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  • FIRST POST
    • medicalmumof4
    • By medicalmumof4 12th May 18, 11:39 PM
    • 3Posts
    • 0Thanks
    medicalmumof4
    Looking for advice/help re. large debt
    • #1
    • 12th May 18, 11:39 PM
    Looking for advice/help re. large debt 12th May 18 at 11:39 PM
    Hiya,

    My Husband and I are desperate to get more control of our finances after some very challenging years which have left us in a less than desirable position.

    Here’s my SOA:

    Statement of Affairs and Personal Balance Sheet

    Household Information
    Number of adults in household........... 2
    Number of children in household......... 4
    Number of cars owned.................... 2

    Monthly Income Details[
    Monthly income after tax................ 900-1200
    Partners monthly income after tax....... 1700
    Benefits................................ 372
    Other income............................ 0
    Total monthly income.................... 2972 - 3272

    Monthly Expense Details
    Mortgage.................................... 383
    Council tax............................. 138
    Electricity............................. 111
    Gas..................................... 0
    Water rates............................. 39
    Telephone (land line)................... 29
    Mobile phone............................ 24
    TV Licence.............................. 13
    Satellite/Cable TV...................... 0
    Internet Services....................... 0
    Groceries etc. ......................... 464
    Clothing................................100
    Petrol/diesel........................... 300
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other child related expenses............500
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Contents insurance...................... 0
    Life Insurance…………………….12.50
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 25
    Entertainment........................... 0
    Holiday................................. 0
    Overdraft repayment……..100
    Emergency fund.......................... 300
    Gym..................................... 30

    Total monthly expenses…….2568.5...........

    Assets
    Cash.................................... 0
    Car(s).................................. 15000
    Total Assets............................ 15000

    No Secured nor Hire Purchase Debts

    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Tesco…………….……..1155………25…… 0
    Clydesdale……………..6927………69…… 0
    Sainsburys…………….6046………139……0
    Barclay Card…………..2916………65……..0
    M&S…………………….4119………105……0

    Total unsecured debts.....21163.........

    Monthly Budget Summary
    Total monthly income………………..2972-3272
    Expenses (including HP & secured debts) 2568.5
    Available for debt repayments………..503.5-703.5
    Monthly UNsecured debt repayments.......403
    Amount left after debt repayments....... 100.5-300.5

    Personal Balance Sheet Summary
    Total assets (things you own)........... 15000
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -21163
    Net Assets.............................. -6163

    For further explanation:

    My wage varies but that is my best guess

    The emergency fund is essentially savings to cover the one off annual things - car tax/insurance/mot&service/house insurance which is why they are not in the main SOA either

    The gym is an absolute necessity at the moment but will hopefully be able to be stopped after another 3-6 months


    We can meet our minimum repayments but its such slow progress and we won't clear them at this rate before their interest free periods run out.

    Would be grateful of any advice/input as to how we can optimise this situation. Thanks everyone!
Page 1
    • JayRitchie
    • By JayRitchie 13th May 18, 12:38 AM
    • 24 Posts
    • 20 Thanks
    JayRitchie
    • #2
    • 13th May 18, 12:38 AM
    • #2
    • 13th May 18, 12:38 AM
    A few questions:

    - you have an overdraft repayment - how much is the overdraft?
    - how much is your mortage balance and how much is the house worth?
    - how old are your children? What are the £500 child related costs spent on?
    - when do the interest free periods run out?
    • enjoyyourshoes
    • By enjoyyourshoes 13th May 18, 9:25 AM
    • 1,062 Posts
    • 1,306 Thanks
    enjoyyourshoes
    • #3
    • 13th May 18, 9:25 AM
    • #3
    • 13th May 18, 9:25 AM
    The reality is that if you are serious in removing your debt you will have to make significant sacrifices on your previous life.

    This inevitably will mean difficult decisions.

    The Gym is such a decision, as along the other great suggestions that will come along in due course from this forum.

