Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Compulsive
    • By Compulsive 14th Apr 19, 10:19 PM
    • 14Posts
    • 12Thanks
    Compulsive
    SOA - How?
    • #1
    • 14th Apr 19, 10:19 PM
    SOA - How? 14th Apr 19 at 10:19 PM
    Iím new, first post so please be gentle!

    Iíve seen the recommendation to complete an SOA and although I understand it, Iím really not sure how to work out what Iím actually spending? I know exactly all my DD and SO but Iíve not a clue how my general spending is broken up. I just use my card and pretend I have money. Is it just a case of printing a monthly statement and highlighting if all? If so do I write down what Iím actually spending or what I want to be spending?

    My next issue is I want to do the 7 steps thing. Even though it says to save £1000 before anything else how do I do this while in my OD? Do I just start cutting spending and prioritising saving it over the OD?

    Iím really sorry if these are stupid questions. My debt is g massive (2k plus 1k OD) but I should have so much more money left each month than I actually do. I yo-yo in and out of debt up to 10k and havenít been out of my OD since 2010.

    Any advice more than welcomed. Thanks
Page 1
    • Compulsive
    • By Compulsive 14th Apr 19, 10:21 PM
    • 14 Posts
    • 12 Thanks
    Compulsive
    • #2
    • 14th Apr 19, 10:21 PM
    • #2
    • 14th Apr 19, 10:21 PM
    Sorry should say debt isn’t massive
    • enthusiasticsaver
    • By enthusiasticsaver 14th Apr 19, 10:54 PM
    • 8,372 Posts
    • 19,183 Thanks
    enthusiasticsaver
    • #3
    • 14th Apr 19, 10:54 PM
    • #3
    • 14th Apr 19, 10:54 PM
    An Soa needs to be completed with your actual current spending so yes it means trawling through bank statements. Only once you know where your overspend areas are can you make a budget with your desired spending level. Maybe start using cash rather than cards so you stick in budget?

    If you wish to use Ramsey's baby steps then an emergency fund is usually the first step. If you have an overdraft I think I would focus on that first though rather than an emergency fund. Maybe you could start up a savings account and start putting a small amount monthly to start it off but getting out of overdraft would be my priority. As you reduce it drop the limit so you are not tempted to use it again.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Compulsive
    • By Compulsive 15th Apr 19, 5:52 AM
    • 14 Posts
    • 12 Thanks
    Compulsive
    • #4
    • 15th Apr 19, 5:52 AM
    • #4
    • 15th Apr 19, 5:52 AM
    Thank you. Iíll try and get that done today.
    • trailingspouse
    • By trailingspouse 15th Apr 19, 6:25 AM
    • 3,499 Posts
    • 6,099 Thanks
    trailingspouse
    • #5
    • 15th Apr 19, 6:25 AM
    • #5
    • 15th Apr 19, 6:25 AM
    Can I just add that, rather than using cash (where it's easy to 'forget' where all the money went...), it's better to use a debit card even for small amounts wherever possible. Then your bank statement is basically your spending diary.
    I've been keeping a spending diary for over a year now. Whenever I get my bank statement or credit card statement, I record every single transaction on a spread sheet under broad headings such as 'House', 'Car', 'Holiday', which are then broken down into more detail (for example 'House' is broken down as 'mortgage', 'insurance', 'repairs' and so on. That way it becomes easier to see where you are overspending without realising, and where you can make the savings.

    Once you get into a routine, ir really isn't difficult or time-consuming, and is a very powerful tool in keeping tabs on your hard-earned money.
    Welcome to the DFW board, it really is a helpful place.
    • enthusiasticsaver
    • By enthusiasticsaver 15th Apr 19, 8:07 AM
    • 8,372 Posts
    • 19,183 Thanks
    enthusiasticsaver
    • #6
    • 15th Apr 19, 8:07 AM
    • #6
    • 15th Apr 19, 8:07 AM
    Can I just add that, rather than using cash (where it's easy to 'forget' where all the money went...), it's better to use a debit card even for small amounts wherever possible. Then your bank statement is basically your spending diary.
    Originally posted by trailingspouse
    Using a debit card for everything is better for finding out where all your money goes as you say the bank account is then a spending diary although of course if you do multiple shops at a supermarket for all sorts of stuff unless you keep receipts for everything too multiple transactions at Tesco wont help if some are for food, petrol or clothes etc.

