Hello, I'm new and need some advice :)

GeorgeUK

Lewki - on the SOA calculator, there should be a button that will show the SOA in MSE (money saving expert) format. You can edit your post and just copy and paste that over - no need to try to manually adjust it. Just make sure you copy everything. I do Ctrl + a to select all, then copy paste.

KiKi

Hi there Lewki

Forgive me if any of these comments come across quite strongly...they're just recommendations, that's all.

LEWKI wrote: »

OK, I have just done my SOA:
Total monthly income.................... 4332.5

Monthly Expense Details
Electricity............................. 55
Gas..................................... 55
WOAH! Hope over to www.moneysupermarket.com and check out the cheapest supplier in your area. You may want to think about a capped tariff, as prices are likely to go up soon.

Once you've identified the supplier you want (they do all the work for you, it's very easy), check whether Uswitch, moneysupermarket.com or Quidco.com have any deals with those suppliers to give you cashback...all of which can go towards your debt.


Water rates............................. 62.17
Also quite high. I pay £12.20 a month, and I have BIG baths three or four times a week! Are you on a water meter? Can you ask them to read it and make sure you're paying the right amount - or ask them to install a water meter if not.


Telephone (land line)................... 15
Internet Services....................... 22.5
Who are these with? You can get a better deal on Broadband and phone with Virgin. You could get BT for £10.50 a month and O2 BB for £15 a month. You could call them up and threaten to leave, they might offer you a better deal. Again, try www.moneysupermarket.com. And then pop to Quidco if you decide to change supplier, because Quidco have some good cashback deals with suppliers right now.


Groceries etc. ......................... 450
Okay, this is where you definitely need to cut down. I spend £50 a month on food for me and two cats. The Old Style board on this forum is FANTASTIC for helping you cut down on groceries. I assume your wife does most of the cooking etc if she's at home...if this is the case, maybe you could take the kids off her hands for a bit, and let her get onto that board and join in with the old style fun! Many people on here pay something like £300 a month for themselves, their kids and their pets, so it can be done.

Also, try dropping a brand for one month (ie, if you get Taste The Difference, try Sainsburys own. If you get Sainsburys own, try their value range). You won't notice the difference in a lot of things, and it saves loads of money.


Clothing................................ 100
Again, until your debts are paid off, this is quite high. Could you cut back on you and your wife for a bit? Perhaps give yourselves a goal: you won't spend any money on clothes for you two, and only buy necessary clothes for the kids until you've paid off one of your credit cards?


Car Insurance........................... 73.06
Is this the best deal you can get? www.moneysupermarket.com again, and then when you've decided on a good deal, hop to Quidco and see if they offer cashback with that provider.


Buildings insurance..................... 16.91
Contents insurance...................... 17.83
When you renew these, check www.moneysupermarket.com again, and also then to Quidco for deals that give you cashback.

Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 50
Holiday................................. 150
Emergency fund.......................... 0
Total monthly expenses.................. 2993.31


Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................2200......70........6
Student Loan...................500.......55........5
Natwest Loan...................10000.....155.......9.9
Total unsecured debts..........12700.....280.......-

If you stick by your budget, you should clear your debt comfortably. And if on top of that you cut down where I've suggested, you'll make even greater inroads.

Can I suggest that overpaying on your mortgage is crazy?! You're putting money towards something you don't need to, whilst at the same time you have an overdraft, and £12700 worth of debts. Also, the APR on your mortgage is lower than the credit cards, so you're paying off a cheap debt first.

Stop overpaying the mortgage, and put that money to the highest APR credit card.

Use your savings to pay off the Overdraft if you must. However, this may fool you into believing you then have that overdraft to go into again...and then you have no savings in case of an emergency. I personally would make the changes above, set a monthly budget, LIVE by it, write down EVERYTHING you spend that's overbudget so you can see where your weaknesses are. You could save £1000 (or more) a month, and have your OD cleared in 4 months. You could then clear off all your debt within a year, if you truly stick to your budget - which is terrific news for you!

I personally believe (but obviously this is only my opinion!) that taking out an additional card, or clearing an OD with savings is not necessarily the way to go unless you can actually stick with that change in behaviour. What I mean by that is that it would be very easy to pay off your OD, but not change your spending habits, so you end up with a £4000 OD again, and then have no savings at all.

