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  • FIRST POST
    • sunflowerlady
    • By sunflowerlady 14th Jan 20, 1:06 PM
    • 54Posts
    • 98Thanks
    sunflowerlady
    SOA - Any advice gratefully received
    • #1
    • 14th Jan 20, 1:06 PM
    SOA - Any advice gratefully received 14th Jan 20 at 1:06 PM
    A few people on here suggested I fill an SOA in, so here it is!


    We've had credit cards for as long as I can remember, cleared with a loan a couple of times but always gone back to the bad habits of living beyond our means and just putting it on credit.


    Bit older, and almost wiser, and we seem to have stopped reaching for the credit card like we used to and have been trying to pay them back but it's all getting a bit overwhelming with all the 0% rate swapping etc. etc.


    The CC/Loan debt is pretty much 17 years of living beyond our means at an average of £200.00pm!


    *we would like to clear our debts by taking equity out of the house*


    I know this is a big no, no for most people but we feel that we are able to close our CC accounts and with the excess we save, start to increase our savings/shares and use that instead of credit!


    If we could borrow £40k over 15 years and have it paid off at the same time as the mortgage that would really help us out with other goals - such as saving for POTENTIAL University and Weddings.


    We have 24/26 years left at work respectively and DH is looking at a promotion later this year (obvs not guaranteed) and I am currently studying to finalize my qualifications.


    And as a final note - DH gets anywhere between £1,500 and £3,000 bonus each year (not included below).


    Statement of Affairs and Personal Balance Sheet


    Household Information


    Number of adults in household........... 2

    Number of children in household......... 2 (Under 11)

    Number of cars owned.................... 1


    Monthly Income Details



    Monthly income after tax................ 2567.1

    Partners monthly income after tax....... 1909.9

    Benefits................................ 137.6 (Child Benefit)

    Other income............................ 0

    Total monthly income.................... 4614.6



    Monthly Expense Details


    Mortgage................................ 902 (15 years left and includes monthly overpayment)

    Secured/HP loan repayments.............. 275 (Loan to pay CC)

    Rent.................................... 0

    Management charge (leasehold property).. 0

    Council tax............................. 139

    Electricity............................. 42.5 (Elec & Gas Combined £90pm)

    Gas..................................... 42.5 (Elec & Gas Combined £90pm)

    Oil..................................... 0

    Water rates............................. 39.31 (Water meter)

    Telephone (land line)................... 0

    Mobile phone............................ 121.64 (inludes 3 x mobiles, no land-line, broadband, spotify, Netflix)

    TV Licence.............................. 12.83

    Satellite/Cable TV...................... 0

    Internet Services....................... 0

    Groceries etc. ......................... 400 (includes household items)

    Clothing................................ 50

    Petrol/diesel........................... 70

    Road tax................................ 3.21

    Car Insurance........................... 26.23

    Car maintenance (including MOT)......... 50

    Car parking............................. 0

    Other travel............................ 0

    Childcare/nursery....................... 40 (after school club)

    Other child related expenses............ 100 (Sports Club, Tutor)

    Medical (prescriptions, dentist etc).... 8

    Pet insurance/vet bills................. 0

    Buildings insurance..................... 7.5

    Contents insurance...................... 7.5

    Life assurance ......................... 70.45 (inc, Critical illness)

    Other insurance......................... 0

    Presents (birthday, christmas etc)...... 150 (def needs upping)

    Haircuts................................ 30

    Entertainment........................... 100

    Holiday................................. 200

    Emergency fund.......................... 100

    Bank Fee................................ 15.5

    Total monthly expenses.................. 3003.17



    Assets


    Cash.................................... 2000

    House value (Gross)..................... 280000

    Shares and bonds........................ 6000

    Car(s).................................. 1500

    Other assets............................ 3000

    Total Assets............................ 292500



    Secured & HP Debts


    Description....................Debt......Monthly.. .APR

    Mortgage...................... 160000...(902)......0

    Secured Debt.................. 2070.7...(275)......0 (ends Jan21)

    Total secured & HP debts...... 162070.7..-.........-



    Unsecured Debts
    Description....................Debt......Monthly.. .APR

    Credit Card....................7621.74...265.......0(over paying each month)

    Credit Card....................2877.96...100.......0
    (overpaying each month)


    Overdraft.......................500.......0....... ..0

    Overdraft......................1800......0........ .0

    Store Card.....................1000......90........23.9


    Credit Card....................7039.87...250.......0
    (overpaying each month)

