Credit card help!!!!

13

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  • EssexHebridean
    EssexHebridean Posts: 21,200
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    edited 31 January 2019 at 10:44PM
    OK - comments in red as usual...
    OK, heres my SOA. I think i've completed it correctly...
    I've looked into 0% balance transfer cc, i've found one but MSE eligibility checker says 60% chance . Is it worth going for? I dont want to keep applying and my credit score takes a battering.

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 1548
    Partners monthly income after tax....... 1300
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 2848


    Monthly Expense Details

    Mortgage................................ 624
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 129 Is this paid over 10 months or 12? If 10 remember you have this month and next with no payment going out.
    Electricity............................. 61 This and the gas can likely be tweaked a bit - assume it's a single payment to cover both? Turn the thermostat down a degree or two, make sure people are turning lights and appliances off when not in use, banish the word "standby" from the house...see also batch cooking, never using the oven for only one thing, and "it's cheaper to boil water in an electric kettle than on the hob"
    Gas..................................... 61
    Oil..................................... 0
    Water rates............................. 42 Metered? Might you save with a meter if not?
    Telephone (land line)................... 26.99 Assume this includes internet?
    Mobile phone............................ 38 How many phones?
    TV Licence.............................. 12.83 well done for remembering the odd pennies!
    Satellite/Cable TV...................... 7.99 Netflix I assume? Probably a small price to pay for household harmony with two kids!
    Internet Services....................... 0
    Groceries etc. ......................... 300 You can probably make a bit of a saving here by savvy shopping, meal planning and downshifting the odd brand
    Clothing................................ 0 There needs to be something here even if only "pants & socks" essentials
    Petrol/diesel........................... 0 Electric car? ;)
    Road tax................................ 2.82 If you're paying this monthly, stop - it costs extra.Stash the money ahead of time and pay annually. If you're stashing make sure it really does get put away
    Car Insurance........................... 41 Best value you can get? Comparison sites etc?
    Car maintenance (including MOT)......... 40 Again be sure you really DO budget and put this aside
    Car parking............................. 0Never?
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 18.99 if this is contact lenses or similar can you alternative lenses one day glasses the next to eke out supplies? If prescriptions - pre paid card?
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 18.99
    Contents insurance...................... 0 Assume this is in with buildings insurance?
    Life assurance ......................... 0 Should there really be something here? what provision for the family if something happens to you or the OH?
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0 You've got two kids - I'm struggling to believe you buy nothing for them for christmas OR birthdays
    Haircuts................................ 10
    Entertainment........................... 0 Nothing at all? Never a quick coffee in town, a drive out to somewhere at a weekend, a treat with the kids?
    Holiday................................. 0
    Emergency fund.......................... 0 You need something here - homeowner with a car - aim for get £1000 stashed away
    Total monthly expenses.................. 1434.61



    Assets

    Cash.................................... 0 This figure should be that money you're saving for car maintenance etc, plus eventually your emergency fund.
    House value (Gross)..................... 17000 Is this figure right? Clue: I hope not or that mortgage figure is a bit of a problem!
    Shares and bonds........................ 0
    Car(s).................................. 5000
    Other assets............................ 0
    Total Assets............................ 22000



    Secured & HP Debts

    Description....................Debt......Monthly...APR
    Mortgage...................... 75500....(624)......2.75
    Total secured & HP debts...... 75500.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly...APR
    credit card 1..................6824......172.......19.99
    credit card 2..................5659......86.99.....17.75
    Total unsecured debts..........12483.....258.99....-



    Monthly Budget Summary

    Total monthly income.................... 2,848
    Expenses (including HP & secured debts). 1,434.61
    Available for debt repayments........... 1,413.39
    Monthly UNsecured debt repayments....... 258.99
    Amount left after debt repayments....... 1,154.4 And DO you have this left?