    Work out Needs and wants and only spend on needs.
    Debt is a symptom, solve the problem.
    • Novice investor101
    • By Novice investor101 13th May 18, 10:15 AM
    • 145 Posts
    • 77 Thanks
    Novice investor101
    • #4
    • 13th May 18, 10:15 AM
    • #4
    • 13th May 18, 10:15 AM
    You need to factor in the annual bills like car insurance & home insurance as separate expenses. These are not what an emergency fund is for & if you did have an emergency, like a new boiler needed, you may have to use credit to pay for it.
    Also include your house value & mortgages in your SOA.
    • mumofthetwins
    • By mumofthetwins 13th May 18, 10:45 AM
    • 1,042 Posts
    • 4,025 Thanks
    mumofthetwins
    • #5
    • 13th May 18, 10:45 AM
    • #5
    • 13th May 18, 10:45 AM
    Hi
    The ones that stick out to me are
    Groceries .. defo get this down try Lidl or Aldi and down shift brands.
    Clothes £100/month is to much
    Child Expenses .. you need to get this as close to £0 as possible ... at least until the debt is paid.

    Have you looked at cash envelopes and doing a "real" written budget giving every £ a purpose ...

    Try looking for Dave Ramsey on you tube .. I only really started knuckling down last month and so far have paid off nearly £4000 ... as said above it's about needs not wants and you wanting to get out of debt has to be the most important want.

    Lisa x
    DFW
    July £0/£17100
    June £2400/£19500 Murphy £500/£500
    May £3085/£23042
    April £1266/£25843 STF £1500/£1500
    MFW OP 2018 £600/£1600
    • z1a
    • By z1a 13th May 18, 11:21 AM
    • 1,389 Posts
    • 1,333 Thanks
    z1a
    • #6
    • 13th May 18, 11:21 AM
    • #6
    • 13th May 18, 11:21 AM
    "The gym is an absolute necessity at the moment but will hopefully be able to be stopped after another 3-6 months"

    Rubbish.
    • theoretica
    • By theoretica 13th May 18, 11:46 AM
    • 5,260 Posts
    • 6,525 Thanks
    theoretica
    • #7
    • 13th May 18, 11:46 AM
    • #7
    • 13th May 18, 11:46 AM
    What can you do to make your wage the higher figure every month?
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • sourcrates
    • By sourcrates 13th May 18, 12:45 PM
    • 14,621 Posts
    • 13,750 Thanks
    sourcrates
    • #8
    • 13th May 18, 12:45 PM
    • #8
    • 13th May 18, 12:45 PM
    Well, the OP has 4 kids, and I know how much 3 can eat in a typical week.

    £464 is a tad high, and can be reduced a bit, but a lot of the cheaper foods just don't taste nice at all, and are full of rubbish, I would rather be in debt, and still enjoy my food to be honest.

    Also the OP may of recently had a child (just an assumption) and may want to regain her figure, hence the Gym, or there may be some other medical reason, do not judge people so easily Z1a !!

    Be nice or think twice in future.
    Last edited by sourcrates; 13-05-2018 at 12:51 PM.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
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    • mumofthetwins
    • By mumofthetwins 13th May 18, 1:19 PM
    • 1,042 Posts
    • 4,025 Thanks
    mumofthetwins
    • #9
    • 13th May 18, 1:19 PM
    • #9
    • 13th May 18, 1:19 PM
    Just thinking ... on the gym front one thing I found saved me a fortune on gym costs was when I had my boys I could t get to the gym so started doing Jillian michaels workouts at home they are a killer but can fit around home commitments and also only cost around £15 per dvd .. it's also some of the best results I have seen .. I honestly had a six pack and was mega toned so could be worth a check out ?
    Lisa x
    DFW
    July £0/£17100
    June £2400/£19500 Murphy £500/£500
    May £3085/£23042
    April £1266/£25843 STF £1500/£1500
    MFW OP 2018 £600/£1600
    • Money maker
    • By Money maker 13th May 18, 1:38 PM
    • 5,043 Posts
    • 11,458 Thanks
    Money maker
    I think the gym should stay. £30 a month is a small price for entertainment/evening out/care of your health. I would just drop the clothing budget to a sensible level by shopping in more economically priced shops/charity shops etc. Cheaper food isn't necessarily less healthy or less tasty. Oddly, I feel I had a much better diet when money was tight and we certainly ate a lot less which ties in well with the gym/weight loss thing.
    Please do not quote spam as this enables it to 'live on' once the spam post is removed.

