Keep getting in debt

sheepy21 · 15 September 2018 at 5:02PM

-taff wrote: »

Sorry, I read it wrong where you said about the dla...

No worries :beer:

sheepy21 · 15 September 2018 at 5:06PM

Clouds88 wrote: »

You say you can’t live with one car, I would have said the same until we needed to sell one of ours. We are in a dire financial position atm, we have one car, my husband is going back to work 4 days a week in a few days he is going to commute bike or bus/train. I am going to get the bus when I have work on days (I do part time) or I can use the car for night shifts. We have made it work and means we are both getting more exercise now. Unfortunately we need the car for rural school run, so who ever is at home with the kids gets the car. Not sure if this could fit in with your lifestyle? Otherwise not much you can cut back on I don’t think.

Honestly with where we live and my sons disabilities there’s no way I could be without a car. I’d be house bound, unable to get to family or go out at all

it’s a real pain, I know obviously extra car is an added expense but have to have some quality of life and I couldn’t take my son on public transport as things stand with him

Wish I was a millionaire :rotfl:

theoretica · 15 September 2018 at 6:42PM

sheepy21 wrote: »

Ok, food bill can’t really be reduced, a huge amount of that is my sons food as he has special dietary requirements, so about £120+ of that a month is just for him.

So £120 for him and £230 for the two of you? That £230 could be cut.

I didn’t put anything in presents and entertainment as I’m not sure what to put, soa shows us having £330 left as things stand with essentials paid, but then we need to deduct £150 for pension, I’m guessing £35 a month for presents, would like to do £30 a month for our annual holiday and entertainment I guess ideally we’d have about £50 each to spend as we want and I’d like to put £35 a month towards car repairs and MOTs. With current debt repayments those amounts would make us £20 short each month. I’ve tried to trim things down, just not sure I can anymore

I think you need to stop looking at what you want - look at what you have, and decide how to divide it up, especially including paying off that debt. If anything at all comes up that is not in your budget work out where that money is coming from before spending it. That you are down to £12 proves you have spent more than your essentials budget shows. Do you know exactly what you spent it on? You need to know all about your money to stop it just getting spent.

A fridge/freezer dying is only unexpected in happening that week, not that it happens at all. What is your plan for next time it happens? And the boiler (and boiler servicing). You have two cars, they will inevitably die sometime too.

Mobeer · 15 September 2018 at 6:54PM

If your SOA shows a surplus and your real month shows a deficit then as a first\early step I would check where the difference is. Changing SOA numbers up or down won't help you if they don't match your actual spending.

nrsql · 15 September 2018 at 8:45PM

First thought.
You have £331 per month left over. What’s been happening to that.

If you are frugal and committed for a couple of months you will have a £500 emergency fund or know what’s wrong. Keep a record of everything you spend and everything you commit to.
For the next 12 days I would use the £100 if necessary, that’s what it’s for. Everything you spend on yourselves is up for grabs and see what savings you can make catering for your son.

I can remember my father telling me later what they did when mortgage rates went up. Neither my brother nor myself noticed anything except that paperwork got strewn around tables when it was time for bed.

Niv · 17 September 2018 at 9:03AM

How long ago were you debt free? Since July 2018? You mention a fridge going wrong then post up £15k of debt. You need to be honest with yourself on how this happened, cutting back from your SOA will do nothing if you do not face up to where that 15K debt has come from.

Years_of_debt · 17 September 2018 at 9:16AM

Anyone can sit here and point out the flaws in this lady’s life.
Why don’t we do something constructive..
Ring StepChange Charity be honest with them, it may be that a DMP or similar might work do you, freezing all interest and just paying 1 lump sum a month. Give them a ring today if you have an hour. It’s the best thing I did. Anyone can sit here and tel you to “do this and do that” but they aren’t in your position.
Best bet is to ring the experts and let the keyboard warriors make themselves feel good whilst trying to give you “constructive” advice.

Money_maker · 17 September 2018 at 9:31AM

Ringing stepchange is a good idea but pointing out the flaws in this lady's life will stop her slipping into debt for a third time. It's all well and good resolving things in the meantime but she needs to explore how and why she is overspending or it will just continue as a vicious circle. Like Niv said, all debts cleared last year so where has the 15K of debt come from, possibly taken out after house purchase (so recently) rather than before?