    Credit Card....................10543.9...250.......0

    (overpaying each month)

    Credit Card....................6059.32...200.......0

    (overpaying each month)

    Credit Card....................5091.23...150.......0

    (overpaying each month)

    Total unsecured debts..........42534.02..1305......-




    Monthly Budget Summary


    Total monthly income.................... 4,614.6

    Expenses (including HP & secured debts). 3,003.17

    Available for debt repayments........... 1,611.43

    Monthly UNsecured debt repayments....... 1,305

    Amount left after debt repayments....... 306.43





    Personal Balance Sheet Summary

    Total assets (things you own)........... 292,500

    Total HP & Secured debt................. -162,070.7

    Total Unsecured debt.................... -42,534.02

    Net Assets.............................. 87,895.28



    Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.



    Thank you!
Page 2
    • EssexHebridean
    • By EssexHebridean 15th Jan 20, 3:48 PM
    • 9,896 Posts
    • 50,320 Thanks
    EssexHebridean
    Some coments in red below:

    I've been busy since my last post.

    1. I have put together a spreadsheet of all debts (credit cards, store card, loan, overdrafts) - and unbelievably I found a CC that I forgot we had . The spreadsheet includes the balances at Jan 2020, the interest rates and their expiry dates, the minimum payment that is needed each month, and when the payment is due. I have sorted this list into priority of highest interest rates first (plus the two overdrafts) and I have made a plan to round all the minimums up to the nearest £10 on all the 0% debts and concentrate on paying off the priority debts. Are you paying these by direct debit? If so then you have just scored yourself another nice easy win here - as by setting up a DD for a set amount rather than the minimum, that payment stays the same, rather than falling over time as the one set to "minimum" would - meaning that as time goes on you pay off a little more each month without even noticing it. Note though - this ONLY works for cards that you are not using it - and do pay attention to any correspondence that tells you about a change in the minimum payment just in case it switches to a level above the payment you are making! (Unlikely but can happen)


    2. I have put £250 per month on a Standing Order to an account in DH's name - this is to cover Emergencies, Car Maintenance, Social events and Birthdays/Christmas. Be very careful combining so many things into one pot as it can be very tough to keep track of how much you have in each area at any given time. I'm always particularly wary when people are combining regular spends (so in your case social events. presents) with "important stuff" - so car maintenance and EF in this case. It might be worth looking to see whether your bank allows you to open online savings accounts off the back of your main current account which might help make things simpler.


    3. Holidays - we are committed to one in May - its all inclusive and 95% paid for so cancelling it would not make sense. Agreed - but agree between yourselves to manage with the clothes that you already have and make sure you budget carefully for any spending money that will be needed. (Also remember to budget for spends like sun cream etc!)We had a booking on a hotel for October, it was only reserved with free cancellation but we were planning (without any idea how would pay for it without reaching for the CC) on going so would have had to pay for that plus flights, plus spending - I have cancelled the reservation. On top of all that, we had been discussing a BIG holiday for 2021 which would have cost in excess of £10,000, Today, we have told our friends that we are not going and why. well done - who knows, maybe they are quietly breathing a sigh of relief too! That would be one heck of a big spend!


    4. Groceries - We are sitting down at the weekend to go through the bank statement and figure out where we are spending the most. At the same time do an inventory of what is in your cupboards, fridge and freezer, and do a meal plan to make as much use of the things you already have for the next couple of weeks. Once that is done write a shopping list for ONLY the things you actually need - your challenge is to see quite how little it is possible to spend between now and the beginning of next month!


    5. I love the idea of thinking of the big bad number as 100% and working in chunks of 1% at a time. We can pay 3 & 4% per month off, not including DH bonus (which is all going towards the debt) or my overtime (project for next 3 months). Yes - anything that gives you small goals to aim for can really help - good thinking!


    6. How do I make one of those signatures for the bottom of my post? I want to put a visual of where we started and update it regularly.


    Thanks all
    Originally posted by sunflowerlady
    Sounds to me like your lightbulb is very firmly ON!


    For others reading - "an Aspirational SOA" was referred to earlier - we use this phrase to refer to an SOA which has been prepared either by someone estimating what they "think" they spend, or what they think that they "should" be spending - rather than what is actually the most helpful, which is the SOA which reflects exactly where your finances are right at the moment of writing. So as an example - someone puts that they spend £300 on groceries - where in fact they are spending £600 - but they know from having read other threads that this figure is too high - so they resolve that they will be changing things from now - and put in the lower figure. It's done with the right intent but means it makes it tougher to work out exactly where things are going wrong and how they can be turned around.
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    • theoretica
    • By theoretica 15th Jan 20, 3:52 PM
    • 6,138 Posts
    • 7,604 Thanks
    theoretica
    I suggest one of the first aims should be to get out of your overdrafts and stay out of them. This is psychological to set down a marker that you have stopped spending money you don't have and are committed to living in the black.

