Embarrassed & a little scared

LittleMissKitty · 28 March 2018 at 12:33PM

Well the title says it all really _pale_

Last time I was on here was nearly 3 years ago. I was debt free and planning a big house move and we were due a pretty big inheritance payment.

Suffice to say things didn't go entirely to plan (though we made it in the end!) and now I am, decidedly, NOT debt free.

We realised, at the end of last year, that we'd seriously screwed up the finances but it took for the car, the septic tank, and the washing machine to all die simultaneously last month before I really took a proper look at the situation.

This morning I added it up and I'm horrified. We owe over £35k unsecured. I have no idea how we're ever going to get out of this. The house is falling apart around us and we can't afford to do any work on it, the car is due an MOT early May and it doesn't have a hope of passing without work (and we're not in a position to be without it.) and, on top of all of that my husband has just had his payslip and has, apparently, earned MORE than we expected this year so we're going to take a tax credits hit in a few months too.

I'm not sure what we can cut back on as, despite our MASSIVE overspend, I'm actually still fairly on top of the necessities so our utilities and bills are all on the cheapest tariffs, we shop around and stick to own brand, never have haircuts, buy clothes from ebay (or Primark if I'm splashing out :rotfl:) hubby takes packed lunches to work etc etc etc.

I'm sure I'll get myself back on form but today I'm reeling from the shock and it's not nice.

Mnd · 28 March 2018 at 1:12PM

People will offer you plenty of advice, first one will be to post a statement of affairs and work from there

LittleMissKitty · 28 March 2018 at 2:32PM

Thanks Mnd, I've pasted my SOA below

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 5
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 2100
Benefits................................ 1001
Other income............................ 0
Total monthly income.................... 3101

Monthly Expense Details
Mortgage................................ 500
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 117
Electricity............................. 83
Gas..................................... 10.4
Oil..................................... 75
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 54
TV Licence.............................. 12.76
Satellite/Cable TV...................... 0
Internet Services....................... 88
Groceries etc. ......................... 433
Clothing................................ 40
Petrol/diesel........................... 350
Road tax................................ 28
Car Insurance........................... 145
Car maintenance (including MOT)......... 40
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 16
Pet insurance/vet bills................. 16
Buildings insurance..................... 14
Contents insurance...................... 0
Life assurance ......................... 14
Other insurance......................... 21
Presents (birthday, christmas etc)...... 120
Haircuts................................ 0
Entertainment........................... 175
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2392.16

Assets
Cash.................................... 0
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 202500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 101000...(500)......3.4
Total secured & HP debts...... 101000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Tesco Loan.....................4757......91........3.6
Nationwide CC1.................1875......25........0
Nationwide CC2.................1275......25........0
FIL............................25750.....0.........0
Creation.......................235.......11.76.....17.9
Total unsecured debts..........33892.....152.76....-

Monthly Budget Summary
Total monthly income.................... 3,101
Expenses (including HP & secured debts). 2,392.16
Available for debt repayments........... 708.84
Monthly UNsecured debt repayments....... 152.76
Amount left after debt repayments....... 556.08

Personal Balance Sheet Summary
Total assets (things you own)........... 202,500
Total HP & Secured debt................. -101,000
Total Unsecured debt.................... -33,892
Net Assets.............................. 67,608

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

LittleMissKitty · 28 March 2018 at 2:36PM

I'm wracking my brains to work out where the rest of the money goes?!
I'm going to do a budgetbrain to see because NO WAY do we have £500 left a month!

elsien · 28 March 2018 at 2:40PM

House maintenance? Nothing on there for that and if the house is a bit tired then that can soon mount up.
(No emergency fund either.....)

LittleMissKitty · 28 March 2018 at 2:50PM

I've just gone through Budgetbrain and it's far less pleasant.

If we're really careful we can just about break even each month.

If I cut down the Christmas and birthday budget we can probably afford to make a bit more of a payment towards the credit cards but it's fairly tight even now and I hate that the kids will miss out because of our stupidity. The second CC is getting uncomfortably close to the end of the 0% interest period so it's probably worth it.

FBaby · 28 March 2018 at 5:52PM

Do you use your Tesco CC for your food shopping? Or was it for very specific items ordered online? The big chunk of your debt is to your FIL. What arrangement do you have in place to repay it?

