Third-Life Crisis

145791020

Comments

  • I would definitely consider the balance transfers. BUT since your budget is so tight, check what the minimum payment is each month - I have one CC where it is something like 1.25% and one where it is 2.5 or 3%, which makes a huge difference when you're moving a significant balance and your budget is tight. Also do the sum on where your debts will be in 6 months - if you will have made a significant dent you have an excellent chance of being eligible for balance transfers, but if not then you might be stuck with that horrific APR for a while, which would more than wipe out any benefits.

    Can you repost your current SOA with all the changes you've made since starting out? Someone might be able to come up with some ideas.

    We are exactly the same regarding DMP - we need to be fully solvent in order to access good mortgage rates, which we need in order to extend our house and avoid the cost of moving (which would literally bankrupt us) as we are 5 people in 900 sq ft. It also means, for us, that our debts will be gone more quickly, as we are pushing ourselves to make those bigger payments. Our debt is all 0% now though - in a situation where interest is being added a DMP might actually make repayment quicker as (I think?) lenders stop adding interest.
    Trying to figure out a whole new life. Trying to figure out a whole new budget.
    Divorcing, unclear on final debt total right now, but focusing on building a financial buffer zone.
  • Here is the current SOA.

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 1830
    Partners monthly income after tax....... 2400
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 4230


    Monthly Expense Details

    Mortgage................................ 403
    Secured/HP loan repayments.............. 0
    Rent.................................... 420
    Management charge (leasehold property).. 0
    Council tax............................. 158
    Electricity............................. 30
    Gas..................................... 30
    Oil..................................... 0
    Water rates............................. 18
    Telephone (land line)................... 15
    Mobile phone............................ 50
    TV Licence.............................. 13
    Satellite/Cable TV...................... 20
    Internet Services....................... 20
    Groceries etc. ......................... 180
    Clothing................................ 0
    Petrol/diesel........................... 250
    Road tax................................ 20
    Car Insurance........................... 125
    Car maintenance (including MOT)......... 25
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 20
    Pet insurance/vet bills................. 100
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 13
    Other insurance......................... 20
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 0
    Entertainment........................... 18
    Holiday................................. 0
    Emergency fund.......................... 300
    (Unnamed monthly expense)............... 0
    SE Consumables ......................... 50
    HP Car.................................. 171
    Total monthly expenses.................. 2499



    Assets

    Cash.................................... 0
    House value (Gross)..................... 126000
    Shares and bonds........................ 0
    Car(s).................................. 12000
    Other assets............................ 0
    Total Assets............................ 138000



    Secured & HP Debts

    Description....................Debt......Monthly...APR
    Mortgage...................... 85500....(403)......3.2
    Total secured & HP debts...... 85500.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly...APR
    Lloyds.........................3000......88........26
    Halifax........................2375......32........25
    Barclaycard 1..................6210......140.......18
    Tesco Loan.....................9700......400.......7
    Sainsburys Loan................8720......322.......11
    Mum............................1770......100.......0
    MBNA 5.........................3784......38........0
    MBNA 4.........................2273......30........0
    MBNA 3.........................3959......104.......27
    MBNA 2.........................6316......158.......24
    MBNA 1.........................3340......103.......26
    Barclaycard 2..................9430......216.......18
    Total unsecured debts..........60877.....1731......-



    Monthly Budget Summary

    Total monthly income.................... 4,230
    Expenses (including HP & secured debts). 2,499
    Available for debt repayments........... 1,731
    Monthly UNsecured debt repayments....... 1,731
    Amount left after debt repayments....... 0


    Personal Balance Sheet Summary
    Total assets (things you own)........... 138,000
    Total HP & Secured debt................. -85,500
    Total Unsecured debt.................... -60,877
    Net Assets.............................. -8,377


    Created using the SOA calculator at https://www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.


