Help please (SOA included)

A_Tea_Pot · 24 January 2020 at 5:59PM

Hi everyone,

I would appreciate any help in managing our debts which have spiralled over the last year after we paid all “top up” fees for a relatives care home placement (reality being it was way in excess than we could afford but we were not successful in getting any further funding and didn’t want to put our relative through the stress of moving to a different home therefore utilised all our saving and more).

I have included our SOA and added a couple of explanations. We are due to inherit a small amount of money (we think around 5k) from a distant uncle of my husband soon and we have agreed to use it paying off some of our debts.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3 (1 is here on weekends only)
Number of cars owned.................... 2 (1 owned outright one onHP)

Monthly Income Details
Monthly income after tax................ 2100
Partners monthly income after tax....... 1300
Benefits................................ 137 (child benefit for 2 children)
Other income............................ 0
Total monthly income.................... 3537

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 235 (ends 12/20)
Rent.................................... 900 (below average for area)
Management charge (leasehold property).. 0
Council tax............................. 180
Electricity............................. 65
Gas..................................... 133 (LPG bulk with tank rental. Unable to change supplier or tariff unfortunately as it’s very expensive)
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 80 (includes tv/internet/landline - due for renewal will try haggle for better deal)
Mobile phone............................ 25 (2 x sim only)
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 450 (I think this can be reduced)
Clothing................................ 5 (not monthly but average)
Petrol/diesel........................... 170
Road tax................................ 42
Car Insurance........................... 60
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 10 (wrap around care school fee)
Other child related expenses............ 160 (child maintenance payment)
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 24
Buildings insurance..................... 0
Contents insurance...................... 14
Life assurance ......................... 0 (we need to start a plan)
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 50 (average not monthly)
Holiday................................. 10 (not monthly spend)
Emergency fund.......................... 20
Total monthly expenses.................. 2724

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 2800.....(235)......9.1 (ends 12/20)
Total secured & HP debts...... 2800......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card ...................8900......88........0 (0% ends 8/20)
Credit card ...................5960......75........0 (0% ends 10/21)
Loan...........................6800......255.......3.9 (ends 2/23)
Total unsecured debts..........21660.....418.......-

Monthly Budget Summary
Total monthly income.................... 3,537
Expenses (including HP & secured debts). 2,724
Available for debt repayments........... 813
Monthly UNsecured debt repayments....... 418
Amount left after debt repayments....... 395

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -2,800
Total Unsecured debt.................... -21,660
Net Assets.............................. -22,460

[font]

Thanks

JayRitchie · 24 January 2020 at 7:11PM

Just a query about the cars:

- do you need two? Could you manage with one for a while?
- what will you do when the HP term ends? How much will the car be worth (is it a proper HP deal where you get to keep it)?

Edited to add: did you have debts (other than car loans) before you had to support a relative? Did you have savings prior to this - I think your post indicates that you did.

Also - how old are the children? How long until the child maintenance finishes?

A_Tea_Pot · 24 January 2020 at 8:25PM

Many thanks for taking the time to reply.

To answer your questions. We have a 14 year old (my stepson who visits on weekends), 6 year old and 4 year old. We originally had approximately £4500 in savings, granted not a large sum but it was our buffer zone.

We do need two cars unfortunately, we live in a semi rural area with poor transport and DH work commute takes him out of the house from 7am-6pm Mon to Friday and I work part time.

The HP finance means the car will be ours once final payment is made, we will be keeping the car.

The only debts we had were prior to all this was approximately 1500 on a credit card but this was being paid off over the minimum amount each month and we had the fall back of the savings to cover the money owed.

elsien · 24 January 2020 at 8:32PM

I'm going to ask what I always ask - do you actually have that £395 left at the end of the month?
Are there penalties for paying the loan off early?

SusieT · 24 January 2020 at 8:34PM

Away from the actual spending (no cash shown for emergency fund, holiday etc, so I am guessing its an aspirational one), if you actually have £395 left at the end of the month, and throw it and the inheritance (when it comes) at the Card with the 0% finishing this year, that one should be cleared before interest hits, and you can then use that payment to start on the next one, as the interest is normally quite high when it starts. The loan will be paying itself down, but you will have the choice when the cards are repaid as to finishing it early, or letting it run its course and divert the payments into savings.

JayRitchie · 24 January 2020 at 8:39PM

Ok - so in reality you have a short term problem as you have a fair amount of debt and some card debt which will cease to be zero percent. On the plus side you gain an extra £235 a month at the end of the year and the loan is on a decent rate of interest.

I think its worth reading a load of threads to see what others have done and what their budgets are. At the moment you have about £400 a month to throw at debts on your SOA plus a fairly easy saving of £200 a month from groceries - giving £600 a month.

However, the SOA looks very light on childrens costs (entertainment, days out, clothing etc. Worth considering what is realistic for these. Also see what you could save if you get a new phone deal without TV - that might be very worthwhile.

Although you would have a very tough 8 or nine months doing this the worst would be over and the concern of debts taking over your lives pretty much gone at this point.

I think you need to move as quickly a possible to pay off the larger credit card to avoid the risk of getting stuck with high interest rates, and to also start building a meaningful emergency fund in case of car issues, unexpected expenses etc.

Elisheba · 24 January 2020 at 9:00PM

I'm not sure your car maintenence costs are realistic. £120 a year for 2 cars, to include MOTs as well seems pretty low.

I'm wondering, do you have that £400 at the end of every month? Or do you just think you should? If you can write absolutely everything down as you spend it (I use the note app on my phone) and then go through it with forensic detail at the end of the month to see what you are actually spending, and on what, that will help.

I'm with the others - get rid of the expensive tv/broadband/phone. You can get broadband and landline for less than £20. Pay for Am@zon or N£tflix if you want TV, and use your dish for Freesat.

As you say, you can slash that grocery bill.

Hope that helps!

A_Tea_Pot · 24 January 2020 at 9:02PM

Thank you all again for your help.

In reality we don’t have always have the £300 left at the end of the month, we were into the overdraft just before Christmas but managed to stay out this month. As to where it goes, I think we spend more on food and going out with the children especially when we have all our children on weekends (the extra £5-10 soon adds up).

I really appreciate all your thoughts and advice, sometimes writing it all down and getting an independent perspective works. Your right it is going to be a tough few months but both myself and DH are determined to sort ourselves out.

Our holiday budget is low because we stay in a friends caravan on a Haven site. But I have to admit I would like to go somewhere a little warmer and drier than the UK!

A_Tea_Pot · 24 January 2020 at 9:06PM

Just to add about groceries, yes this can definitely be improved upon, I am going to try Aldi - it is further to drive but I am hoping the saving will be worth it (I am planning to go for a month and compare to my last months food bills).

Broadband providers are limited here (problems with living more rural I guess) but I am going to call current provider tomorrow and see what there best price is and look around for alternatives. We don’t currently have Netflix etc we have tried it in the past but cancelled it.

-taff · 24 January 2020 at 9:57PM

Look at the Old Style board for tips on grocery shopping, batch cooking, meal planning and stretching the pennies if you don't already do so.

Unicorn_cottage · 24 January 2020 at 10:40PM

Can you do all the little things that help initially like changing bank account for an incentive, i.e. HSBC are offering £175. Any bits and bobs to sell? Extra hours at work etc?

If you do any of these - as soon as you get the money pay it into 1 of the debts, i.e. which ever you are prioritising first.

Help please (SOA included)

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free