You have to change the way you spend and use money, so I would first get into the habit of budgeting, sticking to it, and reviewing your suppliers as above, so that money saving in this way becomes a way of life.

It's not always the cheapest way of doing it (in that your savings are earning less than you're paying on the OD), but unless you are *sure* that you won't go back into the OD again, and unless you're sure that you can control those impulses to spend, then think carefully before you make a huge payoff! Or - close the OD down so that you don't have the option of using it (or leave just £100 OD there in case).

And, of course, once you've paid off a card - cut it up!

Sorry that was long-winded, but I hope it helps you.

Well done to you and your wife for seeing the issue and getting to grips with doing something about it; it's always the hardest part, and the fact that you're doing it together is going to be really good for you. Well done. :beer:

KiKi

Karmacat

Hi there

I've pasted in my comments:

LEWKI wrote: »

OK, I have just done my SOA:

Monthly Expense Details
Mortgage................................ 1131.58 are you on the best rate?
Council tax............................. 167
Electricity............................. 55
Gas..................................... 55 how recently have you switched? These could be better, seeing as you both work....
Water rates............................. 62.17
Telephone (land line)................... 15
Mobile phone............................ 10
TV Licence.............................. 11.61
Satellite/Cable TV...................... 0
Internet Services....................... 22.5 you could probably shave a tenner here
Groceries etc. ......................... 450 eventually you could shave literally hundreds off this - the OldStyle board on here will give you tons and tons of information
Clothing................................ 100 you can cut this down for a little while if need be.
Petrol/diesel........................... 400
Road tax................................ 30
Car Insurance........................... 73.06
Car maintenance (including MOT)......... 30
Buildings insurance..................... 16.91
Contents insurance...................... 17.83 you can probably get this lower next time.
Life assurance ......................... 85.65 ummm..... that sounds huge to me! Is this the best deal for you? Could you get by on less?
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 50
Holiday................................. 150
Total monthly expenses.................. 2993.31

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 142000...(1131.58)..5.5
Total secured debts........... 142000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................2200......70........6
Student Loan...................500.......55........5
Natwest Loan...................10000.....155.......9.9
Total unsecured debts..........12700.....280.......-

Monthly Budget Summary
Total monthly income.................... 4,332.5
Expenses (including secured debts)....... 2,993.31
Available for debt repayments........... 1,339.19
Monthly UNsecured debt repayments....... 280
Surplus(deficit if negative)............ 1,059.19

This has not pasted very clearly. I have estimated a number of things here, for example haircuts, Xmas and holidays. We do not budget for these items, they just happen. Also, my £4,000 od does not show.
Finally the value of our property is about £300k with £140k mortgage. I overpay this by £150/month. If needed I can draw this money back so would be about £1,800 if I needed it. (I really don't want to but if that the advice I will look closely at it).

As you can see, we should have plenty of money left.

And thats the really important point: unless you know how these debts happened in the first place, all the attention to repayment in the world won't help - you will simpy build them up again! Your debt sounds like its lifestyle debt so, to be honest, you'll have to adjust your lifestyle to suit your income.

Another point: if you **don't** have that money left at the end of the month, then start a spening diary, every penny, you and your wife. This gives you knowledge and control over your money: you may find that you're spending £80 a month on lattes, for instance (really, thats what can happen!).
I think most months we do, but then we will need to upgrade a car or we will have not budgeted for our family holiday.

I really like the idea of clearing the OD and not going into red again.

Great!!! Repay logically, according to the snowball calculator already mentioned, to get the most benefit from your debt repayments: if you clear the highest % rate debts first, you have more money to throw at the lower interest ones, and gradually more and more of your money goes to capital repayments, rather than interest payments.
That appeals to me. And yes, My wife is fully aware of our finances. She is brilliant and works very hard with our 3 young children and works part-time. We have a joint bank account and running everything from there - she wants to be sorted as much as me - big family effort coming!
Holidays are not big, normally a campsite in france. We do not have Sky (but I can have Sports apparently once we are DF!!). Also I smoke, that accounts for about £100 month:mad: .

That needs to be in your budget, sorry!

Check it out, and let us know. Have a think about those lifestyle choices. Keep posting!

