Debt Spiraling - Need Help Fast.

Fingersoffish
Fingersoffish Posts: 28 Forumite
First Post First Anniversary
in Debt-free wannabe
Hi,

I've been an MSE follower for years. And.. I have to admit used to be excellent at managing my finances and never thought i'd be here. But through a mixture of bad decisions, work changes, complacency and ignorance I've ended up in a vicious debt spiral.

I've tried for months to sort things alone, to take the weight off my family, but to no avail I fall back into the same old traps and the cycle continues. Now the debt is making me Ill and changes need to be made.

I understand my situation may seem mild compared to some. In total I have around £3000 of debt + a 0% loan from my parents for £5100 (and no I can't just not pay this - They aren't well off!).

Please see my SOE below and HELP if you can! :money:

I have rounded everything up to the nearest £5 to be as accurate as possible.

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.................... 1

Monthly Income Details
Monthly income after tax................ 1404.33
Partners monthly income after tax....... 365.63
Benefits................................ 89.7
Other income............................ 0
Total monthly income.................... 1859.66

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 525
Management charge (leasehold property).. 0
Council tax............................. 105
Electricity............................. 40
Gas..................................... 45
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 0
Mobile phone............................ 38
TV Licence.............................. 12.13
Satellite/Cable TV...................... 0
Internet Services....................... 21.5
Groceries etc. ......................... 250
Clothing................................ 60
Petrol/diesel........................... 295
Road tax................................ 0
Car Insurance........................... 102.91
Car maintenance (including MOT)......... 36.5
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 25
Medical (prescriptions, dentist etc).... 8.7
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 6.3
Other insurance......................... 0
Presents (birthday, christmas etc)...... 60
Haircuts................................ 7.33
Entertainment........................... 85
Holiday................................. 0
Emergency fund.......................... 0
Food@Work`.............................. 65
Child Maintenance ...................... 57
Total monthly expenses.................. 1900.37


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 5000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
0% 36 Month Card...............1500......41.36.....0
Planned Overdraft..............1400......0.........10
FAMILY LOAN FOR CAR............5100......200.......0
Total unsecured debts..........8000......241.36....-


Monthly Budget Summary
Total monthly income.................... 1,859.66
Expenses (including HP & secured debts). 1,900.37
Available for debt repayments........... -40.71
Monthly UNsecured debt repayments....... 241.36
Amount short for making debt repayments. -282.07

Personal Balance Sheet Summary
Total assets (things you own)........... 5,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -8,000
Net Assets.............................. -3,000
«13

Comments

  • Fosterdog
    Fosterdog Posts: 4,948 Forumite
    First Anniversary Name Dropper First Post
    Fingersoffish wrote: »
    Hi,

    I've been an MSE follower for years. And.. I have to admit used to be excellent at managing my finances and never thought i'd be here. But through a mixture of bad decisions, work changes, complacency and ignorance I've ended up in a vicious debt spiral.

    I've tried for months to sort things alone, to take the weight off my family, but to no avail I fall back into the same old traps and the cycle continues. Now the debt is making me Ill and changes need to be made.

    I understand my situation may seem mild compared to some. In total I have around £3000 of debt + a 0% loan from my parents for £5100 (and no I can't just not pay this - They aren't well off!).

    Please see my SOE below and HELP if you can! :money:

    I have rounded everything up to the nearest £5 to be as accurate as possible.

    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.................... 1

    Monthly Income Details
    Monthly income after tax................ 1404.33
    Partners monthly income after tax....... 365.63 Why so low?
    Benefits................................ 89.7
    Other income............................ 0
    Total monthly income.................... 1859.66

    Monthly Expense Details
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 525
    Management charge (leasehold property).. 0
    Council tax............................. 105 is this over 10 or 12 months?
    Electricity............................. 40
    Gas..................................... 45quite high when combined with electric, shop around for a better tariff and be more economical with usage
    Oil..................................... 0
    Water rates............................. 45this is very high, if not on a metre get one, if on a metre look into reducing usage a lot.
    Telephone (land line)................... 0
    Mobile phone............................ 38 look for a sim only deal
    TV Licence.............................. 12.13
    Satellite/Cable TV...................... 0
    Internet Services....................... 21.5
    Groceries etc. ......................... 250 could shave a bit off here
    Clothing................................ 60 you don't need this, wear what you have and put anything you no longer need on eBay
    Petrol/diesel........................... 295
    Road tax................................ 0
    Car Insurance........................... 102.91 this is incredibly high, has there been a recent claim?
    Car maintenance (including MOT)......... 36.5 where are you saving this as you show no cash assets?
    Car parking............................. 0 never?
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 25 what are they and are they needed?
    Medical (prescriptions, dentist etc).... 8.7
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 10
    Life assurance ......................... 6.3
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 60 this is pretty high
    Haircuts................................ 7.33
    Entertainment........................... 85 is this needed? Especially as the weather improves there are lots of free and cheap things to do
    Holiday................................. 0
    Emergency fund.......................... 0 you need something here
    Food@Work`.............................. 65 this has to go, on top of your grocery spend it's over £300. Take lunch with you
    Child Maintenance ...................... 57 I assume there is a second child for this?
    Total monthly expenses.................. 1900.37