    I agree with other posters that putting the debt onto the house doesn't seem a good idea, particularly as your stated aim is then to save. You would be borrowing money against the house, just to put into savings accounts against potential future need. Don't do it - pay off the debt and then save. Consider the future need when and if it comes and decide then, not now, if it is worth borrowing again, whether against your house or unsecured.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • sunflowerlady
    • By sunflowerlady 15th Jan 20, 4:38 PM
    • 54 Posts
    • 98 Thanks
    sunflowerlady
    I suggest one of the first aims should be to get out of your overdrafts and stay out of them. This is psychological to set down a marker that you have stopped spending money you don't have and are committed to living in the black.

    I agree with other posters that putting the debt onto the house doesn't seem a good idea, particularly as your stated aim is then to save. You would be borrowing money against the house, just to put into savings accounts against potential future need. Don't do it - pay off the debt and then save. Consider the future need when and if it comes and decide then, not now, if it is worth borrowing again, whether against your house or unsecured.
    Originally posted by theoretica
    Coincidentally, we got a letter from the bank today stating that any overdraft above the £260 interest free one included with our account will go up to 35.6% as of 4th April. So the two overdrafts are def up there with the top priorities!!!!
    Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

    Jan 2020 Update: Loan £3,301.08, Credit Cards £41,333.86, Overdrafts £2,300.00. Total Debt: £46,934.94 / 1% = £469.35
    • sunflowerlady
    • By sunflowerlady 15th Jan 20, 4:40 PM
    • 54 Posts
    • 98 Thanks
    sunflowerlady
    Some coments in red below:



    Sounds to me like your lightbulb is very firmly ON!


    For others reading - "an Aspirational SOA" was referred to earlier - we use this phrase to refer to an SOA which has been prepared either by someone estimating what they "think" they spend, or what they think that they "should" be spending - rather than what is actually the most helpful, which is the SOA which reflects exactly where your finances are right at the moment of writing. So as an example - someone puts that they spend £300 on groceries - where in fact they are spending £600 - but they know from having read other threads that this figure is too high - so they resolve that they will be changing things from now - and put in the lower figure. It's done with the right intent but means it makes it tougher to work out exactly where things are going wrong and how they can be turned around.
    Originally posted by EssexHebridean
    Thank you for your message, we do actually have access to a few savings accounts within our bank account so I will split them 4 ways! Thanks for the tip!!!

    Friends were relieved I think, they have no debt but do have a couple of big purchases to make this year so itís eased that for them.
    Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

    Jan 2020 Update: Loan £3,301.08, Credit Cards £41,333.86, Overdrafts £2,300.00. Total Debt: £46,934.94 / 1% = £469.35
    • Naomim
    • By Naomim 15th Jan 20, 5:26 PM
    • 1,338 Posts
    • 3,260 Thanks
    Naomim
    I know many teachers and the majority of gifts get given away - they get hundreds of chocolates and ďbest teacherĒ mugs that they simply canít get through them. Just get the kids to make a card. Secret Santa is inevitably tat - Poundland it is from future!
    Originally posted by monetxchange
    Teachers - I arrange the collections and buy vouchers because I know this is what the teachers want and it keeps it to £5 per child..
    Originally posted by sunflowerlady
    Sorry, not a rant directed at you Sunflower, but teachers gifts (including vouchers) drive me nuts. I hate the whatsapp messages suggesting we all put £5 in for Christmas for a teacher and the T/A's that's only taught your child for 6 weeks and then again at the end of the year. If you are in debt, that could be £5 you haven't got and I agree a card should be enough. I never put in the collections Was so pleased when eldest got into year 7 and that all stopped. Two more years for 10yo

    Naomim
    Credit Cards £33,220.42 NOV 2019

    Here's my diary: A Ditherer's Diary Again
    • middleclassbutpoor
    • By middleclassbutpoor 15th Jan 20, 9:45 PM
    • 649 Posts
    • 605 Thanks
    middleclassbutpoor
    Sounds like you are getting a plan together.