    If you quote me, don't forget the capital 'M'

    Declutterers of the world - unite!
    • JayRitchie
    • By JayRitchie 13th May 18, 2:29 PM
    • 24 Posts
    • 20 Thanks
    JayRitchie
    My thoughts are the the gym is only £30 a month and gives a way to feel that you've got out of the house to do something. Admittedly this is less important in summer than winter. I'd prioritise saving in other areas.
    • medicalmumof4
    • By medicalmumof4 13th May 18, 8:45 PM
    • 3 Posts
    • 0 Thanks
    medicalmumof4
    Thanks for the replies everyone. Will try to answer the questions...

    - Overdraft is an old student one. Balance is -£756. It is currently interest free but reduces periodically so we are trying to clear it before each new interest free limit.

    - Mortgage balance is £74,000, House is worth approx £150,000

    - Children are between 20months and 8yrs

    - Child costs include: all their activities, sports clubs, after school clubs, school lunches, my eldest is having tutoring as they had been struggling at school, friends birthday presents, school trips, equipment for sports activities and probably a few other things that have slipped the net. We are aware that if we absolutely had too this is an area we could cut back on. But it would be an absolute last resort. They are great kids and are doing so well in their various sports, we would really feel we had let them down if we had to stop them doing the activities they love.

    - Interest free periods run out as follows:
    Nov 18; 2 cards, one = 1155, other = 6927
    Mar 19; 1 card = 6046
    Aug 19; 1 card = 2916
    Sept 19; 1 card = 4119

    - re. emergency fund, I'm aware that's not what constitutes an emergency fund, I just didn't change the name. It's just a separate account we transfer £300 a month into to make sure we can cover the annual expenses when they come around. We have no 'true' emergency fund - so, as you say, emergencies go onto credit cards.

    - Groceries: this works out at £107/week which I thought was pretty reasonable for a family of 6 including all household stuff. We have used aldi/lidl in the past but are currently using Morrisons online for a couple of reasons. As we only have a small fridge we have to do 2 shops a week and we were really struggling to find the time to do. Plus we found it easier to keep to a budget when you can see fiddle with the online basket total. We don't use any particular brands - shop based on offers mainly.

    - Clothing; I agree it sounds high, trying to be as realistic as possible as we both work in professional jobs that require a certain level of dress code and it includes all 4 children shoe, clothes and school uniforms.

    - Gym; this really is a necessity. My OH had a very significant accident last year (part of the reason we're in this scenario) and its for rehabilitation. They do technically have access to NHS facilities but with the costs of getting there, parking and the limited time slots, it makes more sense all round to use our local council one. As I say, we're hoping this will stop within the next 6 months as their recovery progresses.

    - My wage; In reality, I can't do an awful lot. I'm taking all the extra shifts going I can but I am fairly constrained. I am at the lowest point, salary wise, for my career. But as I am working PT, the increases are slow.

    Sorry for the mammoth post. Hope this clears a few bits up. Please let me know if there is anything else. And very grateful of all the advice.
    • JayRitchie
    • By JayRitchie 13th May 18, 9:18 PM
    • 24 Posts
    • 20 Thanks
    JayRitchie
    Thanks for answering. In truth your financial position is way better than lots of people - newish car, low mortgage, good % equity. Seems you've done really well, and managing two jobs with four young kids. At present you have just over £21k debt and pay just under £5k a year - this would clear in 4 years except that the interest rates are about to hit and will kill you.

    Against all normal advice I think you need to think about some form of loan or remortgage. I don't think you have a budget with enough slack to really hit the balance for 18 months and get to a decent position. To some extent this depends on how high the card interest rates will be and whether you could get another interest free deal. I hate this advice - you are literally mortgaging tomorrow but you would be better having some savings for emergencies and car replacement/
    • Mumoffourkids
    • By Mumoffourkids 13th May 18, 9:33 PM
    • 626 Posts
    • 3,223 Thanks
    Mumoffourkids
    Just thinking about the kids costs of £500 per month, I have six kids, the four oldest all do activities but I certainly don't spend £500 per month on their activities. Mine are 16, 12, 9 and 8. The two youngest are 3 and 20 months and so don't do activities. They go to nursery the three days a week I work and I will occasionally take them to the local soft play across the road from me, but that would only be once a month.