    Assets
    Cash.................................... 0 should be something here if you are putting car maintenance money aside.
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 5000 how long ago was it bought it it is worth less than you paid?
    Other assets............................ 0
    Total Assets............................ 5000

    No Secured nor Hire Purchase Debts

    Unsecured Debts
    Description....................Debt......Monthly...APR
    0% 36 Month Card...............1500......41.36.....0
    Planned Overdraft..............1400......0.........10 you need to start paying this off to get out of it and stop spending on interest.
    FAMILY LOAN FOR CAR............5100......200.......0
    Total unsecured debts..........8000......241.36....-


    Monthly Budget Summary
    Total monthly income.................... 1,859.66
    Expenses (including HP & secured debts). 1,900.37
    Available for debt repayments........... -40.71
    Monthly UNsecured debt repayments....... 241.36
    Amount short for making debt repayments. -282.07

    Personal Balance Sheet Summary
    Total assets (things you own)........... 5,000
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -8,000
    Net Assets.............................. -3,000

    My comments above in red, even with cutting back you can make up some of the short fall but it will be very tight if at all possible. The only other option is to up your income, why is your partners income so low?
  • Soundgirlrocks
    Soundgirlrocks Posts: 744 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    Fingersoffish wrote: »
    Hi,

    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.................... 1

    Monthly Income Details
    Monthly income after tax................ 1404.33
    Partners monthly income after tax....... 365.63 Any way this can be increase?
    Benefits................................ 89.7
    Other income............................ 0
    Total monthly income.................... 1859.66

    Monthly Expense Details
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 525
    Management charge (leasehold property).. 0
    Council tax............................. 105 Over 12 months?
    Electricity............................. 40
    Gas..................................... 45
    Oil..................................... 0
    Water rates............................. 45
    Telephone (land line)................... 0
    Mobile phone............................ 38 This is high
    TV Licence.............................. 12.13
    Satellite/Cable TV...................... 0
    Internet Services....................... 21.5
    Groceries etc. ......................... 250
    Clothing................................ 60 Could this be reduced?
    Petrol/diesel........................... 295
    Road tax................................ 0 Nothing?
    Car Insurance........................... 102.91
    Car maintenance (including MOT)......... 36.5
    Car parking............................. 0 Car seems to be heavily used is 0 correct?
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 25
    Medical (prescriptions, dentist etc).... 8.7
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 10
    Life assurance ......................... 6.3
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 60 This is too much you can't afford it
    Haircuts................................ 7.33
    Entertainment........................... 85 Again this can be reduced
    Holiday................................. 0
    Emergency fund.......................... 0 Need something here
    Food@Work`.............................. 65 take food to work
    Child Maintenance ...................... 57
    Total monthly expenses.................. 1900.37


    Assets
    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 5000
    Other assets............................ 0
    Total Assets............................ 5000

    No Secured nor Hire Purchase Debts

    Unsecured Debts
    Description....................Debt......Monthly...APR
    0% 36 Month Card...............1500......41.36.....0
    Planned Overdraft..............1400......0.........10
    FAMILY LOAN FOR CAR............5100......200.......0
    Total unsecured debts..........8000......241.36....-


    Monthly Budget Summary
    Total monthly income.................... 1,859.66
    Expenses (including HP & secured debts). 1,900.37
    Available for debt repayments........... -40.71
    Monthly UNsecured debt repayments....... 241.36
    Amount short for making debt repayments. -282.07

    Personal Balance Sheet Summary
    Total assets (things you own)........... 5,000
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -8,000
    Net Assets.............................. -3,000

    I'm sure others will be along to help but my thoughts above

    The car seems to be crippling you, when you combine the loan, insurance, maintenance & petrol its £632.91 nearly half of your take home pay and more than your rent.
  • JayRitchie
    JayRitchie Posts: 526 Forumite
    First Anniversary First Post Name Dropper
    Hi

    Couple of questions:

    - Why is your partners income so low? How old is the child? Is that the child being paid for under child maintenance?

    - The petrol and insurance costs look large? Do you have a long commute? Or a particularly expensive to run car? Car maintenance looks low for a £5000 car if required for work.
  • Fingersoffish
    Fingersoffish Posts: 28 Forumite
    First Post First Anniversary
    edited 16 May 2018 at 8:29PM
    Fosterdog wrote: »
    My comments above in red, even with cutting back you can make up some of the short fall but it will be very tight if at all possible. The only other option is to up your income, why is your partners income so low?

    Hi, my partners income is low as my second child is only 2.

    We get the 16 hours free childcare but this only covers 3 half days. I work 8-6 daily in the week. She works in a chip shop but this gives her only a couple of hours a week at minimum wage + a little bit of tax credits.

    For clothes, we have wardrobes full of stuff we never wear. Not sure if it would sell! We aren't a designer family but have a few nice clothes. I personally haven't bought any new clothes for myself for 3 years... Spend comes from kids clothes mainly.