    I would highly recommend that you have a read through this

    https://www.daveramsey.com/dave-ramsey-7-baby-steps?snid=start.steps#baby_step_1 - He has helped a lot of people with his method.

    I would also consider using your savings to chunk down your debt quickly. One of the things that resonated with me is that you should look at your finances like a balance sheet. You have your assets on one side of the page and your debts on the other. You debts are borrowing for your assets in essence so if you ignore the house, you are borrowing £7k to have this in your savings and investments.

    You could clear nearly 15% of your debt in a week. If you add in annual bonuses of £1500-£3k - that is 5-10% of your debts over a 2 year period.

    Free up your income from these debts and tidy up your budgeting. I would be aiming to clear around 4-5% of your debt each month.

    If you can't get that from budgeting with the income you have - you haven't done your budget as seriously as you could.

    Think about it as a race, the longer you are in it, the more tired you will get. Aiming to get out in 2 years is where most people aim for when you apply the Dave Ramsey method. It works and in 2 years, with your income, your expensive holidays could be budgeted without breaking a sweat.
    • sunflowerlady
    • By sunflowerlady 15th Jan 20, 10:44 PM
    • 54 Posts
    • 98 Thanks
    sunflowerlady
    Sounds like you are getting a plan together.

    I would highly recommend that you have a read through this

    https://www.daveramsey.com/dave-ramsey-7-baby-steps?snid=start.steps#baby_step_1 - He has helped a lot of people with his method.

    I would also consider using your savings to chunk down your debt quickly. One of the things that resonated with me is that you should look at your finances like a balance sheet. You have your assets on one side of the page and your debts on the other. You debts are borrowing for your assets in essence so if you ignore the house, you are borrowing £7k to have this in your savings and investments.

    You could clear nearly 15% of your debt in a week. If you add in annual bonuses of £1500-£3k - that is 5-10% of your debts over a 2 year period.

    Free up your income from these debts and tidy up your budgeting. I would be aiming to clear around 4-5% of your debt each month.

    If you can't get that from budgeting with the income you have - you haven't done your budget as seriously as you could.

    Think about it as a race, the longer you are in it, the more tired you will get. Aiming to get out in 2 years is where most people aim for when you apply the Dave Ramsey method. It works and in 2 years, with your income, your expensive holidays could be budgeted without breaking a sweat.
    Originally posted by middleclassbutpoor
    Iíll have a look at that link, thank you!

    Iíve been working on the spreadsheet tonight and have got down to zero in 23 months. DH has released some shares/investments tonight too but they take time to come in. With a bit of Xmas money, the shares/investments/DH Bonus and the next three months repayments, we will have cleared 20% by March. Both overdrafts, store card abc one CC will be gone. Then itís going to be slow and steady from then on.

    Iím amazed at what a bit of focus can achieve.

    Thank you
    Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

    Jan 2020 Update: Loan £3,301.08, Credit Cards £41,333.86, Overdrafts £2,300.00. Total Debt: £46,934.94 / 1% = £469.35
    • sunflowerlady
    • By sunflowerlady 16th Jan 20, 9:12 AM
    • 54 Posts
    • 98 Thanks
    sunflowerlady
    In relation to the emergency fund, do people keep it at £1000 or do they keep adding to it?
    Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

    Jan 2020 Update: Loan £3,301.08, Credit Cards £41,333.86, Overdrafts £2,300.00. Total Debt: £46,934.94 / 1% = £469.35
    • OnlyPariah
    • By OnlyPariah 16th Jan 20, 9:38 AM
    • 123 Posts
    • 304 Thanks
    OnlyPariah
    £1000 is recommended as the amount to have in there as you start to tackle the debt head on. The idea is you don't spend any more on credit. Once the debt is cleared I believe most people aim at about 3-6 months of salary in there. It helps cover the real emergencies. Sickness, job less etc.
    Tesco £7647.88 £7,488.96 Asda £2,552 £2,300 Virgin ££4,204.95 £4,204.95
    Halifax £2,853 £2,796.64 Barclaycard £7,866.32 £7,866.32 Wedding £488 EF £63
    • sunflowerlady
    • By sunflowerlady 16th Jan 20, 2:27 PM
    • 54 Posts
    • 98 Thanks
    sunflowerlady
    I’ve had a productive time unlinking my card from the Amazon account, eBay account and unsubscribing from countless emails that try and tempt me into spending money!!!! Also, I’ve been hiding/unfollowing FB pages that basically just want you to shop with them! ��
    Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

    Jan 2020 Update: Loan £3,301.08, Credit Cards £41,333.86, Overdrafts £2,300.00. Total Debt: £46,934.94 / 1% = £469.35
    • enthusiasticsaver
    • By enthusiasticsaver 16th Jan 20, 4:38 PM
    • 9,772 Posts
    • 22,926 Thanks
    enthusiasticsaver
    You have made a good start I think by not going ahead with a minimum £10k holiday (people always underestimate) as you have more than £40k debt apart from your mortgage. I suggest you divert mortgage overpayments towards your unsecured debt starting with overdrafts.