    I think you need to break down the expenses further to see if anything can be saved.

    For example, my four all play rugby, this costs me £7.50 per month for all four of them. Two of the girls do gymnastics at £13 per week and the two middle ones do two after school clubs a week at £10 per club per term so say £4 a week for them. At 8 years old for your eldest, I would also assume that the school trips are not that expensive either. Not like my eldest two who are secondary school and their trips are getting very expensive.

    I know you don't want to cut down this area but you have four kids, they cannot do every club going. I gave my kids the choice as two of the girls were doing swimming and they wanted to do gymnastics. I told them they had to choose as I didn't have a limitless supply of money. It gives them the option to choose what they really want to do.

    Also your SOA shows nothing for presents. I would expect that you should have something in here for presents.
    Total debt Dec 2017 £23090.83
    Jul 2018 £2279.78 90.13% paid
    Emergency fund £218.57/£600
    Total Savings £2006.60
    • Larac
    • By Larac 13th May 18, 9:52 PM
    • 834 Posts
    • 519 Thanks
    Larac
    Well, the OP has 4 kids, and I know how much 3 can eat in a typical week.

    £464 is a tad high, and can be reduced a bit, but a lot of the cheaper foods just don't taste nice at all, and are full of rubbish, I would rather be in debt, and still enjoy my food to be honest.

    Also the OP may of recently had a child (just an assumption) and may want to regain her figure, hence the Gym, or there may be some other medical reason, do not judge people so easily Z1a !!

    Be nice or think twice in future.
    Originally posted by sourcrates
    An observation rather than a criticism - but when these SOA are posted you will always get somebody come along and say they should be able to feed their family for 50% less. I often wonder what the hell they are feeding their family on. What is not clear is what is included in the 'budget' - personally don't think £464 is that high for the size of the family.
    • medicalmumof4
    • By medicalmumof4 13th May 18, 10:32 PM
    • 3 Posts
    • 0 Thanks
    medicalmumof4
    Thanks for answering. In truth your financial position is way better than lots of people - newish car, low mortgage, good % equity. Seems you've done really well, and managing two jobs with four young kids. At present you have just over £21k debt and pay just under £5k a year - this would clear in 4 years except that the interest rates are about to hit and will kill you.

    Against all normal advice I think you need to think about some form of loan or remortgage. I don't think you have a budget with enough slack to really hit the balance for 18 months and get to a decent position. To some extent this depends on how high the card interest rates will be and whether you could get another interest free deal. I hate this advice - you are literally mortgaging tomorrow but you would be better having some savings for emergencies and car replacement/
    Originally posted by JayRitchie
    Thank you - we had been thinking about whether this might be a sensible way forward. I think we need to explore the specifics a bit more in terms of fees/interest rate repercussions but I'm glad we aren't the only ones to have considered i!

    Just thinking about the kids costs of £500 per month, I have six kids, the four oldest all do activities but I certainly don't spend £500 per month on their activities. Mine are 16, 12, 9 and 8. The two youngest are 3 and 20 months and so don't do activities. They go to nursery the three days a week I work and I will occasionally take them to the local soft play across the road from me, but that would only be once a month.

    I think you need to break down the expenses further to see if anything can be saved.

    For example, my four all play rugby, this costs me £7.50 per month for all four of them. Two of the girls do gymnastics at £13 per week and the two middle ones do two after school clubs a week at £10 per club per term so say £4 a week for them. At 8 years old for your eldest, I would also assume that the school trips are not that expensive either. Not like my eldest two who are secondary school and their trips are getting very expensive.

    I know you don't want to cut down this area but you have four kids, they cannot do every club going. I gave my kids the choice as two of the girls were doing swimming and they wanted to do gymnastics. I told them they had to choose as I didn't have a limitless supply of money. It gives them the option to choose what they really want to do.

    Also your SOA shows nothing for presents. I would expect that you should have something in here for presents.
    Originally posted by Mumoffourkids
    Thank you - totally understand what you're saying. To break it down a bit more...