    Gas/electric. I have always payed more in previous properties. The issue here is we have no room thermostat only TRVs and a timer for the boiler, heating is hard to control. Not sure how to combat that in rented accommodation I couldn't justify fitting one.

    Phones are both contract with a year + to go. That figure does include mine and my wife's phone plus all usage.

    Car is heavily used as my son lives 115 miles away, I have him 36 weekends a year and pick up and drop off so this is 460miles x 36 hence the high usage (on top of my work/personal daily mileage).

    My biggest thing is food/drink. I get very thirsty and always end up buying pop whenever I pass a shop. Also we are an outdoorsy/out he house family and we never do a pack up - mainly just wouldn't know what do etc. Also temptation of expensive take away food.

    In fact I wish I could just get away from spending on that kind of thing. But even when I try leaving my cards at home I have mobile contactless payments etc and will end up spending! I don't like to take no money at all in car of emergencys so usually have a debit card to hand.
  • Fingersoffish
    Fingersoffish Posts: 28 Forumite
    First Post First Anniversary
    JayRitchie wrote: »
    Hi

    Couple of questions:

    - Why is your partners income so low? How old is the child? Is that the child being paid for under child maintenance?

    - The petrol and insurance costs look large? Do you have a long commute? Or a particularly expensive to run car? Car maintenance looks low for a £5000 car if required for work.

    See above reply regarding partners income.

    I have a second child who lives away, hence the high mileage for pick-up and collection most weekends to see him. Plus the Child maintenance is for him.

    Car is very cheap to run (60mpg + and no tax) but my mileage is extremely high. Car maintenance calculations only takes into account twice yearly servicing and MOT... i know there are other costs! argghh!
  • Fingersoffish
    Fingersoffish Posts: 28 Forumite
    First Post First Anniversary
    Soundgirlrocks wrote: »
    I'm sure others will be along to help but my thoughts above

    The car seems to be crippling you, when you combine the loan, insurance, maintenance & petrol its £632.91 nearly half of your take home pay and more than your rent.


    Thanks for your comments! I will certainly look into a lot of your points.

    See above for comments about my partners lack of work. I really dont know how with childcare she can fit in extra hours until my daughter is school age. We don't have any family to rely on for childcare!

    I know the car costs us a fortune! But it's the mileage and usage that adds up. Seeing my son 36+ weekends a year + additional in school holidays at 230 a round trip (460 for one visit when you consider i bring him home, then drop him back up). Honestly don't know how to touch those costs.

    I'm 24 hence my high insurance costs!
  • JayRitchie
    JayRitchie Posts: 526 Forumite
    First Anniversary First Post Name Dropper
    Fingersoffish wrote: »
    I know the car costs us a fortune! But it's the mileage and usage that adds up. Seeing my son 36+ weekends a year + additional in school holidays at 230 a round trip (460 for one visit when you consider i bring him home, then drop him back up). Honestly don't know how to touch those costs.

    I'm 24 hence my high insurance costs!
    Hey, will write more later but just wanted to say its great to read of a young guy going to so much effort for their children. I see so many stories where the mum suffers from a lack of care.

    What job do you do? You are only young - any chance of progression/ payrises?
  • Fingersoffish
    Fingersoffish Posts: 28 Forumite
    First Post First Anniversary
    I do what I can although it's difficult with such a massive financial commitment. It's why I really need to cut corners elsewhere and shave every penny I can.

    I suppose one of my biggest issues (and particularly my wife's point of view) is they my daughter (who lives with me) doesn't miss out because of the amount I spend visiting/csa for my son. That makes it very hard to avoid unnecessary spending.

    As for a job. I'm a product manager for a medical company. I do have good progression prospects over the next 3 years. Or so I am told, the possibility of increasing my salary up to £40,000 + p/a which would solve my problems. But that's a possibility not a given and certainly not something I can rely upon.
  • tlc678910
    tlc678910 Posts: 982 Forumite
    First Anniversary Combo Breaker First Post
    Hi,
    I believe 30 hours of free childcare is available when your child turns 3 (for working parents who work over 16 hours I think). I think you can use them with more than one provider e.g. childminders and nurseries that are signed up to the scheme not just preschools. You could for example have a couple of days of preschool with wraparound care from a childminder, or preschool every day so it might not be as long as you think before your wife could work more hours. Worth looking into and your wife could give her boss the heads up that she will be wanting more shifts if possible soon.
    Tlc
  • tealady
    tealady Posts: 3,742 Forumite
    Name Dropper First Post First Anniversary Mortgage-free Glee!
    Hi
    If you get thirsty then sugary pop will not help. Buy yourself a refillable bottle and fill up with tap water each time you leave the house.
    Re your son. Could you agree with your ex a mutual hand over point somewhere half way? Or woukd public transport be cheaper. Also check before you leave the house where the cheapest petrol station is and fill up there.
    Also take packed lunches to work, there are loads of ideas on the forums
    Find out who you are and do that on purpose (thanks to Owain Wyn Jones quoting Dolly Parton)
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