our local supermarket this month and although we are a family of 5 it is ridiculously high. How much should I allow for this per month do you think?

I should add that I’ve asked my husband today to take my debit card from me and hide it so that I can’t use it but he’s reluctant to do so. As for our credit cards, around 6 months ago I contacted the credit card companies and asked them to close the accounts as we no longer wanted to use the cards but would continue to make monthly repayments. Typically though, the monthly repayments are barely making a dent as most of it goes on interest.

I don’t know how to start getting us out of this mess and would really appreciate any advice if anyone has time to take a look. Thankyou.

Monthly Incommings:

Child Tax Credit 143.12
Child benefit 169.20
Wage 1450.00

Total = £1762.20

Monthly outgoings:

Rent £280
Council Tax £49
TV licence £11.61
Water £16.50
RAC £5.25
Electric & gas £71 (recently changed as checked moneysupermarket for best rates)
TV, broadband and phone – usually around £75 (99.84 this month though)
Car insurance £49.54
Mobile top up £10
Food £530 this month
Rail travel £110.40 (4 journeys /week @ £6.90)
Petrol £40.00
Swimming (in school time) £16.00
Brownies £12
Dancing £36
Cheer leading £12
Music lessons £35.20

Loan £182.00
River Island store card £7.09
Tesco mastercard £28.76
Tesco mastercard £96.00
Virgin card £110.86
Next account approx £70
Overdraft fee around £20

Total outgoings = 1874.21

Total Debts
Virgin credit card £3835.94
Tesco mastercard £1687.83
Tesco mastercard £3226.49
River Island store card £177.22
Next £700 ish
Overdraft £3000
Loan now owe £9131.74 (took out £12000 over 8 years) (total repayable £17552.64)

roomontheend

You have come to the right place. Try looking at the old style board to help you reduce your food bill. Look at the snowball calculator at http://www.whatsthecost.com/snowball.aspx it's fab. Your store cards will be chaging you very high interest so pay them off first or better still move them to a 0% by balnce transfer. If you can't get any new cards move them to the lowest interset rate of one of your current cards.
Hope this helps
ROTE

masterkay

Izzy44 wrote: »

I desperately need to make drastic changes in how I deal with my finances – basically I’m useless. Today has to be the day I start to make a change – I’m completely letting my husband and children down.
Today my husband went to the supermarket and was unable to pay for our shopping as his debit card was declined (joint account card). He had no idea that there were no funds available in our account and obviously he was very embarrassed. I have to admit that the overspending that has got us into this situation is my fault entirely – as with many others, shopping seems to give me a temporary lift when I’m feeling low – of course this doesn’t last and I end up feeling worse. Although I realize this I am still unable to stop. I won’t bore you with all the details but I do have a problem with my image, and buying clothes, make up and having botox (yes I am a fool!) give me the confidence to leave the house when somedays I wouldn’t. I’m currently studying a science degree full time which I am now half way through – this puts more stress on us as a family as we are dependant really upon my husbands income alone. I do get a maintenance grant – just had a payment of around £2000 which I had intended to use to pay off one of our credit cards. However I used around £1000 for this and have spent the rest. I am due another payment of the same amount in March.

I have listed below all our incomings and outgoings in the hope that someone might be able to offer me some advice. I have added up the amount we spent on food at our local supermarket this month and although we are a family of 5 it is ridiculously high. How much should I allow for this per month do you think?

I should add that I’ve asked my husband today to take my debit card from me and hide it so that I can’t use it but he’s reluctant to do so. As for our credit cards, around 6 months ago I contacted the credit card companies and asked them to close the accounts as we no longer wanted to use the cards but would continue to make monthly repayments. Typically though, the monthly repayments are barely making a dent as most of it goes on interest.

I don’t know how to start getting us out of this mess and would really appreciate any advice if anyone has time to take a look. Thankyou.