Dobbibill · 17 September 2018 at 9:32AM

sheepy21 wrote: »

So we’ve had money problems for years, got into a huge amount of debt last year, but after an inheritance windfall we cleared it and used the rest for a house deposit. So debt free for about 8 months and it was great.

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1692
Benefits................................ 811
Other income............................ 0
Total monthly income.................... 2503

Monthly Expense Details
Mortgage................................ 557
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100 is this paid over the standard 10 months - if so change it to 12
Electricity............................. 69 have you done a comparison lately - this is good but could it be better?
Gas..................................... 0
Oil..................................... 0
Water rates............................. 37 as above with the council tax, this could also be spread over 12 months
Telephone (land line)................... 19
Mobile phone............................ 37 as soon as you are out of contract change yours to SIMO too
TV Licence.............................. 13
Satellite/Cable TV...................... 27 I get what you say about this being your only entertainment but give them a ring and see if they have a better deal - it never hurts to ask
Internet Services....................... 11
Groceries etc. ......................... 350 even with the special dietry requirements, this could be cut a little
Clothing................................ 20
Petrol/diesel........................... 155
Road tax................................ 36
Car Insurance........................... 70
Car maintenance (including MOT)......... 0 there needs to be something in here especially for 2 cars
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 80
Medical (prescriptions, dentist etc).... 24
Pet insurance/vet bills................. 15
Buildings insurance..................... 17 at renewal check out cashback sites like TCB or Quidco to make a net saving
Contents insurance...................... 0
Life assurance ......................... 15
Other insurance......................... 20 what's this?
Presents (birthday, christmas etc)...... 0 never?
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0 don't fund this until you are debt free, it will give you an incentive
Emergency fund.......................... 100 is this something you have just started this month given the total cash figure below? Make sure this is realistic, you don't want to put it away on payday and dip into it a week later because you've made it unrealistic
Total monthly expenses.................. 1772

Assets
Cash.................................... 100
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 204100

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 148637...(557)......2.79
Total secured & HP debts...... 148637....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................13250.....225.......0
Tesco..........................1629......155.......0
Overdraft......................200.......20........0
Total unsecured debts..........15079.....400.......- you need to find out what your APRs are - this will help you to create a plan of action

Monthly Budget Summary
Total monthly income.................... 2,503
Expenses (including HP & secured debts). 1,772
Available for debt repayments........... 731
Monthly UNsecured debt repayments....... 400
Amount left after debt repayments....... 331 where is this? keep a spending diary to see why you haven't got this left.

Personal Balance Sheet Summary
Total assets (things you own)........... 204,100
Total HP & Secured debt................. -148,637
Total Unsecured debt.................... -15,079
Net Assets.............................. 40,384

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

A few things highlighted in red from me.

A spending diary is a must to find out where you are losing over £300 a month. Once you've found it, a few tweaks to your SOA should see you debt busting.

All the best.

-taff · 17 September 2018 at 2:20PM

Years_of_debt wrote: »

Anyone can sit here and point out the flaws in this lady’s life.
Why don’t we do something constructive..
Ring StepChange Charity be honest with them, it may be that a DMP or similar might work do you, freezing all interest and just paying 1 lump sum a month. Give them a ring today if you have an hour. It’s the best thing I did. Anyone can sit here and tel you to “do this and do that” but they aren’t in your position.
Best bet is to ring the experts and let the keyboard warriors make themselves feel good whilst trying to give you “constructive” advice.

As has already been pointed out, it'sall well and good addressing he probem by contacting Stepchange, but there is a definite trend of overpspending and no idea how it happened.
They appear, on paper to be able to service the dents AND have 300 left over, so there are two problems with ringing Stepchange

One - if they went down the DMP route this will affect their credit file for 6 years, when apparently, there is no need to do that according to the SOA.
Two - There is 300 unaccounted for which needs to be addressed. If they do an inventory of what they have spent, on what and when, they should be able to see where this money is being spent and adapt their SOA accordingly, whether that's because it's a necessary spend, or it's one that can be reined in.

Keep getting in debt

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