    Using cash is better for keeping in budget as studies have shown people find handing a card over so much easier than cash. You can also see at a glance how much of the budget you have left.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Compulsive
    • By Compulsive 15th Apr 19, 8:27 AM
    • 14 Posts
    • 12 Thanks
    Compulsive
    • #7
    • 15th Apr 19, 8:27 AM
    • #7
    • 15th Apr 19, 8:27 AM
    Previously I’ve tried having cash but either forget the envelope or need it and my husband has it. It did work otherwise. I think I like the idea of using different cards for different things but just need to actually get a budget sorted first. It seem so bloody overwhelming!
    • Mnd
    • By Mnd 15th Apr 19, 9:40 AM
    • 1,176 Posts
    • 1,727 Thanks
    Mnd
    • #8
    • 15th Apr 19, 9:40 AM
    • #8
    • 15th Apr 19, 9:40 AM
    Don't worry about "stupid" questions, if you don't understand you have done the right thing by asking. You will get help on here.

    Your SOA isn't written in stone, so you can still do it with best guesses where necessary and start getting a handle on your spending and refine it as you go on
    • EssexHebridean
    • By EssexHebridean 15th Apr 19, 11:34 AM
    • 9,181 Posts
    • 48,183 Thanks
    EssexHebridean
    • #9
    • 15th Apr 19, 11:34 AM
    • #9
    • 15th Apr 19, 11:34 AM
    First step - SOA as you already know. Ignore anything more long term fror now than that, and generally stopping to think before you spend ANYTHING. Ask yourself whether you need to spend, is there anything else you can use instead of the thing you're buying, can you manage without the thing you're buying? If the answer to the first question is no, or either of the second two, yes, then put the card away and leave the shop!
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): Stoozing.com SOA Calculator
    • Compulsive
    • By Compulsive 15th Apr 19, 12:47 PM
    • 14 Posts
    • 12 Thanks
    Compulsive
    Thanks so much. I’ve begun to really think before I buy but still need to sort this mess out. I’m that person who can’t afford to go on holiday but probably spends £200 a month on eating out/takeaway through lack of organisation.
    • EssexHebridean
    • By EssexHebridean 15th Apr 19, 1:56 PM
    • 9,181 Posts
    • 48,183 Thanks
    EssexHebridean
    See that's easily fixable, which is a great thing! From right now - start being organised, and no, that's not as flippant as it sounds. Before you can "be organised" you need to put the steps in place - so, first job - what are you having for dinner every night this week? Rack your brains and remember what you have in your cupboards, fridge, freezer etc and make a plan. Anything you haven't got - come up with something to replace that with, so for example a recipe needs sweetcorn but you've only got frozen peas - switch it about. No minced beer for bolognese but a whole punnet of mushrooms in the fridge? Chop them finely and use those in place of the meat, with a nice big handful of split red lentils to add extra bulk & texture. Make the stuff you have work for you. Then repeat that planning every week going forwards - obviously as time goes on you're going to need to buy more stuff as you've used what you have - and that is where a shopping list comes in - keep one running on your phone and when you use the last of a thing, add it to the list.

