SOA help please

rainbow_wishes · 13 May 2018 at 7:45PM

Hi All, I hope this is ok to post, let me know if I should move it. We are lucky enough to have cleared the loans/unsecured debt and I’m keen to keep it that way.

DH & I are currently trying for our second baby. If we are lucky enough to conceive, I am hoping to take 9 months maternity leave and my employer only pays full pay for 6 weeks, 12 weeks at half pay then SMP only so I will need around £5-6k in savings to see us through. I have set up a standing order for £200 per month into savings but we are finding this leaves us tight each month so I was hoping some of you lovely people would comment on our SOA (below) to see if we can save anything off our outgoings to make this savings target more comfortable. Also my husband is very unhappy in his current job and hopes to change careers to help his mental health which will involve a drop in income by £400 pm so we need to see if this is affordable.

Household Information:
Number of adults in household........... 2
Number of children in household......... 1 (plus I have a stepdaughter - see child maintenance below)
Number of cars owned.................... 2

Monthly Income Details:
Monthly income after tax................ 1913.77
Partners monthly income after tax....... 1804.33 (this is 4 weekly)
Benefits................................ 82.8 (child benefit)
Other income............................ 0
Total monthly income.................... 3800.9

Monthly Expense Details
Mortgage................................ 849.5
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 12.04
Council tax............................. 146 (over 12 months)
Electricity............................. 82 (includes gas)
Gas..................................... 0
Oil..................................... 0
Water rates............................. 35.11 (metered and over 12 months)
Telephone (land line)................... 37.01 (includes internet)
Mobile phone............................ 87.81 (2 phones)
TV Licence.............................. 12.54
Satellite/Cable TV...................... 29.56
Internet Services....................... 0
Groceries etc. ......................... 550 (includes pet food)
Clothing................................ 0
Petrol/diesel........................... 450 (2 x long commutes)
Road tax................................ 38.33
Car Insurance........................... 44.78
Car maintenance (including MOT)......... 128
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0 (covered by childcare vouchers)
Other child related expenses............ 60.67 (swimming lessons)
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 25
Buildings insurance..................... 10.08 (includes contents)
Contents insurance...................... 0
Life assurance ......................... 89.42
Other insurance......................... 74.8
Presents (birthday, christmas etc)...... 125
Haircuts................................ 56.7
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 18
Gym..................................... 15.99
Course Fees............................. 73.6
Bank Account Fee........................ 25
Savings................................. 260 (includes child savings accounts x 2)
Child Maintenance....................... 250
Total monthly expenses.................. 3596.94

Total monthly income.................... 3,800.9
Expenses (including HP & secured debts). 3,596.94
Available for debt repayments........... 203.96
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 203.96 (doing spending diary as this is never left over)

Total assets (things you own)........... 258,140
Total HP & Secured debt................. -201,039
Total Unsecured debt.................... -123.61 (this is a Lloyd’s cc which will be cleared when I get paid on 21st)
Net Assets.............................. 56,977.39

Happy to answer any questions. Thanks in advance

Fosterdog · 13 May 2018 at 8:16PM

rainbow_wishes wrote: »

Hi All, I hope this is ok to post, let me know if I should move it. We are lucky enough to have cleared the loans/unsecured debt and I’m keen to keep it that way.

DH & I are currently trying for our second baby. If we are lucky enough to conceive, I am hoping to take 9 months maternity leave and my employer only pays full pay for 6 weeks, 12 weeks at half pay then SMP only so I will need around £5-6k in savings to see us through. I have set up a standing order for £200 per month into savings but we are finding this leaves us tight each month so I was hoping some of you lovely people would comment on our SOA (below) to see if we can save anything off our outgoings to make this savings target more comfortable. Also my husband is very unhappy in his current job and hopes to change careers to help his mental health which will involve a drop in income by £400 pm so we need to see if this is affordable.

