Newbie-ish

livingbeyond

Hello all,

I've been here before, but it was a while ago, so i am a newbie-ish. Hope to get some good advice from everyone and hopefully enjoy some good chat.

Anyway, 1st question, where should I start dealing with my debts?????

GeorgeUK

First we need to see what these debts are and what you have available to throw at them. Post up a statement of affairs so we can see what the situation is like and we'll see if there is anywhere we can save you money as well as advise on how to deal with the debt.

http://www.makesenseofcards.com/soacalc.html

livingbeyond

OK, here goes!

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1944
Partners monthly income after tax....... 758
Benefits................................ 104.53
Other income............................ 0
Total monthly income.................... 2806.53

Monthly Expense Details
Mortgage................................ 783.7
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 126
Electricity............................. 26
Gas..................................... 49
Oil..................................... 0
Water rates............................. 26.34
Telephone (land line)................... 45
Mobile phone............................ 10
TV Licence.............................. 11
Satellite/Cable TV...................... 19
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 20
Petrol/diesel........................... 160
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 160
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 100
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 26
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 5
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 200
Total monthly expenses.................. 1987.04

Assets
Cash.................................... 1200
House value (Gross)..................... 165000
Shares and bonds........................ 0
Car(s).................................. 11000
Other assets............................ 0
Total Assets............................ 177200

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 109000...(783.7)....6.25
Total secured debts........... 109000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................25000.....384.......6.9
Credit Card....................1200......30........18.9
Car Loan 1.....................3000......96........0
Car Loan 2.....................3000......82........0
Total unsecured debts..........32200.....592.......-

Monthly Budget Summary
Total monthly income.................... 2,806.53
Expenses (including secured debts)....... 1,987.04
Available for debt repayments........... 819.49
Monthly UNsecured debt repayments....... 592
Surplus(deficit if negative)............ 227.49

Personal Balance Sheet Summary
Total assets (things you own)........... 177,200
Total Secured debt...................... -109,000
Total Unsecured debt.................... -32,200
Personal net worth...................... 36,000

Total Debt doesn't include overdraft of £3000, therefore total debt = £35,200.

Dithering_Dad

albertross wrote: »

Scrap the emergency fund, and throw it at the highest apr debt or overdraft, along with any other savings. Find out the apr of the overdraft if you don't know it.

Just about to type the same. It's pointless having £1200 in savings at the same time as having £1200 on a credit card, unless you're stooging on a 0% card, which at an APR of 18.9% you're clearly not doing.

I'd then move onto the two car loans, because even though they are on 0% APR (or are they?), they're easier to get rid of than the huge £25k loan and will provide a better incentive when you see them disappear!

I'd also look at flogging the car, getting a much cheaper one and using the difference to pay off/down the car loans.

What was the £25k personal loan used for? If it was for renovating/extending your property then I would look at remortgaging. Note: I'd only ever advise doing this for loans that have been used to increase the value of the home, not to consolidate debts!!

If the money was used to buy 'stuff', then could you ebay/boot sale it to repay some of the loan?

Incisor

Dithering_Dad wrote: »

... I'd then move onto the two car loans, because even though they are on 0% APR (or are they?), they're easier to get rid of than the huge £25k loan and will provide a better incentive when you see them disappear!

If they are 0%, I seriously disagree, because that is £6000 not available to pay off the car, and the delay in paying off the car loan is a serious amount of interest to pay on the car for the pleasure of seeing the smaller debts go.

Dithering_Dad

Incisor wrote: »

If they are 0%, I seriously disagree, because that is £6000 not available to pay off the car, and the delay in paying off the car loan is a serious amount of interest to pay on the car for the pleasure of seeing the smaller debts go.

?? The £6000 is the car loan amount (Car Loan 1 - £3000 + Car Loan 2 - £3000). Do try to keep up

phantom9999

Not sure if I'm missing something but there doesn't seem to be anything for car tax/insurance or buildings & contents insurance - is this included somewhere else?

poorandindenial

You have a surplus which is good news - but if you get to the end of the month and have no money and don't know where it has gone you will need to do a spending diary to help you find out. If you do have the money left - Brilliant, now throw it at a debt - lol

Take the details of all the debts you have (balance and APRs) and put them into the snowball calculator at www.whatsthecost.com and see what the impact is of paying different amounts towards different debts. You might be surprised the difference that it will make to pay a chunk off of a higher interest loan now rather than keeping it in savings. You can factor in interest free periods and fixed (non-variable) repayment agreements.

livingbeyond

Thanks for your replies, I feel it's very daunting when you realise just how much you owe. In reply to a couple of questions, mortgage payment is lumped together with building and contents insurance, and the £160 per month for car is what I put aside to average out the annual cost of servicing, repairs, insurance etc.

Although it shows that I have a surplus, I never have any left over at the end of each month, in fact I seem to increase my overdraft more and more.

angeldiva

livingbeyond wrote: »

Although it shows that I have a surplus, I never have any left over at the end of each month, in fact I seem to increase my overdraft more and more.

Hi and welcome, glad you have decided to start dealing with your debts. l I used to be a bit like you, I never seamed to have any money left by the end of the month. I found out that working out exactly where each penny was going really helped me budget and cut back. So as well as all the other great advice, how about keeping a spending diary?
I have mine here http://www.spendingdiary.com/