    Tutoring - £100
    Swimming - £117 - 2 eldest swim for a club so have pretty high fees and no. 3 has just started lessons
    Beavers & Cubs - £25
    French/Music in school - £42
    Rookie Lifeguard training - £15
    School Lunches - £25
    Competitive mountain biking - £50
    After school club £20

    Total = £394.

    The remaining £106 should hopefully cover things like: replacing kit/goggles (they spend a LOT of hours in the pool so things do need replacing), school trips, Cubs camp, birthday presents for friends, the odd soft play trip etc. Its a (hopeful) over estimate but I don't want to miss anything out!

    I know it's a fair amount. We really struggle with the balance of improving the debt situation vs. sacrificing things in their childhood. We don't go on holiday, we don't have more than one or two 'days out' a year and we feel bloody awful at the thought of taking these things away from them too.
    • JayRitchie
    • By JayRitchie 14th May 18, 12:35 AM
    • 24 Posts
    • 20 Thanks
    JayRitchie
    An observation rather than a criticism - but when these SOA are posted you will always get somebody come along and say they should be able to feed their family for 50% less. I often wonder what the hell they are feeding their family on. What is not clear is what is included in the 'budget' - personally don't think £464 is that high for the size of the family.
    Originally posted by Larac
    Plus its much harder to manage kids and two people working. You can be tough for 18 months or so but at some point need to pay for convenience.
    • Gemsy81
    • By Gemsy81 14th May 18, 11:40 AM
    • 148 Posts
    • 432 Thanks
    Gemsy81
    No advice that has not been covered, but I just wanted to add - don't feel bad about having to limit what your children have. I think it is great for them to learn lessons about not being able to afford everything. I really wish my parents had taught me more about money when I was younger. I don't feel I learn the true value of it, and I could have saved a lot of heartache and stress if I had just learned to wait for things! It is only now, in my thirties that I am learned to stop, wait and think about if I really need something. I am feeling quite proud of myself having put the breaks on two expensive purchases in the last fortnight - previously, I would have just paid out for them!
    • Mumoffourkids
    • By Mumoffourkids 14th May 18, 12:15 PM
    • 626 Posts
    • 3,223 Thanks
    Mumoffourkids
    Thank you - totally understand what you're saying. To break it down a bit more...

    Tutoring - £100
    Swimming - £117 - 2 eldest swim for a club so have pretty high fees and no. 3 has just started lessons
    Beavers & Cubs - £25
    French/Music in school - £42
    Rookie Lifeguard training - £15
    School Lunches - £25
    Competitive mountain biking - £50
    After school club £20

    Total = £394.

    The remaining £106 should hopefully cover things like: replacing kit/goggles (they spend a LOT of hours in the pool so things do need replacing), school trips, Cubs camp, birthday presents for friends, the odd soft play trip etc. Its a (hopeful) over estimate but I don't want to miss anything out!

    I know it's a fair amount. We really struggle with the balance of improving the debt situation vs. sacrificing things in their childhood. We don't go on holiday, we don't have more than one or two 'days out' a year and we feel bloody awful at the thought of taking these things away from them too.
    Originally posted by medicalmumof4
    Thanks for breaking it down. When you break it down it does seem like your children are doing rather a lot of different activities. If the after school clubs are due to needing childcare then that is fair enough. I can also understand about the swimming as it is a good skill for children to have so I wouldn't stop that activity. However, do your kids really need to do cubs/beavers, french/music at school, mountain biking, and lifeguard training in addition to the swimming. Its just my opinion, so you may want to ignore it, but do your children ever have time to just be children? It seems like they do an awful lot at such a young age. If it was me, I would keep the swimming, the after school club if needed for childcare and maybe one of the school activities, but I would drop the rest as for me personally it seems too much. If your oldest is also needing tutoring as well as you say swimming a lot, then they must be doing an activity every day.

    My two oldest kids do rugby training wednesday evenings and then matches on a sunday. The next two do rugby training saturday morning and then matches again on a sunday, but none of them have matches every sunday. Then two of the girls do acro on a thursday evening and that is it. Oh and by the way, three of the four oldest are girls and they play rugby!
    Total debt Dec 2017 £23090.83
    Jul 2018 £2279.78 90.13% paid
    Emergency fund £218.57/£600
    Total Savings £2006.60
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