How old are your children?

LittleMissKitty · 28 March 2018 at 6:50PM

It was a Tesco Loan, we got it to buy a car when the engine seized on our old one. We live 10miles outside town and the nearest bus stop is over 3miles away so we can't manage without a car unfortunately.
We're not paying FIL at the moment, at his request, because he wants us to concentrate on the interest accruing debts first.

The kids are 5, 7, 9, 11 & nearly 13.

CapricornLass · 28 March 2018 at 7:51PM

I've had a quick look, but its very difficult to see where you can make savings - i think you are making the pennies stretch brilliantly as it is, especially as there are 7 of you.

You and your husband could agree not to buy each other presents, or just have a couple of token things to open for Christmas ( one of my friends and her husband have challenged themselves to spend no more than £5 on the other's Christmas stocking, and don't spend anything else on Christmas. You will have to keep your eyes peeled all year, and snap things up when you see them, but maybe something similar for you and hubby?)

I can understand that you don't want your kids to suffer, but you may have to cut back. Depending on your philosophy, you might want to include things like socks and pyjamas in with their Christmas presents, especially if they are the sort you wont normally pay out for - I'm thinking of Superman/Frozen/ insert name of current superhero here. Again you may have to keep a weather eye out throughout the year. If its any consolation, I started off spending £100 for Birthdays and Christmas for each of my boys when they were born (they are now 31 and 29). I haven't increased it since because I simply didn't have the money and in fact birthday money has now gone down to £50. Where I have really managed to save is on the cost of Christmas food. Every year, I have cut back more and more, especially on the Crisps, biscuits cakes and chocolate, and somehow we haven't missed any of it.

I've just wondered - is it possible to shave anything off the entertainment bill, if only for a few months?

If the £500 is vanishing down a mysterious black hole, it may be worth keeping a spending diary for a couple of months, just to see if you can identify where it is going?

Good luck

CapricornLass · 28 March 2018 at 7:53PM

Just thought - are you really spending over £1700 a year on insuring two cars?

Wizzbang · 28 March 2018 at 9:09PM

It's easy to see where you can cut back-

£175 on 'entertainment' - that whole lot can go immediately. Visit parks, libraries, museums etc for free.

You're spending WAY too much on mobile phones. How many is this spend for? First up, children don't need a mobile phone, so if you're are spending on them - they have to go. Second of all, you shouldn't be paying more than £10 a month per mobile phone (even Martin says this), so switch to GiffGaff and get a max £10 a month plan per mobile. You'll get free calls between each other and free texts too.

£88 a month on internet is also WAY too high. You should be able to knock £50 a month off this. Try Plusnet, or one of the deals mentioned in Martin's weekly email.

Why do you need oil, gas and electricity? Surely it's either oil or gas? I'd look to get rid of one of those. And how can you not be paying anything for water? Do you have your own well?

As mentioned above, why is your car insurance so high? If I had that much debt, I'd get rid of one of the cars and sell the car. That should knock a significant sum off your debts.

Get rid of the TV and stop paying the licence fee. Watch for free, as per Martin's advice in last week's email.

Cut down on your fuel spend, get a bike. Car share. Walk.

Groceries could be further cut by switching to value brands, couponing and ditching non-essentials like crisps and chocolate. Also, start cooking from scratch if you are not already. No ready meals, no takeaways. I reckon you could shave another £30-£50 a month off your spend this way.

Presents are not a necessity. Set a £5 limit if you must give and only for your children, no-one else.

Who's the clothing budget for? Ditch all spending for adults, except for essentials like pants and socks. Limit what you spend elsewhere- use Freecycle groups, swap with friends or family and use charity shops. Primark may be cheap, but makes no sense for quality items you need to last. Also, buying clothing when you don't need to buy clothing is a no-no. Consider a clothes buying ban.

Most of all, you need someone to help you gain insight into how you spent £35K without realising it. And why you still can't account for that £500 per month. You're effectively flushing it away, as you don't know where it's going. Getting a handle on that is key to getting solvent again.

Read Martin's Guide to boosting your income and you'll be able to add at least £2-£3K per year to your household. Are you claiming all the benefits you're entitled to?

Embarrassed & a little scared

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