SOA poor family finances

Jamesp31_2 · 10 December 2019 at 10:00PM

Not sure if I have done this in the right place or even correctly, but I need some help/advice with our family finances. Looking at the below we should have plenty of disposable income each month, but we dont, we are literally living month to month. Im right up to my overdraft limit by the time I get paid. It should all be there below if anyone can see anyway that we can free up some cash each month just to be able to live comfortably. We dont drink/smoke rarely go out. I would love to be able to save £50-100 per month into a savings account as a 'rainy day' fund but cant afford it

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1895
Partners monthly income after tax....... 197
Benefits................................ 147
Other income............................ 0
Total monthly income.................... 2239

Monthly Expense Details
Mortgage................................ 752
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 168
Electricity............................. 40
Gas..................................... 38
Oil..................................... 0
Water rates............................. 57.16
Telephone (land line)................... 32
Mobile phone............................ 28.74
TV Licence.............................. 13.2
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 15
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 100
Other child related expenses............ 15
Medical (prescriptions, dentist etc).... 4
Pet insurance/vet bills................. 0
Buildings insurance..................... 19.32
Contents insurance...................... 0
Life assurance ......................... 63.96
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 10
childrens savings....................... 20
Total monthly expenses.................. 1736.38

Assets
Cash.................................... 0
House value (Gross)..................... 225000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 225000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 158000...(752)......2.34
Total secured & HP debts...... 158000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest credit card............1070......50........17.44
HSBC credit card...............3032......100.......0
HSBC overdraft.................750.......0.........17.9
Co-op bank overdraft...........186.......0.........17.9
Family loan....................15000.....200.......0
Total unsecured debts..........20038.....350.......-

Monthly Budget Summary
Total monthly income.................... 2,239
Expenses (including HP & secured debts). 1,736.38
Available for debt repayments........... 502.62
Monthly UNsecured debt repayments....... 350
Amount left after debt repayments....... 152.62

Personal Balance Sheet Summary
Total assets (things you own)........... 225,000
Total HP & Secured debt................. -158,000
Total Unsecured debt.................... -20,038
Net Assets.............................. 46,962

Robin9 · 10 December 2019 at 10:08PM

Keep a cash diary for a month - record every £1 spent - every coffee, sandwich, present for the kids to see where the money is being frittered away.

On your pay day put that £100 into a savings account - then you can't spend it.

monetxchange · 10 December 2019 at 10:16PM

First off, what you need to do is sit down with a years bank statements and complete an accurate SOA. That’ll show where your money is going. This one can’t be accurate as it shows a surplus which you don’t have and shows you putting aside savings, which then aren’t showing. Then we can advise on where you can cut back. In reality, I’d bet the money is going on extra groceries, clothing and entertainment (nothing wild, just taking the kids for a soft play etc). They all add up and at the moment you’re saying they don’t exist.

There’s nothing hugely OTT expensive on there, but would like to see the full picture. First things that jump out to me are increasing earning potential for both you and your partner, checking your water rates as they seem high, cutting back on satellite TV if you really want to scrimp. Plus stopping the kids savings until you’re debt free. They’re better off with financially stable parents now than a savings pot when they’re 18.

Jamesp31_2 · 10 December 2019 at 10:21PM

Robin9 wrote: »

Keep a cash diary for a month - record every £1 spent - every coffee, sandwich, present for the kids to see where the money is being frittered away.

On your pay day put that £100 into a savings account - then you can't spend it.

You are right, I'm sure if I studied every single line of the bank statements for myself and my partner (we have separate accounts), I'm sure some money is being frittered away, however we really don't lead an extravagant lifestyle, and what I would really like is to have more disposable income. My wage is a decent one, yet this week we have about a tenner to spend on food until Monday when the child benefit gets paid. Its really depressing me living like this. I should also point out I am very fortunate to drive a company car which costs me nothing at all to run (apart from the hideous amount of tax I pay) and the company I work for pays my expenses. If I didn't have that I don't know how we would cope

JayRitchie · 10 December 2019 at 10:27PM

Hi

You look to have done a really thorough budget. Just a few queries:

- how do you have car parking costs with no other car related bills?
- no 'other travel'? No bus fares etc?
- how old are you children? Is your partner likely to earn more in the future?
- some of the items such as clothing look very low. Is this sustainable over the long term?