LEWKI

Thank you all for your advice. Kiki - I love the mortgage free tab by the time you are 35. I am 35 now and still in a bit of a mess. Good luck with that!
Karmacat, again great advice thank you

That is loads of information to take in and I will reflect on everything. In answer to a couple of points

1. Yes my wife does do most of the groceries and cooking. She really is not extravagent and most of the budget seems to go on washing powder, fruit and veg!! Fresh food is so expensive and we are determined that the kids get the 5 a-day
2. Water rates are fixed. That is just set annually and we pay by DD
3. Mortgage is 5.5% fixed until September 2009. I fixed for 5 years when we moved to our new house 3.5 years ago
4. Life assurance £85 I agree is high. That is joint mortgage cover on death, I took a policy to provide a salary if I was to ill to work, £100k if I should die (so that is on top of the mortgage cover).....My family would also get 3x my salary if I should die provided by my employers. I spoke with my IFA last week and asked his advice. He just told me that I needed it and it was good value?
5. Internet is with Tiscali and includes free weekend calls. I think the rate is £14/month plus our call useage plus VAT. BT rate should be £10/month not £15 as I put in SOA
6. I am with Powergen and I believe I am on a fixed rate deal that has been fixed for 2 years so think its still good value?
7. Car insurance, mine is up in July and yes I have already found much cheaper deals through the search engines. I Phoned Direct Line and they told me to wait to see what offer i get from them when my renewal notice comes through next month.

Wow... loads of advice and I feel really positive. PS - I showed my wife the site last week and she has been getting free samples and all sorts from MSE. I will show her all posts when I get home!!

Thanks everyone :beer: I will discuss everthing with OH later, but think OD goes first with savings, followed by Loan to Virgin 0%CC. Stop overpayment on mortgage and we should have enough money left in June to put big hole in either SLoan or Barclaycard.

ikkle87

1. Yes my wife does do most of the groceries and cooking. She really is not extravagent and most of the budget seems to go on washing powder, fruit and veg!! Fresh food is so expensive and we are determined that the kids get the 5 a-day Sounds really silly but try growing your own could be a little project for you and your family and although it isn't going to rid you of your debt even if it only saves you a few quid its a few extra quid that you don't have at the moment.
2. Water rates are fixed. That is just set annually and we pay by DD
My water rates in my old flat were fixed and I was paying the same for 2 of us as my mate who was stay at home mum with twins and 2 kids at school as well as her hubby. Look into getting a water meter it could reduce your bills a lot.
3. Mortgage is 5.5% fixed until September 2009. I fixed for 5 years when we moved to our new house 3.5 years ago
4. Life assurance £85 I agree is high. That is joint mortgage cover on death, I took a policy to provide a salary if I was to ill to work, £100k if I should die (so that is on top of the mortgage cover).....My family would also get 3x my salary if I should die provided by my employers. I spoke with my IFA last week and asked his advice. He just told me that I needed it and it was good value?
5. Internet is with Tiscali and includes free weekend calls. I think the rate is £14/month plus our call useage plus VAT. BT rate should be £10/month not £15 as I put in SOA. You could still maybe get a better deal we are with TalkTalk and get free local calls free calls abroad and broadband for about £18 a month.
6. I am with Powergen and I believe I am on a fixed rate deal that has been fixed for 2 years so think its still good value? I'm not totally up on all this but I think on fixed rates you can pay too much because you could be paying for more than you use, I would still look at the comparison sites and then you will find out if it is good value or not.
7. Car insurance, mine is up in July and yes I have already found much cheaper deals through the search engines. I Phoned Direct Line and they told me to wait to see what offer i get from them when my renewal notice comes through next month. Definitely do what has been suggested above. Find your cheaper quotes and then have a look on some cashback sites to see if they can get you cash back with the new cheaper insurers. Martin had an article in the Sunday papers about it, someone managed to get insurance for £28 cos it was a £128 policy but they got £100 cashback!!!

KiKi

Thanks for the extra info, Lewki.

Re the groceries, I don't advocate scrounging on fresh fruit or veg for your kids! I eat about 8 a day. You *can* still get that food bill down, trust me, especially if you buy everything fresh. Honestly, it can be done; might be a nice challenge for you and the family! But £450 for the month is still high.

The fixed water rates need reviewing. £60+ is high. Ask your provider to review your deal to £40 or put a water meter in.

You absolutely need to review your Powergen deal. Fixed deals are not necessarily good deals, unless you use a hell of a lot more than you pay. Powergen are expensive as it is, and £110 a MONTH is extortionate! I pay £36 a month for a two bed house! Check how much you are actually using (Powergen can give you usage, or check online if you have an online account), then do a comparison with moneysavingexpert.com.