Monthly Incommings:

Child Tax Credit 143.12
Child benefit 169.20
Wage 1450.00

Total = £1762.20

Monthly outgoings:

Rent £280
Council Tax £49
TV licence £11.61
Water £16.50
RAC £5.25
Electric & gas £71 (recently changed as checked moneysupermarket for best rates)
TV, broadband and phone – usually around £75 (99.84 this month though)
Car insurance £49.54
Mobile top up £10
Food £530 this month
Rail travel £110.40 (4 journeys /week @ £6.90)
Petrol £40.00
Swimming (in school time) £16.00
Brownies £12
Dancing £36
Cheer leading £12
Music lessons £35.20

Loan £182.00
River Island store card £7.09
Tesco mastercard £28.76
Tesco mastercard £96.00
Virgin card £110.86
Next account approx £70
Overdraft fee around £20

Total outgoings = 1874.21

Total Debts
Virgin credit card £3835.94
Tesco mastercard £1687.83
Tesco mastercard £3226.49
River Island store card £177.22
Next £700 ish
Overdraft £3000
Loan now owe £9131.74 (took out £12000 over 8 years) (total repayable £17552.64)

Your text on my browser is too small to read. I'm reposting it so I can read it.

masterkay

Izzy44 wrote: »

I desperately need to make drastic changes in how I deal with my finances – basically I’m useless. Today has to be the day I start to make a change – I’m completely letting my husband and children down.
Today my husband went to the supermarket and was unable to pay for our shopping as his debit card was declined (joint account card). He had no idea that there were no funds available in our account and obviously he was very embarrassed. I have to admit that the overspending that has got us into this situation is my fault entirely – as with many others, shopping seems to give me a temporary lift when I’m feeling low – of course this doesn’t last and I end up feeling worse. Although I realize this I am still unable to stop. I won’t bore you with all the details but I do have a problem with my image, and buying clothes, make up and having botox (yes I am a fool!) give me the confidence to leave the house when somedays I wouldn’t. I’m currently studying a science degree full time which I am now half way through – this puts more stress on us as a family as we are dependant really upon my husbands income alone. I do get a maintenance grant – just had a payment of around £2000 which I had intended to use to pay off one of our credit cards. However I used around £1000 for this and have spent the rest. I am due another payment of the same amount in March.

I have listed below all our incomings and outgoings in the hope that someone might be able to offer me some advice. I have added up the amount we spent on food at our local supermarket this month and although we are a family of 5 it is ridiculously high. How much should I allow for this per month do you think?

I should add that I’ve asked my husband today to take my debit card from me and hide it so that I can’t use it but he’s reluctant to do so. As for our credit cards, around 6 months ago I contacted the credit card companies and asked them to close the accounts as we no longer wanted to use the cards but would continue to make monthly repayments. Typically though, the monthly repayments are barely making a dent as most of it goes on interest.

I don’t know how to start getting us out of this mess and would really appreciate any advice if anyone has time to take a look. Thankyou.

Monthly Incommings:

Child Tax Credit 143.12
Child benefit 169.20
Wage 1450.00 Is this from your OH? Can you get a part-time job/ pick up extra shifts if you have one? Back in my student days I worked 60 hr weeks in the summer holidays in mindnumbing jobs and 12-20 term time and still got a first. It's possible to do it all.

Total = £1762.20

Monthly outgoings:

Rent £280 Very cheap rent I cannot see you doing any better
Council Tax £49
TV licence £11.61
Water £16.50
RAC £5.25 Do you need this? If the car is getting old and needing attention, think of getting rid of it.
Electric & gas £71 (recently changed as checked moneysupermarket for best rates)
TV, broadband and phone – usually around £75 (99.84 this month though) That's high, shop around. Ditch extra TV channels, look at the telephone boards for cutting costs.
Car insurance £49.54 That's quite high? Shop around using the comparison sites. If it's a powerful car thing of getting a more economical one. Get rid of it all together if you can.
Mobile top up £10
Food £530 this month That's crazy high. This is really where you can cut down lots and by lots I means 100s.
Rail travel £110.40 (4 journeys /week @ £6.90)
Petrol £40.00 If this is all you spend a month on petrol I would do some calculations and see if the car is worthwhile. You're paying £600 a year insurance, then tax, servicing, RAC, the cost of the car etc. My suggestion to this would be ditch the car and use public transport. If you do need to make some journeys in a car use a taxi or say once or twice a year you need a car consider rental. I know it seems crazy but for very low use this is actually a better option. You would need to sit down and be very anal and do the calculations.
Swimming (in school time) £16.00
Brownies £12
Dancing £36
Cheer leading £12
Music lessons £35.20
There's a lot of extra's for the children. Nothing excessive but I'd if they start asking for more, let them know there is a limit to thing and they may have to choose between things. This would be one of the last things to go in my opinion.
Loan £182.00
River Island store card £7.09
Tesco mastercard £28.76
Tesco mastercard £96.00
Virgin card £110.86
Next account approx £70
Overdraft fee around £20