Household Information:
Number of adults in household........... 2
Number of children in household......... 1 (plus I have a stepdaughter - see child maintenance below)
Number of cars owned.................... 2

Monthly Income Details:
Monthly income after tax................ 1913.77
Partners monthly income after tax....... 1804.33 (this is 4 weekly)
Benefits................................ 82.8 (child benefit)
Other income............................ 0
Total monthly income.................... 3800.9

Monthly Expense Details
Mortgage................................ 849.5
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 12.04
Council tax............................. 146 (over 12 months)
Electricity............................. 82 (includes gas)
Gas..................................... 0
Oil..................................... 0
Water rates............................. 35.11 (metered and over 12 months)this is quite high
Telephone (land line)................... 37.01 (includes internet)this is also high
Mobile phone............................ 87.81 (2 phones)this is also very high
TV Licence.............................. 12.54
Satellite/Cable TV...................... 29.56combined with separate internet package is high
Internet Services....................... 0
Groceries etc. ......................... 550 (includes pet food)at least double what it could be
Clothing................................ 0 you never buy clothes?
Petrol/diesel........................... 450 (2 x long commutes)
Road tax................................ 38.33
Car Insurance........................... 44.78
Car maintenance (including MOT)......... 128 where are you saving this? You show no cash assets
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0 (covered by childcare vouchers)
Other child related expenses............ 60.67 (swimming lessons)
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 25
Buildings insurance..................... 10.08 (includes contents)
Contents insurance...................... 0
Life assurance ......................... 89.42 this is incredibly high, can you shop around for a better deal?
Other insurance......................... 74.8 again very high, what is it for? Is it really needed?
Presents (birthday, christmas etc)...... 125 where is this being saved? could be cut down a fair bit
Haircuts................................ 56.7incredibly high
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 18 as a home owner you need more and where is the £18 being saved?
Gym..................................... 15.99
Course Fees............................. 73.6 how long is this for?
Bank Account Fee........................ 25 can you shop around?
Savings................................. 260 (includes child savings accounts x 2) again where are these savings as you show no cash assets
Child Maintenance....................... 250
Total monthly expenses.................. 3596.94

Total monthly income.................... 3,800.9
Expenses (including HP & secured debts). 3,596.94
Available for debt repayments........... 203.96
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 203.96 (doing spending diary as this is never left over)

Total assets (things you own)........... 258,140
Total HP & Secured debt................. -201,039
Total Unsecured debt.................... -123.61 (this is a Lloyd’s cc which will be cleared when I get paid on 21st)
Net Assets.............................. 56,977.39

Happy to answer any questions. Thanks in advance

I'll elaborate on my comments in red above here. The good thing with pay every four weeks is a bonus 13th payment each year.

Your water rates could be lower, take shorter showers, less water in the bath, don't leave taps running, put a brick (or water hippo) in the cistern/s so flushing uses less water, only boil what you need, only use the minimum needed when cooking not filling a whole pan with water if half would do. It all adds up.

Shop around for a deal on your phone and TV, you shouldn't need a call package with a mobile too so drop to line rental and internet only, Sky were offering 12 month contracts for a basic tv package, line rental and unlimited internet for £27.99 a month, see if that is still running.

Your mobile bills are extortionate, shop around for sim only if out of contract and keep the same handset instead of upgrading, if still in contract see if you can lower your tariff down a level or two.

Groceries are very very high for such a small family, two adults can be well fed on £150-£200 a month, add a bit on top for pet food and for children and it still wouldn't be anywhere near £550. Drop down a level with brands, shop in Aldi and Lidl (home bargains for toiletries and cleaning supplies), cook from scratch and use meal plans so you only buy what you need.

You are spending an awful lot on insurance, there must be some better deals out there.

Haircuts, go less often, change salons or use a local college for cheaper cuts, £20 a month should be plenty for this.

Presents again are high, set a limit to how much you will spend and don't go overboard especially while the kids are young.

You bank account fee I'm assuming is for a premium account, shop around because you can currently get cashback if you switch to Nationwide, more if referred by someone and their premium account is only £15 a month.

Then it's onto the savings, are you actually putting the money aside meaning you do have cash assets or is this what you want to put aside meaning you are actually spending even more than you realise?

Well done on the spending diary, it certainly sounds like it's needed.