All this sort of stuff is about how you not only clear your debts, but how you change your attitude to money. It may be only £20 a month, but when you save £20 a month in several areas, that quickly adds up to, say £140, and more.

HTH
KiKi

LEWKI

Thank you all for the advice. OK I phoned OH from work, told her about the thread and she has been reading avidly as well

She has just phoned bank and used all our savings to pay off the OD. So that has gone. Pay day on Friday of this week and we are sitting down to budget properly tonight. This will include all of the things we usually ignore on the budget like car tax!!

I have done a spreadsheet that shows we will be able to clear OH student loan next Monday from my salary. The plan is that will save us £55 month. I will review all our DD, including PowerGen, 2 x car insurance. Who knows that may shave another £25-30

The plan is that we will put my OH salary in joint account and use this against the CC bill. I think the new Virgin Card will be full by mid month with my Natwest Loan and the Barclaycard. This is going to cost me about £350 but I will be the 0% for 15months. The challenge will be to clear all debt in that 15 months. This is £833 month:eek: . I will pay this using OH salary plus the total of my DD on debt currently (Loan 155 + Barclacard 100+ mortgage overpayment 150+SL 55 = £460). This means taking £373 from OH £500/month salary....it can be done!!

I now have the framweork of a plan, next step is to ensure we do not go overdrawn again. Lots for us to work on. I will use the forum to keep us on track. Thanks to everyone who has helped:T

KiKi

Well done both of you - sounds like an excellent plan!!!

Make sure - please, please, please - that now you've paid off the OD, you cancel it! Maybe leave yourself £100 as a buffer, but remove the facility to use it, or it might be too tempting!

Please do update us on progress...maybe change the title of this thread to be your diary instead so we can encourage you, see how you're doing?

There's a budget planner here which might help you think through the things that you might spend during the year. http://www.moneysavingexpert.com/banking/Budget-planning


KiKi

Karmacat

Hi Lewki

Thats great news about the o/d being gone; now, as KiKi says, you have to make sure it doesn't come back.

Groceries - I understand there's 5 of you, but there are lots of ways to get that amount down - stepping down a range, for instance - can you honestly tell the difference between branded tinned tomatoes and Aldi/Tesco Value Range ones, for instance? Making a meal plan cuts down on wastage, which uses an incredible amount of money. Using generic cleaning stuff like Stardrops, sometimes in diluted form, can save a packet... drying on the washing line instead of in the dryer (I know, with 3 kids it does mean effort, but....). Wearing things twice instead of once....

Lovely that your wife is enthusiastic too, if you work as a team the difference will be tremendous. Your plan to use the forum to keep you on track is *exactly* what its meant for, thats brill. You can keep going now - but I'd really advise the spending diary, and to update the snowball calculator now that the o/d is gone.

Good for you! :j :j :money: :j :j

babyharry5

loads of great suggestions & info here !
like KARMACAT I suggest making a simple food shopping list and plan your weekly meals - I used to spend between £80-100 per week on food.
Since planning, my weekly bill is between £30 -40 dependant upon extra's such as washing powder etc My friends cannot believe my food bills - but we eat well and we eat fresh.
(All of the money I save now goes into a savings account - just have mortgage left now)
It is so easy to throw anything into your trolley - dont deviate from your list and add in extras that you really dont need every week! - magazines cds dvds toys convenience meals etc
I too have changed from the more luxury ranges to a lot of smart price items - kids & hubby haven't noticed any difference at all!
It is such a challenge to save £'s on easy things like this, which then frees up more cash to clear off your debts and then use to put into your savings!
defiintely reduce the o/d limit and cut up any credit cards you still have. Do not be tempted to take another one out after everything has been cleared - hubby and I went through this three times before we finally learnt out lesson and now realise we cant have one at all!
My dh and I visit our spreadsheet each week to make sure we are still on plan - very easy to get off track - when on holiday, or a family weekend away etc so stick with it and it soon becomes habit
YOU ARE FORTUNATE TO BE IN A GOOD FINANCIAL POSITION, IN COMPARISON TO SOME PEOPLE ON HERE - TAKE ALL THE SENSIBLE ADVICE AND YOU WILL BE SORTED IN NO TIME - BEST OF LUCK TO YOU BOTH!