    Meal Plan > Ascertain what you already have > shopping list to buy the things you haven't, and need > shop according to that list. it DOES work. Set yourself a specific sum for takeaway once a month, programme that in - if you usually collect then take the money out in cash - any change goes onto a shelf and after a few months you realise you have enough for either an additional takeaway or even better a "free" month where nothing needs to come out of the bank for your regular takeaway.
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): Stoozing.com SOA Calculator
    • Unicorn cottage
    • By Unicorn cottage 15th Apr 19, 2:23 PM
    • 260 Posts
    • 344 Thanks
    Unicorn cottage
    Would be good to know what your debts are i.e. credit card 1 @ 8% etc. It is likely that the overdraft is costing you the most so good to have this information so that you can target overpayments appropriately whilst paying minimum payments to other debts. Also do you have anything you can sell? Facebook marketplace is a great way to sell stuff now for free unless it is super specialist. So get any languishing bits and bobs on there and make sure that money goes into your bank account and straight to your debt.
    Following the Martin mantra "Earn more, have less debt, improve credit worthiness"
    • Compulsive
    • By Compulsive 15th Apr 19, 4:41 PM
    • 14 Posts
    • 12 Thanks
    Compulsive
    @essexhebridean thank you so much. I think that’s exactly what I needed to hear! I’ve sold almost all I can but have made the mistake of using that as “extra” money. Only 1 credit card at the moment at 0%. I don’t use it. It was a money transfer to zero the overdraft because I was at my limit.
    • foxgloves
    • By foxgloves 15th Apr 19, 6:11 PM
    • 4,776 Posts
    • 26,637 Thanks
    foxgloves
    Ohhh, your behaviour around money is so like how I used to be before I was struck by a massive LBM about 10 years ago, when we changed our spend ways & paid off £30k of debt. Agree completely with the advice that's already been given. You need to plan more & when you are tempted, you need to make different choices. Meal planning can save a huge amount, not just on your grocery budget, but on those expensive extra food spends which usually come down to habit/lack of planning...... frequent takeaways (we had one or two a week....now only about four a year), our seeming inability to walk more than 50 metres down any high street without popping in to a coffee shop, top-up shops at the supermarket on the way home from work because you can't remember what food you've actually got in but you almost certainly won't fancy it as much as the expensive thing you're now going to buy, etc, etc. Oh, & taking packed lunch to work every day. Honestly, it takes minutes, that's all, & in our case, we worked out that we'd previously spent £2000 per year popping out to upmarket purveyors of sandwiches in our lunch hours.
    The key is to do a forensic analysis of your bank statements, identify all the money leakages, then put practical plans in place to plug them.
    When I first started debt busting, I got my overdraft paid off first. Stop wasting money, so that each month, the amount you are overdrawn reduces. When it's gone, budgeting is much easier because all your income is your own. It isn't disappearing into a black hole. Then you can increase your repayments to other lenders. But get those naughty leaks plugged.
    Good luck,
    F
    Money can't jump out of your purse on its own so ask 'Can I borrow one, make one, grow one, bake one, re-purpose or recycle, acquire it for free?' Yes? Then put that purse away & keep your money because little savings
    Payment received from surveys: 2015 = £320 2016 = £210 2017 = £304 2018 = £418 2019 = £60
    • Compulsive
    • By Compulsive 15th Apr 19, 7:19 PM
    • 14 Posts
    • 12 Thanks
    Compulsive
    Thank you so much. You have just described it in a nutshell. I’ve sorted childcare for tomorrow morning and I’m going to head to the library to spend 4 hours trawling statements and making a proper SOA. Hopefully no distractions and an environment where I can really think will help this all come together.
    • Compulsive
    • By Compulsive 16th Apr 19, 10:48 AM
    • 14 Posts
    • 12 Thanks
    Compulsive
    [font=courier new]Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 1900
    Partners monthly income after tax....... 1160
    Benefits................................ 137.6
    Other income............................ 45
    Total monthly income.................... 3242.6


    Monthly Expense Details

    Mortgage................................ 688.9
    Secured/HP loan repayments.............. 182.10000000000002
    Rent.................................... 0
    Management charge (leasehold property).. 15
    Council tax............................. 268.89
    Electricity............................. 50
    Gas..................................... 50
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 0
    Mobile phone............................ 16
    TV Licence.............................. 12.12
    Satellite/Cable TV...................... 0
    Internet Services....................... 32
    Groceries etc. ......................... 280
    Clothing................................ 80
    Petrol/diesel........................... 160
    Road tax................................ 10.5
    Car Insurance........................... 51.45
    Car maintenance (including MOT)......... 20
    Car parking............................. 10
    Other travel............................ 20
    Childcare/nursery....................... 200
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 20
    Pet insurance/vet bills................. 64.02
    Buildings insurance..................... 29.17
    Contents insurance...................... 0
    Life assurance ......................... 53.51
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 80
    Entertainment........................... 160
    Holiday................................. 200
    Emergency fund.......................... 100
    Cleaner................................. 48
    Window Cleaner.......................... 10
    Swimming................................ 50
    Acrobay................................. 30
    EIS..................................... 13.47
    Total monthly expenses.................. 3035.13



