Trying to break even

UncleDes

Hi

We had our first child last year. My partner was on maternity leave for much of the year. We're now feeling the pinch. Especially with the costs of child care coming in to play. Our income has always equalled or exceeded our outgoings. Despite all the excellent recommendations from MSE we're now not breaking even.

Most of our income goes on servicing existing debt - which is painfully high. £80k. This is spread around personal loans taken out in the last couple of years and 0% cards which we BT every year.

Not really sure what we can do. The personal loans are at favourable interest rates. Approx 5 years left to pay all these off. Things will be easier then - but in the meantime causing a lot of stress.

Any tips as to what I should do next?

Thanks, Des.

UncleDes

Thanks Tustastic, I'll do it and will post back the outcomes.

UncleDes

OK - I've taken the plunge and worked on my SOA overnight and here it is. (Some explanatory notes at the bottom.)
Monthly Income Details
Monthly income after tax................ 4406
Partners monthly income after tax....... 2000
Benefits................................ 72.4
Other income............................ 0
Total monthly income.................... 6478.4

Monthly Expense Details
Mortgage................................ 1927
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 203
Electricity............................. 47
Gas..................................... 53
Oil..................................... 0
Water rates............................. 136
Telephone (land line)................... 35
Mobile phone............................ 90
TV Licence.............................. 12
Satellite/Cable TV...................... 35
Internet Services....................... 13.99
Groceries etc. ......................... 640
Clothing................................ 400
Petrol/diesel........................... 40
Road tax................................ 11
Car Insurance........................... 67
Car maintenance (including MOT)......... 658
Car parking............................. 80
Other travel............................ 235
Childcare/nursery....................... 924
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 9
Buildings insurance..................... 25
Contents insurance...................... 5
Life assurance ......................... 72
Other insurance......................... 24
Presents (birthday, christmas etc)...... 20
Haircuts................................ 35
Entertainment........................... 60
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 5956.99

Assets
Cash.................................... 0
House value (Gross)..................... 519000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 2000
Total Assets............................ 521000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 432000...(1927).....5.34
Total secured debts........... 432000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Egg Personal Loan..............19676.....385.......7.66
Northern Rock Per Loa..........22000.....299.......7.9
Natwest Personal Loan..........23038.....284.......7.3
Egg Card.......................7210......180.......0
Barclays Card..................4804......110.......0
Virgin Card....................9975......25........0
Total unsecured debts..........86703.....1283......-

Monthly Budget Summary
Total monthly income.................... 6,478.4
Expenses (including secure debts)....... 5,956.99
Available for debt repayments........... 521.41
Monthly UNsecured debt repayments....... 1,283
Surplus(deficit if negative)............ -761.59

Personal Balance Sheet Summary
Total assets (things you own)........... 521,000
Total Secured debt...................... -432,000
Total Unsecured debt.................... -86,703
Personal net worth...................... 2,297

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.[/font]

Our cars are leased, I've put them in the Car Maintenance section. The earliest I can get out of my lease (£329 per month) is July 2009. Unless anyone knows of a way out earlier? I'd want to maintain my partner's lease though as she uses it for ferrying our baby around and getting to and fro from her job.

Other points:

Our personal loans expire in the following months / years:-

Egg = May 2013
Northern Rock = May 2016
Natwest = September 2016

Would be great to clear them earlier, but just don't see how without going even further into deficit month to month.

Would really welcome your help and guidance to a) get back into the black and b) clear these debts as soon as possible.

Thanks everyone, Des

tesuhoha

After a very quick look, if you stop buying clothes for a while you will be £400 per month better off instantly. Also is it necessary to spend £658 on car maintenance per month? What is the other travel that you mention? You can also cut your food bill right down. If you go onto the Old Style Board on this site there are lots of tips and ideas.

tesuhoha

Maybe you should also give up the idea of a holiday this year. If you are in deficit with your essential payments you can't afford to go on holiday.

ANDY597

Have a look at the main site and give yourself a 25% wage rise. The calculate there is invaluable and will cut your expenses down right away.

Im seeing:

Mobile phone............................ 90 - your having a laugh, check e2save & quidco for current deals if your not bound into contact, if you are bound into contact call them and ask for a better tariff. £90 is huge.
Satellite/Cable TV...................... 35 - Do you need all these channells.
Clothing................................ 400 - Time to put this on hold
Car Insurance........................... 67 - 1 car or two, shop around for this and dont forget quidco
Car maintenance (including MOT)......... 658 - Can you change to a smaller car
Car parking............................. 80 - Can you epand on this.
Other travel............................ 235 - Can you expand on this.
home insurance..................... 30 - You can probably beat this down
Life assurance ......................... 72 - You can probably beat this down
Other insurance......................... 24 - Can you expand on this

PS. I was in the same boat 18 months ago and these boards get me alive, so dont think for a minute im giving you a hard time, but youve got to be strict on yourself and cut out all unecessary luxuries to make it work.