    Thanks for the advice TOPM, hadn't thought of checking what the minimum payments would be. I would have thought if we continue not adding to the debt for 6 months we should be able to get another 0% offer. We've never not had them available, just sometimes not the best offers. But you never know!
    It is out interest rates that are causing the headache. We are paying over £400 of interest each month :(
  • Well your SOA looks almost as depressing as ours did when we started out (similar debt level too). Twelve months in and things are sufficiently rejigged that it's miles better, plus so many of the things that seemed SO HARD (cutting entertainment and food spends, mostly) now come more easily. So keep the faith that this is it, the worst possible bit. Plough through this for the next few months and things will be better, even though it seems impossible, and glacially slow even when you do see a change. When I look back at where we were 12 months ago, financially and emotionally, it's a million miles away from where we are now, although our debt is still, of course, monumental.

    In terms of the balance transfers, i think it's just a case of sitting and doing the maths, and jumping in if the numbers add up. I can't see why you wouldn't get a 0% in six months if you're getting them now, as long as your debt starts to come down in that time.

    I'm no expert on trimming SOAs, but in your shoes I would try to keep to the SOA you have unless you get hit with another expense/interest rate hike, but here's a few suggestions in case you do need to cut things further...

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 1830
    Partners monthly income after tax....... 2400
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 4230


    Monthly Expense Details

    Mortgage................................ 403
    Secured/HP loan repayments.............. 0
    Rent.................................... 420
    Management charge (leasehold property).. 0
    Council tax............................. 158 over 12 months?
    Electricity............................. 30
    Gas..................................... 30
    Oil..................................... 0
    Water rates............................. 18
    Telephone (land line)................... 15
    Mobile phone............................ 50
    TV Licence.............................. 13
    Satellite/Cable TV...................... 20
    Internet Services....................... 20 £35 for landline plus internet isn't ridiculous, but there might be cheaper deals available. We pay £21 for line rental plus internet, and that was with a £50 cashback offer when we started too. Can't remember if you're stuck in contract at the moment.
    Groceries etc. ......................... 180 This seems pretty good for two people, although it's been so long since I catered for that few I'm not certain!
    Clothing................................ 0
    Petrol/diesel........................... 250 Will this drop when you go on mat leave? That would be a nice saving.
    Road tax................................ 20
    Car Insurance........................... 125 Is this up for renewal any time soon? I feel like this has been discussed before, but I can't remember, sorry.
    Car maintenance (including MOT)......... 25
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 20
    Pet insurance/vet bills................. 100
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 13
    Other insurance......................... 20
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 0
    Entertainment........................... 18
    Holiday................................. 0
    Emergency fund.......................... 300 This is inevitably going to get robbed for things like clothes, haircuts, household maintenance etc, as you aren't saving anything for them, but it is what it is in this case I think. At least if it's mentally the 'emergency fund' you won't spend it without thinking it through.
    (Unnamed monthly expense)............... 0
    SE Consumables ......................... 50 What is this? Apologies if it's been discussed
    HP Car.................................. 171 Do you own the car at the end? Is there a final payment? I have NO IDEA about HP so am not the person to advise on it, it just might give others further info.
    Total monthly expenses.................. 2499



    Assets

    Cash.................................... 0
    House value (Gross)..................... 126000
    Shares and bonds........................ 0
    Car(s).................................. 12000
    Other assets............................ 0
    Total Assets............................ 138000



    Secured & HP Debts

    Description....................Debt......Monthly...APR
    Mortgage...................... 85500....(403)......3.2
    Total secured & HP debts...... 85500.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly...APR
    Lloyds.........................3000......88........26
    Halifax........................2375......32........25
    Barclaycard 1..................6210......140.......18
    Tesco Loan.....................9700......400.......7
    Sainsburys Loan................8720......322.......11
    Mum............................1770......100.......0
    MBNA 5.........................3784......38........0
    MBNA 4.........................2273......30........0
    MBNA 3.........................3959......104.......27
    MBNA 2.........................6316......158.......24
    MBNA 1.........................3340......103.......26
    Barclaycard 2..................9430......216.......18
    Total unsecured debts..........60877.....1731......-
    The MBNA interest in particular is horrible. Does your payment affect the 0% balance rather than the interest bearing balance? It did on my MBNA card, which is tedious in the extreme.