    Assets

    Cash.................................... 448.02
    House value (Gross)..................... 245000
    Shares and bonds........................ 0
    Car(s).................................. 3000
    Other assets............................ 0
    Total Assets............................ 248448.02



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 198045...(688.9)....2
    Secured Debt.................. 3095.....(182.1)....4.9
    Total secured & HP debts...... 201140....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Credit.........................2884......18.11.... .0
    Credit.........................300.......10....... .0
    Total unsecured debts..........3184......28.11.....-



    Monthly Budget Summary

    Total monthly income.................... 3,242.6
    Expenses (including HP & secured debts). 3,035.13
    Available for debt repayments........... 207.47
    Monthly UNsecured debt repayments....... 28.11
    Amount left after debt repayments....... 179.36


    Personal Balance Sheet Summary
    Total assets (things you own)........... 248,448.02
    Total HP & Secured debt................. -201,140
    Total Unsecured debt.................... -3,184
    Net Assets.............................. 44,124.02
    • Compulsive
    • By Compulsive 16th Apr 19, 10:52 AM
    • 14 Posts
    • 12 Thanks
    Compulsive
    Hi, I've posted my SOA. I did it myself including all the takeaways etc the now but this is my "realistic" version. I've budgeted enough in entertainment to include a monthly take out and days out etc.
    What do I do now? Does this mean I have £179 a month to overpay debts?
    Sorry - I just find this so confusing.
    Thanks so much to all who have helped so far.
    • EssexHebridean
    • By EssexHebridean 16th Apr 19, 11:07 AM
    • 9,181 Posts
    • 48,183 Thanks
    EssexHebridean
    Right then - l;et's take a look. Comments in red, as always.

    [font=courier new]Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 1900
    Partners monthly income after tax....... 1160
    Benefits................................ 137.6
    Other income............................ 45
    Total monthly income.................... 3242.6


    Monthly Expense Details

    Mortgage................................ 688.9
    Secured/HP loan repayments.............. 182.10000000000002
    Rent.................................... 0
    Management charge (leasehold property).. 15
    Council tax............................. 268.89 Assume you're in scotland and this includes water rates? Either way though this seems VERY high - especially in light of your property value as stated.
    Electricity............................. 50 Use the comparison sites to make sure you're on the best deal for this and your gas. also look to reduce useage.
    Gas..................................... 50
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 0 Bundled with internet?
    Mobile phone............................ 16
    TV Licence.............................. 12.12 Check the pennies on this - mine's recently gone up.
    Satellite/Cable TV...................... 0 No paid for TV services at all?
    Internet Services....................... 32 If this includes line rental then fair - if not then it's expensive.
    Groceries etc. ......................... 280
    Clothing................................ 80 This is a bit high - for now trim to essentials only for adults (pants & socks) and look to charity shops/eBay for kids stuff for everything aside from underwear.
    Petrol/diesel........................... 160
    Road tax................................ 10.5
    Car Insurance........................... 51.45
    Car maintenance (including MOT)......... 20 for two cars this is a lot too low. Think of Serv icing, MOT, tyres, screenwash...
    Car parking............................. 10 Is this avoidable - can you park & walk for example?
    Other travel............................ 20
    Childcare/nursery....................... 200
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 20 Can this be made cheaper by using pre-paid prescription cards?
    Pet insurance/vet bills................. 64.02 This is VERY high - have yiou checked that the cover you get is worth the cost, and whether there is anything available for better value from elsewhere?
    Buildings insurance..................... 29.17 This includes contents too, yes?
    Contents insurance...................... 0
    Life assurance ......................... 53.51 have you done a recent price comparison to check this is your best value option for the cover you need?
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 80 HOW much? This is for 4 of you, two of whom are kids and one of whom is a chap, right? If you'd said half of that in a month I'd have said it was too pricey!
    Entertainment........................... 160 This sounds quite high for someone in debt, if I'm honest.
    Holiday................................. 200 Is this something you're committed to already?
    Emergency fund.......................... 100 Yep - great.
    Cleaner................................. 48 Your partners monthly income suggests part time hours - allowing for that, there is not really any place for £48 a month to a cleaner.
    Window Cleaner.......................... 10
    Swimming................................ 50 Is this lessons, for the kids?
    Acrobay................................. 30 Gymnastics club? Might be better to bump this and the swimming under other child costs to be honest.
    EIS..................................... 13.47 What's this - and is it actually needed?
    Total monthly expenses.................. 3035.13