Total outgoings = 1874.21

Total Debts
Virgin credit card £3835.94
Tesco mastercard £1687.83
Tesco mastercard £3226.49
River Island store card £177.22
Next £700 ish
Overdraft £3000
Loan now owe £9131.74 (took out £12000 over 8 years) (total repayable £17552.64)

You don't mention birthdays, clothes, haircuts, christmas, luxuries etc. You need to work these out as they are the areas that people forget about and can really cause problems. Get a spending diary.

Your outgoings are just over £100 more than what comes in. You can easily achieve that from your excessive food budget alone and there are still other areas you can work on. Technically you could have a few hundred left over each month to throw at the debt. Your rent is very cheap and this what I normally see sting people and make all the other things unplayable so that's a real positive.

Get rid of the store cards ASAP, many of their rates are close to 30%. Look around for 0% deals.

The one big thing I think you really need to tackle is your personal spending issues. Doing all this won't help if you continue to keep spending. Consider seeing someone about and getting some extra help.

Good luck

neverdespairgirl

Hi - I think maybe your SOA is missing some things? Haircuts, shoes, clothes, dentist, prescriptions, special occasions, perhaps childcare?

However, there are some significant savings you can make, I reckon. Comments are in red.

Rent £280
Council Tax £49 - do you have 2 free months in Feb and March coming up? If so, that gives you £98 to pay off the highest debt.
TV licence £11.61
Water £16.50
RAC £5.25 - when your car insurance is up for renewal, you may be able to get this included in your next policy. Or just cancel it, perhaps?
Electric & gas £71 (recently changed as checked moneysupermarket for best rates) - this is still quite high. Can you keep an eye on usuage, turn the heating down a notch, switch things off, etc?
TV, broadband and phone – usually around £75 (99.84 this month though) - £75 a month, plus the £10 for mobile is very, very high indeed. Look at the Virgin deals, where you can get a 3-in-1 package for under £40. This saves min. £35 a month
Car insurance £49.54 - high insurance rate, did you shop around for it? Do you really need the car, as you also have train expenses listed?
Mobile top up £10
Food £530 this month - this is the big area you can save. There are people on the old-style board feeding families of 4 for £100 a month, but this is drastic and hard work. By meal planning, careful buying etc, though, £200 a month is an acheivable target, I can't see how you can budget for more than £250. This saves £280 per month
Rail travel £110.40 (4 journeys /week @ £6.90)
Petrol £40.00 - can you cut this down?
Swimming (in school time) £16.00
Brownies £12
Dancing £36
Cheer leading £12
Music lessons £35.20

Easy savings here of £315 a month, plus possibly others off RAC, utilities, etc. The savings of £315 per month mean your outgoings are now £1532.21 per month, but as I said above, I think there are other expenses you might need to include that you haven't thought of. Assuming "other" spending to be £100 a month, that means you have about £130 a month to pay off debts over the minimum charge.

In order to work out the best way to pay off your debts, you need to know which are the most expensive - which have the highest APR. You should then pay the minimum on all debts apart from the one with the highest APR, until the highest is paid off, then pay everything off the next highest, etc. Saves you a fortune in interest.