Jamesp31_2 · 10 December 2019 at 10:27PM

monetxchange wrote: »

First off, what you need to do is sit down with a years bank statements and complete an accurate SOA. That’ll show where your money is going. This one can’t be accurate as it shows a surplus which you don’t have and shows you putting aside savings, which then aren’t showing. Then we can advise on where you can cut back. In reality, I’d bet the money is going on extra groceries, clothing and entertainment (nothing wild, just taking the kids for a soft play etc). They all add up and at the moment you’re saying they don’t exist. Yep again you are right. I am probably looking at my situation with rose tinted glasses.I thought it was accurate. This is what I don't understand, on paper we should have at least £150 spare each month, but we don't.
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There’s nothing hugely OTT expensive on there, but would like to see the full picture. First things that jump out to me are increasing earning potential for both you and your partner, checking your water rates as they seem high, cutting back on satellite TV if you really want to scrimp. Plus stopping the kids savings until you’re debt free. They’re better off with financially stable parents now than a savings pot when they’re 18.

Thanks for the advise, I will go back to the drawing board......

Jamesp31_2 · 10 December 2019 at 10:31PM

JayRitchie wrote: »

Hi

You look to have done a really thorough budget. Just a few queries:

- how do you have car parking costs with no other car related bills? I drive a company car with no costs to myself apart from parking fees
- no 'other travel'? No bus fares etc? don't use
- how old are you children? Is your partner likely to earn more in the future? 6 and 2. The youngest is at preschool twice a week so my partner looks after him when hes not there
- some of the items such as clothing look very low. Is this sustainable over the long term? We don't buy clothes for ourselves hardly ever, its always kids clothes. TBH its probably more than that

clairebeth · 10 December 2019 at 10:57PM

Hi, your expenses are remarkably similar to mine (we have exactly the same size mortgage too!) And my children are aged 3 and 7.

To me, the difference here is your wife's earnings. Although childcare is expensive, it can sometimes be worthwhile to pay a little extra for it in order to gain more employment.

We pay £500 a month (tax free, so it really only costs about £360 out of pocket) in childcare. Buy it allows me to bring home about 1300 a month by working 23 to 34 hours a week. Often I will work nights or weekends, so he's not often in a full day. He will get the 1100hrs a year free as of January, so it's not forever either.

Is it possible for your wife to increase her earnings and for your two year old to spend a little more time at nursery?

suki1964 · 10 December 2019 at 11:22PM

Well done for coming up with a SOA and for deciding to take control of your finances

The spending diary is a must

It is all so easy to have a tenner in the pocket or purse and it disappear into thin air - a cuppa, a mars bar, something for the kids, it goes without being recorded anywhere

A spending diary needs to show every penny spent, even the loose change thrown into charity boxes. Both you and your wife need to get on board with this

The other thing, as all ready mentioned is increasing earnings. is there any way your wife could find some hours somewhere? Where I work we have a single mum who comes and does 16 hours a week around child care and school. We also have another mother who comes in at 5 am to 8am every morning. Her husband gets the kids up and ready to leave, she gets home for the school run

theoretica · 11 December 2019 at 12:04AM

I agree with others - the problem is money being spent which is not on that budget. I suspect it is just a little here and just a little there and they all add up surprisingly fast.

Is entertainment really zero? I suspect you need something budgeted here rather than aiming for zero.

enthusiasticsaver · 11 December 2019 at 9:43AM

I think you need a spending diary too as there are obviously gaps in your soa. There is nothing for presents so that is unrealistic with 2 children and with Christmas coming up I would hazard that is where some of your money is going at the moment. I doubt you spend absolutely 0 on entertainment too and maybe more than £300 on groceries. Have you taken those figures just as an aspiration or have you actually worked out from bank statements where you are spending?

I agree in the long term it would be better for your wife to get some additional paid work even if you pay more in childcare. Look at the tax free childcare scheme and you get up to 30 free hours for 3 year olds (term time and 22 all year round) if you both work more than 16 hours.

SOA poor family finances

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