    Assets

    Cash.................................... 448.02 Allowing that you're putting £350 a month aside for EF, car maintenance, presents and holiday, this doesn't quite add up. Are those amounts definitely being put away?
    House value (Gross)..................... 245000
    Shares and bonds........................ 0
    Car(s).................................. 3000
    Other assets............................ 0
    Total Assets............................ 248448.02



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 198045...(688.9)....2
    Secured Debt.................. 3095.....(182.1)....4.9
    Total secured & HP debts...... 201140....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Credit.........................2884......18.11.... .0 is this a credit card? If so when does the 0% interest finish? The monthly payment also looks very low - is this a typo? If not are you definitely paying the minimum payment?
    Credit.........................300.......10....... .0 is this a credit card? If so when does the 0% interest finish?
    Total unsecured debts..........3184......28.11.....-



    Monthly Budget Summary

    Total monthly income.................... 3,242.6
    Expenses (including HP & secured debts). 3,035.13
    Available for debt repayments........... 207.47
    Monthly UNsecured debt repayments....... 28.11
    Amount left after debt repayments....... 179.36 Do you actually have this each month?


    Personal Balance Sheet Summary
    Total assets (things you own)........... 248,448.02
    Total HP & Secured debt................. -201,140
    Total Unsecured debt.................... -3,184
    Net Assets.............................. 44,124.02
    Originally posted by Compulsive
    There is some wiggle room there as there is a fair amount of "luxury" in there - the holiday spend, and the haircuts are the obvious ones, but also a high monthly clothing spend.

    Be sure where you are budgeting for month being put aside for things that actually happens - and revisit that car maintenance amount pronto as for cars of the ages yours presumably are this is a long way short of enough! An annual service is going to cost you £100 - £150 for each, and a set of tyres even every 2 years on each car is going to be another 120 - 200 a year or possibly more. Add in MOT and sundries and I'd think you need at LEAST £50 a month going to that area, for security.
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): Stoozing.com SOA Calculator
    • enthusiasticsaver
    • By enthusiasticsaver 16th Apr 19, 1:35 PM
    • 8,372 Posts
    • 19,183 Thanks
    enthusiasticsaver
    Ok there are some things on that soa I would say are not essential but your debts aren't huge so it is your call as to which takes priority. I am not sure how old your kids are but if your partner is part time it does not seem unreasonable for he/she to clean the house and dispense with the cleaner and the entertainment could be shaved off a bit too. You have some savings which is good but if you are saving the £200 monthly for a holiday the balance looks low unless you have already paid for it. Even without cutting anything you have £179 spare each month which could go towards the credit card as the monthly payment looks very low.

    I wonder if a spending diary would work for you where you record everything you spend for a few months to see how accurate that soa really is. When do the 0% deals expire? What was the secured loan for?
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • macman
    • By macman 16th Apr 19, 2:32 PM
    • 43,258 Posts
    • 18,428 Thanks
    macman
    £636pa on life assurance, but no contents insurance at all?
    £768 on vet bills?
    Query no water rates-you are in Scotland?
    Query C. tax at £3216pa?!
    You may think some of the SOA comments are nitpicking, but you can't begin to manage your debt until you know exactly what your assets and liabilities are.
    No free lunch, and no free laptop
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,564Posts Today

7,427Users online

Martin's Twitter
  • Have a great Easter, or a chag sameach to those like me attending Passover seder tomorrow. I?m taking all of next? https://t.co/qrAFTIpqWl

  • RT @rowlyc1980: A whopping 18 days off work for only 9 days leave! I?ll have a bit of that please......thanks @MartinSLewis for your crafty?

  • RT @dinokyp: That feeling when you realise that you have 18 days of work and only used 9 days of your annual leave! Thanks @MartinSLewis h?

  • Follow Martin