    Personal Balance Sheet Summary
    Total assets (things you own)........... 22,000
    Total HP & Secured debt................. -75,500
    Total Unsecured debt.................... -12,483
    Net Assets.............................. -65,983



    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

    Right - on these figures why on EARTH not just hit the debt and get it cleared off? If that's an accurate SOA then you can have the cards gone in a year, in fact less than.

    There's something not right here, and my guess is that this is what we call an "aspirational SOA" - and there is actually a lot more being spent than you think there is. Get together your bank and any CC statements for the last few months, and go through item by item - add up EVERYTHING spent on food for example, remember to note and add in your petrol or diesel spend, tally up the oddments of clothes for the kids, and anything else you've forgotten, Check the figures on bills are realy what you're paying.

    At the moment you are over 13k out over a year - and that is more than the credit card debt!

    Before you do ANYTHING about looking for 0% deals, or thinking about any other new products, you have to get this budget sorted - it's key to the whole thing.
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • Thanks for taking the time to look through my SOA. Yes it may be an"aspirational SOA" , things like kids birthdays ect are not a monthly thing so thats why i wasnt sure of a figure for that? Also 'entertainment' varies month to month so
    Just missed a '0' of the house value; 170,000. Also the total monthly income includes my wife's income who is unaware of the cc debt amounts i owe so would i need to re-do the SOA based solely on my own nett income (£1998)?
  • EssexHebridean
    EssexHebridean Posts: 21,200
    Name Dropper First Anniversary Photogenic First Post
    Forumite
    Thanks for taking the time to look through my SOA. Yes it may be an"aspirational SOA" , things like kids birthdays ect are not a monthly thing so thats why i wasnt sure of a figure for that? Also 'entertainment' varies month to month so
    Just missed a '0' of the house value; 170,000. Also the total monthly income includes my wife's income who is unaware of the cc debt amounts i owe so would i need to re-do the SOA based solely on my own nett income (£1998)?

    Yep - had a feeling it was. OK - you need to start again. If those are your "acknowledged" expenses then as you can see from that you are "losing" in excess of 13k a year - that is just crazy money. An aspirational SOA is no help to you at all, and as a matter of urgency you need to track down where that money is going. Can you start to see where things have been going wrong?

    Entertainment and presents - they can't "vary month to month" - the way it works is that you work out how much you want these things to cost you over a year - while you're in debt that needs to be a smallish sum, once you're debt free you have flexibility to increase it a bit. You then divide those annual figures by 12 and there is your budget. You set aside that money every month into a savings account there for the purpose (no, I know you haven't. Open some ;)) Some months you'll not spend all your budget - that's fine, the balance sits there. Then when you get an "expensive" month - a close family member's birthday, Christmas - the money is in the account ready. See?

    The total monthly income question depends. Did you run up the credit card debt buying stuff for yourself? Clothes, tech, gadgets? or was it on household stuff, trips away, a new TV? If the former, then yes, you should probably suck it up and tackle that on your own. If the latter, no, it's in real terms joint debt. Whichever of those applies though you need to be honest with your wife. how would you feel if she was worrying herself sick over something like that? I hope you'd expect that she could 'fess up and you'd tackle it together!

    Your situation is actually brilliant compared to many on here.The SOA presumably has most of the priority payments correct, so you SHOULD still have a healthy surplus - and if you tackle it right you'll be out of this within a couple of years. If you learn from it then you never need to find yourself back feeling like this again, either.
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • Thanks everyone, some great advice . Need to do some serious budgeting.
  • Thanks everyone, some great advice . Need to do some serious budgeting.
    It needs to be stressed that an SOA is not a budget. It's a statement of exactly where you are with your finances at a given moment in time.

    I suspect your income and debt payments are accurate - although you should be claiming child benefit as neither you nor your partner are earning close to £50k.

    For your spending, the best way to do this is to take several months bank and credit card statements, categorise every expenditure according to SOA category, add them all together for each category, then divide by the number of months, to produce your average spending over time. It's more accurate the more months you do this for - at least 3 months, with 1 year's spending being the absolute best.