My debt was a lot less that yours, but its all relative as you earn about 4 times my salary
I hope to be debt free by June, so hang in there, its going to be OK.

firesidemaid

there is lots of flexibility in your income and lots of ways to save, you should be able to break even then.

water rates - £136! go on a meter and you won't even pay £36 a month £100 saving.

groceries can be cut by at least half - £300 saving

clothes can stop for now - £400 saving

reduce mobiles, phone, internet, cable etc by half - £90 saving.

that is nearly £900 saved a month already.

plus are you claiming the childcare vouchers you are entitled to, therefore saving tax on your childcare costs.

good luck x

TurnaroundSue

UncleDes wrote: »

OK - I've taken the plunge and worked on my SOA overnight and here it is. (Some explanatory notes at the bottom.)
Monthly Income Details
Monthly income after tax................ 4406
Partners monthly income after tax....... 2000
Benefits................................ 72.4 Is this all your entitlement?
Other income............................ 0
Total monthly income.................... 6478.4

Monthly Expense Details
Mortgage................................ 1927
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 203
Electricity............................. 47
Gas..................................... 53
Oil..................................... 0
Water rates............................. 136 This is whopping - maybe look at installing a water meter?
Telephone (land line)................... 35
Mobile phone............................ 90 This could be reduced - how many phones is this for?
TV Licence.............................. 12
Satellite/Cable TV...................... 35 Get a freeview box
Internet Services....................... 13.99
Groceries etc. ......................... 640 Could be massively reduced - pop over to OldStyle board to get some great tips and recipes
Clothing................................ 400 Cut out completely - join local freecycle group and get virtually brand new clothes for baby for FREE
Petrol/diesel........................... 40
Road tax................................ 11
Car Insurance........................... 67
Car maintenance (including MOT)......... 658
Car parking............................. 80
Other travel............................ 235 What is this?
Childcare/nursery....................... 924 Do you use the vouchers - lots of info on this site about how you go about getting them through employers. Also on It Pays To Watch section of this site
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 9 Do you really need this?
Buildings insurance..................... 25
Contents insurance...................... 5
Life assurance ......................... 72 Could this be reduced?
Other insurance......................... 24 What is this?
Presents (birthday, christmas etc)...... 20
Haircuts................................ 35
Entertainment........................... 60 Cut out until financially more secure
Holiday................................. 100 Cut out until financially more secure
Emergency fund.......................... 0
Total monthly expenses.................. 5956.99

Assets
Cash.................................... 0
House value (Gross)..................... 519000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 2000
Total Assets............................ 521000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 432000...(1927).....5.34
Total secured debts........... 432000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Egg Personal Loan..............19676.....385.......7.66
Northern Rock Per Loa..........22000.....299.......7.9
Natwest Personal Loan..........23038.....284.......7.3
Egg Card.......................7210......180.......0
Barclays Card..................4804......110.......0
Virgin Card....................9975......25........0
Total unsecured debts..........86703.....1283......-

Monthly Budget Summary
Total monthly income.................... 6,478.4
Expenses (including secure debts)....... 5,956.99
Available for debt repayments........... 521.41
Monthly UNsecured debt repayments....... 1,283
Surplus(deficit if negative)............ -761.59

Personal Balance Sheet Summary
Total assets (things you own)........... 521,000
Total Secured debt...................... -432,000
Total Unsecured debt.................... -86,703
Personal net worth...................... 2,297

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.[/font]

Our cars are leased, I've put them in the Car Maintenance section. The earliest I can get out of my lease (£329 per month) is July 2009. Unless anyone knows of a way out earlier? I'd want to maintain my partner's lease though as she uses it for ferrying our baby around and getting to and fro from her job.

Other points:

Our personal loans expire in the following months / years:-

Egg = May 2013
Northern Rock = May 2016
Natwest = September 2016

Would be great to clear them earlier, but just don't see how without going even further into deficit month to month.

Would really welcome your help and guidance to a) get back into the black and b) clear these debts as soon as possible.

Thanks everyone, Des

Well done UncleDes for coming on and posting your SOA. I have put a few suggestions/thoughts in red alongside, but I am sure that there will be others more knowledgeable than my good self to give you further advice.

The good thing is that you and OH are on very good wages, so you can get out of debt relatively quickly. Have you been on the snowball calculator to find out how best to repay the debts and see what your debt free date is? A brilliant tool and really addictive - www.whatsthecost.com.

Good luck and keeping posting.

ANDY597

Uncle Des, do you have any savings/shares/isa's/investments on there that you havent delcared ?

duchy

Check out with Sky etc what the costs would be to bundle phone internet and tv together-then get a quote from Virgin (or vice versa) with that info in hand-they'll both compete to keep/get your business.
Food is really high definitely cuts to be made there quite painlessly
Clothes-OK the baby needs clothes but if you've been spendin g at this rate for a while neither adult does as you've both stopped growing
Utilities-definitely look at a water meter and pop onto Quidco and do the gas/electric comparisons there for savings and cash back.
As you've obviously been high consumers for a while it's probably worth putting your debts into the snowball and seeing when your debtfree date is with the current SOA and then recalculate it with various cuts (clothes spring to mind and food) to give yourself an incentive to cut it down. It's quite an eye-opener.

UncleDes

Thank you so much for the fantastic advice so far it really is so kind of you to spare the time. I'm going to respond to each of your suggestions.

One thing leaps out immediately -- my water bill is not monthly, I think this must have been the quarterly bill, apologies for any confusion. I will revisit the SOA and re-calculate things.

Until yesterday my oh and I felt alone in dealing with this - we now feel a lot happier knowing that you guys are out there.

I'll report back later with an updated SOA -- with explanations against entries for those that requested them.


Thanks all, Des