The good thing though is that you are so close to being debt free and with some small changes you could be saving closer to £500 a month while still living to a good standard, even more if you wanted to really scrimp and save (although you have enough income to allow certain luxuries

)

JayRitchie · 13 May 2018 at 8:17PM

Do you have two cars? There is not balance for car finance - do you own outright and if so when will the cars need replacing?

rainbow_wishes · 13 May 2018 at 8:34PM

Thanks for your comments. I couldn’t believe what the spending diary told me we spend on groceries. I do my main shop at Aldi for £50-65 per week but get other bits from Tesco as needed and this is where I fall down as I don’t stick to a list!

I did miss clothes but mainly buy clothes for my son second hand in bundles and occasional bits from supermarkets. Should be around £80 per year.

I don’t think the assets copied across properly as I have £3640 already in the ‘baby fund’ which £200 per month goes into. The kids have around £1k each in their own accounts which I don’t count as my asset as I can’t access it. I have an account for a lot of our bills (tv license, car & home insurance,car tax & maintenance, swimming lessons, vet bills and house maintenance) which £330 per month goes in. There is only £178 in
there currently as our home ins and 2x car ins and 1x car tax was all paid over the last 3 months and I’ve just paid for swimming. Tv license due out but enough to cover this in there. I’ve today totalled all these bills and £330 isn’t quite enough to cover our boiler service or sink breaking last year so I’ll up this to £380

I will look into the other suggestions you made

rainbow_wishes · 13 May 2018 at 8:42PM

Yes we have two cars owned outright but need to replace one in the near future but baby plans are the priority. It’s just had a £500 repair so I’m not keen to get rid just yet. It’s worth around £800

JayRitchie · 13 May 2018 at 8:54PM

At the moment you have a surplus of £200 a month. Add back £200 saving on groceries, child savings of £260 and £40 on phones/ internet gives a surplus of £700, Not too bad but I'm a bit concerned that you will get a sudden car cost or house repair, and your other spending is not high (no holidays or entertainment that could be cancelled for a period to cover a major bill).

Have you budgeted how your costs would change with a child? Child care costs? Additional benefits?

D_M_E · 13 May 2018 at 9:05PM

What do you do at the gym? - Why pay for torture when y6ou can do it yourself for free?

A few suggestions which may help you cancel the gym membership - don't forget to read closely their cancellation policy and make sure both you and they stick to it should you decide to cancel:

Try running and/or brisk walking - both for free.

Weightlifting - fill a couple of 2 liter bottles with water and use those, one in each hand, for weightlifting practice.

Cycling - if you have a bike with gears, try using it with the gears set for hill climbing.

Try taking the stairs instead of the lift or escalator.

If you live in a mhilly area, try running or walking up and down a few of them - the steeper the better.

theoretica · 13 May 2018 at 9:14PM

You have two long commutes at the moment. One of those you won't have to pay during maternity leave. But have you considered moving to reduce this, perhaps depending on where your OH's new job is?

rainbow_wishes · 13 May 2018 at 9:37PM

Thanks for the comments. In terms of a significant car or house repair we would have to use baby fund savings. The house is 6 years old and well maintained so feel secure here. My OH’s car is a worry though

Moving is not an option. My son is well settled with his childminder and is looked after by my parents one day a week and they are local. Moving would increase this childcare cost and remove our support network. I won’t move jobs until I’ve had another baby due to maternity rights.
Plus it would cost £5-8k in moving costs we can’t afford.

Second baby is affordable as childcare will reduce dramatically for our son when he goes to school and the £200 pm we are saving now used to go on his childcare before his 30 hour funding started in April.

I think it will be tight until baby no.2 gets funding at age 3 but I think that’s normal for young families starting out. We are happy to have no holidays for a few years but if my oh gets a bonus we may go somewhere in the UK

rainbow_wishes · 13 May 2018 at 9:40PM

The gym membership is my oh’s and he lifts heavy weights that we couldn’t replicate at home. He needs this outlet with a stressful job and it’s the cheapest one around that’s open 24 hours

I might look at your suggestions for myself though

Deep_In_Debt · 13 May 2018 at 10:11PM

Nothing much further to add to the other comments.

Haircuts - can you get someone to come to your house to do cuts and what you need? I recently found a mobile hair dresser who came to my house and did a wet cut for £18 - I washed my hair before she came and she did the cut and a nice cut too.

SOA help please

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free