    Once you have your average spend on e.g. utilities, entertainment, food, clothes, then budgeting becomes possible, and you're more likely to produce a budget you can stick to.
  • Hi
    Do you get child benefit, if so add this into your soa xx
  • Thanks for taking the time to look through my SOA. Yes it may be an"aspirational SOA" , things like kids birthdays ect are not a monthly thing so thats why i wasnt sure of a figure for that? Also 'entertainment' varies month to month so
    Just missed a '0' of the house value; 170,000. Also the total monthly income includes my wife's income who is unaware of the cc debt amounts i owe so would i need to re-do the SOA based solely on my own nett income (£1998)?

    As EH says the soa is incorrect or you would easily be able to afford a lot more than minimums on your credit cards as it shows you having more than £1100 spare. Even with allowing some for entertainment (unrealistic not to with 2 children), clothing and childcare there is loads spare.

    I think the worrying thing about this is the fact you say your wife does not know the extent of the debt. The crux of this is did you build this up yourself or is the result of juggling things to buy stuff for the family? How do you and your wife organise your finances? For some reason a lot of people who are married, have a house and children so have merged their lives completely still do separate finances. I think this inevitably means one person has lots of spare income and the other is scrimping around to pay bills. If you had no kids and similar incomes I think I could understand it and you would split all bills down the middle. From your soa it looks like you are paying all the bills though and you only earn £250 more than her. What is your wife paying for?


    I would recommend you do another soa with what you actually spend and sit down with her one evening when the kids are in bed and tell her the extent of the debt. It is fixable if you work as a team. On your own it is hard work and very expensive.


    On those interest rates you must be paying close to £200 in interest rates so the debt is only going down by about £55-£60 a month. I would suggest you do a soft eligibility check on this forum to see if you are eligible for any 0% deals so your repayments are going to the debt and not to interest. Make a plan with your wife as to how much can be repaid each month and between you get as much on 0% as you can. Of course the caveat to that is does she also have debt? This problem could be bigger with finances split the way you do it. Of course also if you built the debt up buying stuff for yourself and not the family then this might not be palatable to your wife but any damage to your credit rating will also affect her which is why you must tell her.
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  • EssexHebridean
    EssexHebridean Posts: 21,200
    Name Dropper First Anniversary Photogenic First Post
    Forumite
    Thanks everyone, some great advice . Need to do some serious budgeting.

    Correct. Have another go at the SOA first, when you get it right it's time to live with those figures for a while, overpaying anything left as a surplus in the bank at the end of the month against the most expensive debt. Over time you'll find you can tweak things - some areas you'll be able to pin down more savings, others you might realise you'd pitched artificially low. Only by living with it a day at a time though do you learn what works and what doesn't.
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • OK , so a bit of an update. I’ve managed to shift the entire, current credit debt onto 0% interest cards. I couldn’t get the whole balance onto 1 card so I’ve had to split into onto 3 cards… (all 0% though) . Going to be a bit tricky juggling them I guess but needs must. Had to get that balance off 17.9% and 19.9% APR !!
  • That's excellent news SkintDaddy - how are you doing on the revised SOA?

    No reason for it to be tricky dealing with them - best probably to pay off in order of which 0% deal finishes first - if they are all the same length then personally I'd take the smallest first but that's probably an individual choice thing.

    One thing though - remember to set the DD's for these at just above the CURRENT minimum payment. So if the MP is currently £123.76, perhaps set for £125 a month and just leave it there - that way you're paying off a little more each month than you would be with a straight declining minimum payment, without even noticing it (as the current payment will of course be what appears in your budget). It's sort of "debt-busting by stealth methods" if you like! It works excellently for 0% cards too as of course you won't be spending on those. (Cut the cards up/shred them as soon as they arrive to avoid any risk of being tempted!)
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
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