SOA, help please!

First thing I'm going to say is go to the link in my signature (or in the sticky post at the top of the board) and fill in the SOA calculator that we recommend from Stoozing.com - it means there's less risk of things getting missed and more requirement for getting fine detail in - which again makes you think more about where money is actually going.

I'll comment in red as usual on your post below but I suspect the full SOA might be more practical use to you, going forwards.

stinabean wrote: »

Hiya

So we're definitely spending more than we earn as we're both constantly, more me than the OH, in our overdrafts.

Basic SOA below. Have not included things like clothes, prescriptions etc as these just don't currently happen. You don't wear clothes? That must make life interesting! Seriously - you need to budget something for clothing, even if just "socks & pants" money for adults and basic essentials for children.A lot of kids clothes past underwear can be bought second hand from charity shops or even eBay for pennies, which is a help. We also don't save up for the MOT etc and we have to scrabble for the money when it comes around - obviously I'd love to change this but need to crush some of this debt first. No - wrong way of thinking about it. You can't crush the debt until you start to budget properly. The budget is the first step, sticking to it is the second, paying off the debt, bizarrely as it sounds, can't happen properly until you have the first two bits in place.

My salary - £1,262, will change to 1,350 in Jan 2020 Every little helps but right now, it is as it is.
Partners salary - £1,250 Can either of these salaries be increased at all
Benefits - £80 On that income are you sure this is all you're entitled to? Is the figure correct too - that sounds like a very "round" amount.
Total - £2,592

Monthly Outgoings:

Mortgage/Rent - £574.82
Council Tax - £125 Do you pay this over 12 months or the default 10? If 10 then get it swapped to 12 months, that will help with budgeting.
Water - £24
Gas - £20
Electric - £40 How do you heat your home? This electricity is high for people who use gas for heating.
TV License - £12.88
Phone - £29 (this is both contracts) Either of you getting close to end of contract so can switch to cheap SIM only?
Food - £300 (this is approx what we spend, willpower needed to shrink it down) Forget the willpower and just shrink it - a family of 4 can live on a good deal less than that. Analyse what sort of foods you spend on and work out where savings can be made, make sure you use the cheapy supermarkets where you can and plan meals around what is seasonal, plentiful and cheap.
Petrol - £40
Life Insurance £27.95
Home Insurance - £22
Car tax - £17.06
Car insurance - £35.51
Car - £219.87
Virgin - £78.87 – contract ends Aug and can't wait Riung them 30 days ahead of the end of the contract and give notice that you're leaving at contract end - and refuse to accept anything than the rock bottom deal (check what the best basic deal new customers are being offered if you want to stay with them). That way the new price will kick in as soon as the contract ends. Look to ditch any paid TV packages and go freeview.
Netflix - £9.99 Definitely ditch the paid TV package above - I'd lose this too if I were you.
Spotify - £10 Just cancel it - if you're in your OD then you're spending money that isn't yours on this.
PSN - £6.99 What's this? Can it be cancelled?
Vets - £14 is this is lieu of pet insurance?
Childcare - £735 (this varies, so have gone with the most expensive month) Ouch. There's painful. make sure that on the cheaper months you pay any surplus from this against debt.

Total: £2,342.94

Debts
Boiler – 83.33 till dec 2019
Windows - £39.10 till 2022

= £122.43 out

= £2,465.37 total

Credit cards:
MBNA - £28 a month, owe £1,568.13 (me) You need the interest rates on all of these cards, or if they are on 0% deals, a note of when those will finish.
Halifax - £41 a month, owe £1633.98 (me)
Barclays - £29 a month, owe £1147.31 (me)

Barclays - £22 a month, owe £948.15 (OH)
Lloyds - £20 a month, owe £1,950 (OH)

= £140

Total outgoings - £2,605.37

So monthly we are short by an average, as childcare changes per month, of £13.37.

It doesn't seem much to be in the red, however I would love to have some "spare" money to throw at credit cards.

I know things like Spotify, PSN etc aren't needed. This is my OH and as he doesn't get to spend on himself, this is it for him. But he doesn't have the money for it, does he? When you have money, you get to use that money on the frilly, fluffy stuff. when you don't, you can't - to put it bluntly - keep spending on those things. It just doesn't work that way.
Will be cancelling Virgin next month as the contract ends in Aug.
Can't downsize the car as we need a big car with a baby and a dog, all our family lives 4 hours away so large car to carry all our stuff. how large is large? You could get all of the above and some luggage in something the size of my Renault Clio easily while the child is smaller. Ford focus is a "family car" for your size of family - people carrier or SUV? Bigger than needed.

Any tips? I'm also looking for a second job but is proving difficult.

Please be kind, and sorry for rambling.

OK - so the task to start with is to pick up on the expenses you've missed, many of which have already been mentioned, and then to work out where you can save on those you know about.

Cutting back to a basic Phone/internet package and changing the deal regularly could gain you £590 a month. Get your OH to choose between the entertainment stuff - Netflix OR spotify (but tell him that it's easier to keep small people quiet with netflix - just saying) that ticks the entertainment box as yes, you do BOTH need some entertainment.

Budgeting for stuff like car repairs etc will help you in the long term so use some of the money you save from cutting the groceries spend down for that. Use some more to start an emergency fund.

I assume your housing cost is mortgage as you're paying life insurance and the home insurance cost suggests building & contents, plus the spends for windows/boiler. That makes an emergency fund a necessity for you, so definitely focus on starting that. Similarly unless you don't mark christmas at all (or any other festivity in its place), you do need to set aside at least enough to cover the basics that you ARE going to spend. It's coming, it'll always be coming, and you may as well work with it rather than it hitting you in the pocket at the time. As children get older not doing christmas also becomes less of an option, remember.

Increasing income is the best way out of this, without wishing to be rude, why are you both on quite such low incomes? is there any way you can improve on this - ie working less than full time hours an increase to F/T for example? You've said you're looking for a second job but what about your OH? His earnings are currently lower than yours - is there anything he can do to increase his contribution? As someone else says it's by far the easiest way to make an impact on your debts and in the longer term, improve your quality of life.

Don't be too despairing - your situation is definitely not the worst we've seen and IS fixable, with some work and a few sacrifices. :beer:

Your child care costs are excessive. How old is the child? No chance of home/ flexible working? Have you checked your childcare entitlement?


If one of you became a stay at home parent ( the lower salary), you will probably be better off after the universal credit and childcare saving...

If you work from home full time why spend £700 a month on childcare? Could you reduce it a bit?

As you are working from home, how fixed are your work hours? If you moved as much of your work as possible to when your partner is home then could you save on childcare?

Why not downgrade the Spotify to the free version and just listen to some ads to save the money?