    Monthly Budget Summary

    Total monthly income.................... 4,230
    Expenses (including HP & secured debts). 2,499
    Available for debt repayments........... 1,731
    Monthly UNsecured debt repayments....... 1,731
    Amount left after debt repayments....... 0


    Personal Balance Sheet Summary
    Total assets (things you own)........... 138,000
    Total HP & Secured debt................. -85,500
    Total Unsecured debt.................... -60,877
    Net Assets.............................. -8,377


    Created using the SOA calculator at https://www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.
    Trying to figure out a whole new life. Trying to figure out a whole new budget.
    Divorcing, unclear on final debt total right now, but focusing on building a financial buffer zone.
  • Goingroundincircles
    Goingroundincircles Posts: 106 Forumite
    edited 17 February 2018 at 5:28PM
    Thanks TOPM, have commented on your comments to give more info. You're right - it is utterly depressing, but hopefully as bad as it gets. Time seems to move so slowly when you're thinking about/paying off debt.

    Having spent some more time staring at our sheet it isn't all doom and gloom. If we were to carry on paying the same amount each month (nearly £1800!!!) until all the debt was cleared it would be gone in 4 years and 2 months. The problem is it really isn't sustainable to keep paying that much and as some payments come to end we'll need to boost other pots.

    Statement of Affairs and Personal Balance Sheet

    Household Information
    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 1

    Monthly Income Details
    Monthly income after tax................ 1830
    Partners monthly income after tax....... 2400
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 4230

    Monthly Expense Details
    Mortgage................................ 403
    Secured/HP loan repayments.............. 0
    Rent.................................... 420
    Management charge (leasehold property).. 0
    Council tax............................. 158 over 12 months? It is actually over 10 months and I haven't split it over 12 as the small saving each month would get frittered away. So instead it's a bonus on the two months we don't have to pay it and can be put towards other things
    Electricity............................. 30
    Gas..................................... 30
    Oil..................................... 0
    Water rates............................. 18
    Telephone (land line)................... 15
    Mobile phone............................ 50
    TV Licence.............................. 13
    Satellite/Cable TV...................... 20
    Internet Services....................... 20 £35 for landline plus internet isn't ridiculous, but there might be cheaper deals available. We pay £21 for line rental plus internet, and that was with a £50 cashback offer when we started too. Can't remember if you're stuck in contract at the moment. Our contract ends in July so we'll definitely be shopping around for a better deal then, with the help of topcashback!
    Groceries etc. ......................... 180 This seems pretty good for two people, although it's been so long since I catered for that few I'm not certain! We always struggle with the food budget - this one we seem to be able to stick to
    Clothing................................ 0
    Petrol/diesel........................... 250 Will this drop when you go on mat leave? That would be a nice saving. Probably not unfortunately. The majority of the fuel is my husband but it will be interesting to see
    Road tax................................ 20
    Car Insurance........................... 125 Is this up for renewal any time soon? I feel like this has been discussed before, but I can't remember, sorry. One has just been renewed, the other is due in April. An unlucky year a couple of years back made my husband pretty tricky to insure :(
    Car maintenance (including MOT)......... 25
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 20
    Pet insurance/vet bills................. 100
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 13
    Other insurance......................... 20
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 0
    Entertainment........................... 18
    Holiday................................. 0
    Emergency fund.......................... 300 This is inevitably going to get robbed for things like clothes, haircuts, household maintenance etc, as you aren't saving anything for them, but it is what it is in this case I think. At least if it's mentally the 'emergency fund' you won't spend it without thinking it through. I should probably rename this the Maternity Fund. The plan is to give it to a family member or to put it in a savings account which is more difficult to access. That way we'll really have to consider whether it's worth dipping into, every penny used will be less time off on maternity leave!
    (Unnamed monthly expense)............... 0
    SE Consumables ......................... 50 What is this? Apologies if it's been discussed This is a new addition to the budget. It occurred to us we'd never budgeted for consumables for my husband's work. Another reason why we'd always end up turning to the credit cards. Since it's new we don't know if it's accurate so it could go up/down!
    HP Car.................................. 171 Do you own the car at the end? Is there a final payment? I have NO IDEA about HP so am not the person to advise on it, it just might give others further info. I wish I had a sensible answer for this but I think at the end if I want to keep the car there is a final payment to be made. Otherwise you give it back and start a new HP plan on a new car :( Very rash decision which wasn't thought through (as usual)
    Total monthly expenses.................. 2499