In March, when you get the £2k grant, that will have to go to debt repayments, of the highest APRs. In addition, if you have the extra £98 from not paying CT for 2 months, you can pay that off as well. You will see the benefits at once - if, for example (because I don't know which of your debts are the most expensive) you pay off the lower Tesco card and the River Island cards in full, you then, the next month, have the extra you aren't paying in those minimum payments (£35.85) to pay off another debt. The Tesco and River Island together are less than £2,098, so you will also pay £232.95 off another debt as well.

Making minimum payments on credit cards is a horrible way to borrow money, because the standard APRs are so high. It will take an awfully long time to pay it all off with the minimum only, which is why it's so important to pay off the debts with the highest interest rates first.

You say you have a problem with spending - I think you need to take drastic action on this, you simply CAN'T afford it. The store cards - Next, R Island etc - cut them up. As you pay off a credit card, cut that up too. When you go out, take only cash, so you can't stick something on your debit card. Botox, facials, designer clothes - you simply can't afford them, it's saddling the whole family with debt.

You can deal with this though!

masterkay

great minds ndg. I think we said similar stuff.

I am convinced the car is an expense that is not needed with monthly petrol costs being at the level of many weekly petrol costs especially with that high insurance. Hopefully OP can come back with more details.

For the OP I think this is still at a very manageable stage of debt. I'm not saying relax but you can sort this out.

neverdespairgirl

I think we were writing at the same time, pretty much.

How about, "fools seldom differ...."?

masterkay

Yeah. I prefer my quote as it makes me feel better about myself. Maybe the fool for being up so late. I really should be in bed.

Izzy44

I just wanted to thank you for your helpful responses.

I've checked our council tax bill but there is no payment break as we pay by direct debit in twelve equal instalments.

We can't manage without the car as my husband works split shifts and has to travel to and from work 4 times a day - although the journey takes only around 10-15 minutes in the car, to pay 4 taxi fares would end up costing us more I think. His place of work isn't on a bus route either so public transport isn't an option. I will definately look into changing the car insurance though to see if we can get a cheaper deal.

As for the phone, TV and broadband. We've been with Virgin for a while as I thought they offered the best deal - I will look at this again though.

I do need to tackle our food shopping issue and will take a look at the boards you mentioned - thankyou.

I feel like I have a mountain to climb with this, however writing it all down (been a bit afraid to do this before!) and reading your comments has really helped. Thankyou for taking the time to help, I do appreciate it.

Keeping_Positive

As well as everything the others have said (all good advise) I would budget in some small treats in for youself each time you get your £2k Cheque in. Allow your self say 100-200 if you have stuck to the new plan. Its better to do that and reward yourself for hardwork than feel bad and blow half of it.

I dont know of any but there must be support groups for those with the compulsion/addiction to overspend. Why not google and see if you can find one?

neverdespairgirl

Izzy44 wrote: »

I've checked our council tax bill but there is no payment break as we pay by direct debit in twelve equal instalments.

Worth a check, and of course over 12 months makes the rest of the year easier.

Izzy44 wrote: »

We can't manage without the car as my husband works split shifts and has to travel to and from work 4 times a day.... I will definately look into changing the car insurance though to see if we can get a cheaper deal.

Hope you didn't mind me suggesting it, though? The car insurance is pretty high, though - I don't know how old you and OH are, but we (both aged 30) are paying £284 a year, so yours does look like it could be lowered.

Izzy44 wrote: »

As for the phone, TV and broadband. We've been with Virgin for a while as I thought they offered the best deal - I will look at this again though.

Definintely worth another look, because prices have been falling for this.

Izzy44 wrote: »

I do need to tackle our food shopping issue and will take a look at the boards you mentioned - thankyou.

It's one of those things were it's very easy to spend a lot extra for no real gain, I think. If you make a list of meals, and a list of things you need for them, it's amazing how much less you spend!

Izzy44 wrote: »

I feel like I have a mountain to climb with this, however writing it all down (been a bit afraid to do this before!) and reading your comments has really helped. Thankyou for taking the time to help, I do appreciate it.

We're here to help, and you CAN do this!