    I also agree that putting a stop to teachers collections is a good idea. That is huge pressure to put on parents at an expensive time of year. I am sure teachers do appreciate vouchers but if you are going into debt then you cannot afford it and I am sure you are not alone. When did giving teachers gifts at Christmas start let alone the old lady down the road. Watch Martin Lewis program on catchup about Christmas presents and how to cut right back. I think you will find people will be relieved not to have to add to collections.

    I agree you should split the savings further. One for car, one for gifts/xmas and one for emergencies. Social events could be lumped in with entertainment. Groceries is high. Are you using discount supermarkets and meal planning?

    I would urge you not to put the debt on your mortgage. You are already paying almost £1200 per month on mortgage and existing secured debt. If either of you lost your job and your mortgage was even higher due to increasing it to consolidate your existing debt again you stand a very good chance of defaulting on your mortgage and losing your home as you would not be able to pay that mortgage on one salary. Debt consolidation never works and will just get you into a bigger hole.
    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
    • sunflowerlady
    • By sunflowerlady 16th Jan 20, 4:58 PM
    • 54 Posts
    • 98 Thanks
    sunflowerlady
    I’ve just logged into Hitatchi to see what the settlement figure was looking like and I’ve realised I picked up the wrong figure for the balance. I could actually cry right now. It’s a £1,500 set back.

    I wish I could post emojis right now. Grrrrrrrrrrrrrr


    I've updated my signature
    Last edited by sunflowerlady; 16-01-2020 at 5:11 PM.
    Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

    Jan 2020 Update: Loan £3,301.08, Credit Cards £41,333.86, Overdrafts £2,300.00. Total Debt: £46,934.94 / 1% = £469.35
    • middleclassbutpoor
    • By middleclassbutpoor 16th Jan 20, 8:56 PM
    • 649 Posts
    • 605 Thanks
    middleclassbutpoor
    You need to have intention with what you are doing, it is what keeps you going through the ups and downs.

    Well done on getting some focus on all of this. Mistakes will happen, plans will be challenged - I think Dave Ramsey refers it to Murphy calling which is reference to Murphy's Law of "Anything that can go wrong will go wrong."

    Thankfully an incorrect balance is a small hiccup. Keep going - you've got this!
    • nonsensefactory
    • By nonsensefactory 17th Jan 20, 6:12 AM
    • 43 Posts
    • 12 Thanks
    nonsensefactory
    If you've been overpaying the mortgage is there an option for a payment holiday and throw every red cent you can find at the cc's....cash in investments, firesale on -bay, forget the holiday and go camping + slash the presents/gifts ?
    • Sea Shell
    • By Sea Shell 17th Jan 20, 7:28 AM
    • 3,169 Posts
    • 6,367 Thanks
    Sea Shell
    Another vote here for stop overpaying the mortgage and throw those pounds at the debt!!

    The other information that may be worth adding to your SOA is when all those 0% CC periods end. It may not be easy to get new deals on 0%, so i'd be tackling the ones that are due to end soonest (after paying debts that have a higher APR)
    Last edited by Sea Shell; 17-01-2020 at 7:51 AM.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
    • sunflowerlady
    • By sunflowerlady 17th Jan 20, 8:42 PM
    • 54 Posts
    • 98 Thanks
    sunflowerlady
    Which is the best snowball calculator to use?
    Jan 2020: Loan £3,576.17, Credit Cards £42,401.86, Store Card £1,833.61, Overdrafts £2,300.00. Total Debt: £50,111.64 / 1% = £501.12

    Jan 2020 Update: Loan £3,301.08, Credit Cards £41,333.86, Overdrafts £2,300.00. Total Debt: £46,934.94 / 1% = £469.35
    • middleclassbutpoor
    • By middleclassbutpoor 17th Jan 20, 8:50 PM
    • 649 Posts
    • 605 Thanks
    middleclassbutpoor
    https://www.stoozing.com/snowball-calculator.php
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