    Assets
    Cash.................................... 0
    House value (Gross)..................... 126000
    Shares and bonds........................ 0
    Car(s).................................. 12000
    Other assets............................ 0
    Total Assets............................ 138000


    Secured & HP Debts
    Description....................Debt......Monthly.. .APR
    Mortgage...................... 85500....(403)......3.2
    Total secured & HP debts...... 85500.....-.........-

    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Lloyds.........................3000......88....... .26
    Halifax........................2375......32....... .25
    Barclaycard 1..................6210......140.......18
    Tesco Loan.....................9700......400.......7
    Sainsburys Loan................8720......322.......11
    Mum............................1770......100...... .0
    MBNA 5.........................3784......38........0
    MBNA 4.........................2273......30........0
    MBNA 3.........................3959......104.......27
    MBNA 2.........................6316......158.......24
    MBNA 1.........................3340......103.......26
    Barclaycard 2..................9430......216.......18
    Total unsecured debts..........60877.....1731......- The MBNA interest in particular is horrible. Does your payment affect the 0% balance rather than the interest bearing balance? It did on my MBNA card, which is tedious in the extreme. Hmm I can't actually remember. Need to look into this and not forget that some 0% offers end at the start of next year :(


    Monthly Budget Summary
    Total monthly income.................... 4,230
    Expenses (including HP & secured debts). 2,499
    Available for debt repayments........... 1,731
    Monthly UNsecured debt repayments....... 1,731
    Amount left after debt repayments....... 0

    Personal Balance Sheet Summary
    Total assets (things you own)........... 138,000
    Total HP & Secured debt................. -85,500
    Total Unsecured debt.................... -60,877
    Net Assets.............................. -8,377
  • Hmm. There is not much wiggle room! Any way your OH can pick up more work, or even a second job for a few months? A couple of hundred pounds extra income a month would allow you to make a bit of headway. If you don't do something I fear things will start to spiral out of control and you'll have no choice but to do a DMP. At the moment you are still just about hanging on in there, but it is a precarious position.

    I am concerned that soon you will want to start paying things for the baby and you will need some maternity clothes at some point, surely? I know these can (and probably will) come out of the £300, but that is kicking the can down the road and storing up future shortages.

    Would you Mum allow you to drop the £100 repayment to her and use that to get your snowball going? It's crazy to be paying her that back given the interest rates on some of your other debts. I know it's not great owing family money, but it would give you a bit of momentum.

    And I still think I would do everything in my power to get that car payment down. I don't know much about HP but the motoring board might be able to advise. I just renewed my insurance for the year for £390 - it is inconceivable to me that yours is so much, even for two vehicles...but there you go.

    You are right that paying £1800 a month is not sustainable for four years...

    Well done on sorting the appliance and bin cleaning, though! Chin up. There is always a way round, but it will involve some tough decisions.
  • Hi Magpie, funnily enough my OH has just signed up with an agency who do shop fits. It's adhoc work which you can pick or choose depending on your availability so great for his quiet times. He's doing his first shift tonight to test it out. Unfortunately it's in central London, so about an hour and a half drive from us but it's night time work and time and a half therefore the extra time/fuel is covered. Fingers crossed this could be the boost we need.
    He has the potential for much bigger earnings than our SOA, that was a reasonable figure based on his minimum earnings. He's earnt that much in Feb even though he only worked half of the month so I'm now helping him to advertise and get more work booked in!

    I am determined that nothing except actual emergencies will make us dip into the £300pm savings. We're nearly there with baby bits (assuming i haven't missed anything) thanks to some Christmas/birthday money we used in the sales, nectar points and gifts from family/friends. So far we've got:
    - Pushchair/travel system
    - Crib with bumper
    - Moses basket
    - Sheets
    - Baby grows, hats, socks etc
    - Changing mat
    - Nappies
    - Blankets
    - Muslins/burp cloths
    - Towels

    Are we missing anything important??

    I had also been thinking about speaking to my mum about lowering my repayments to her, so glad someone else mentioned it! Even £25 less a month would help go towards the CC's.

    And back to the cars! I'm guessing there would be a penalty for ending the contract early and not sure how it would work. It might say in the paperwork, I will have to check. We don't have any savings to buy a replacement though and I would then have to pay for tax/MOT/service which I don't currently. So I guess I'd need to weigh up where the money would come from and then what the monthly cost would be. More research to be done here.
    And with the insurance - my OH was actually uninsurable last year following an unlucky year of accidents for the both of us (resulting in that rushed HP car) and I had to insure myself on his van with his as the named driver. This year we've managed to do it in his name but with no NCD it was expensive. Mine is due for renewal in Apr and should come down a bit now. Mine also used to be around £300 for the year but nearly doubled following an accident!
  • Good: Did a £25 food shop this week :) We're working our way through everything in the cupboards.

    Bad: Bought a takeaway :(

    Felt guilty and didn't even really enjoy it so lesson learnt. Must make sure there are always some quick and easy meals in the house though. Even if is a couple of microwave meals in the freezer.

    THIS WEEK:
    1. Sell or donate the pile of unwanted things in spare room - 'morning' sickness still winning over productivity
    2. Work out how to pay for two upcoming hen weekends
    3. Two bank switches
    4. Under budget food shop
  • I had exactly the same thing with a takeaway fairly on in our DF journey and remember feeling exactly the same - I think I even posted something very similar in my diary!

    Great news about the extra work for DH. It all helps.
    Trying to figure out a whole new life. Trying to figure out a whole new budget.
    Divorcing, unclear on final debt total right now, but focusing on building a financial buffer zone.
  • warby68
    warby68 Posts: 3,017
    Name Dropper First Post First Anniversary
    Forumite
    ToPM is going to be a great help here due to the similarities and being able to see what lies ahead. She explains the 'feelings' around debt and lifestyle and what it takes to change for the long term very well.

    What happened to the Land Rover you were going to sell to pay your parents back? Is that still available to generate a lump sum for something by any chance?

    I'm NOT good at the gentler stuff around here as my situation is really different ( I don't have debt and never have and am much older but we do have a big personal spending commitment to fund where we are nearly 7 years through out of 9 so that's why I hang around for tips). However, the upsides here are that you're both young with good earning potential and starting your family will hopefully be the jolt to kickstart your new approach to money. Time is on your side to get this sorted and effectively start again. Try and remember that not much has to be set in stone forever - you can change your mind as you go, even as drastically as some form of DMP if you can't get the interest charges under control or something else unexpected hits you.

    I'm with others on your motor expenses being too much of your income - I'd give that a really good hard stare to see if something can be done.

    I'd also check your mortgage terms to see whether you're eligible for interest only or some kind of payment break to cover maternity or similar, assuming you haven't already.
  • Hi Goingroundincircles,

    I nearly leapt out of my tube seat with joy :j at the first part of your post! If you can work as a team to get your OH working more hours that will REALLY help. I don't want to bang on and I do want to be positive, but you really need to get a grip on all of this while you still have some choices, rather than running out of road and having decisions imposed on you. If your OH can work, work work and you use the extra income wisely I think it would be a massive help.

    And yes, do speak to your mum. I know it is psychologically difficult to have those types of conversations, and owing money to family is difficult, but you are in such a tight spot with very little wriggle room that anything you can do to get those high-interest cards paid down will help. Of course, you'll need to make sure you aren't leaving your Mum in the financial lurch.

    And please do try and do the research on the car. I know it's complicated, but I feel like you regard the car decision as a bad one but one which is done and can't be revisited. It's easy to think of it as a 'sunk cost' and that you'd be throwing good money after bad if you gave it up, but you really need to explore every option you can with your car costs - as a household they are taking up far, far too much of your income. I know you can only do what you can within the HP parameters, but it is worth exploring every option. Please post on the motoring board!

    Not so great about the takeaway, but it's done now. I suspect there may be an element of 'what's another £20 when we owe so much' but perhaps if your OH is able to increase his income and you can start to turn the ship around that will help you stay on the straight and narrow and perhaps be an incentive to stop this type of spending. We batch cook as much as we can as knowing there is something we can get out of the freezer in the morning that will be ready to go in the evening really helps stop us ordering takeaways.

    I can't advise on your list of baby stuff, but I know lots of people can!

    Keep going. you really need to put the next few months to good use so that when the baby arrives you are comfortable living on your budget and can let things tick down in the background. M100
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