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  • FIRST POST
    • Roses208
    • By Roses208 14th Jan 20, 3:14 PM
    • 4Posts
    • 1Thanks
    Roses208
    Debt free 2020
    • #1
    • 14th Jan 20, 3:14 PM
    Debt free 2020 14th Jan 20 at 3:14 PM
    Hi Everyone,
    I've been reading the treads for a while now and decided to post my own SOA. We have a significant amount of debt we are trying to pay off in a year or so. Most of the debt is from home refurbishments. (windows & doors, boiler, bathroom & garden). We bought our first house quite naively not realising the extent of the work that needed to be done, and within months of moving in the very dated bathroom ceiling came down, the house got bad damp and the boiler gave up. Factor in a wedding and a year off on maternity and this is why we are where we are. Mortgage took out 4 years ago in September over 35 years with only a 5% deposit for £125000. Had the house valued recently and is now worth up to 145000. Our mortgage in due to renewal in September so we are hoping to add the loan at 8.4% (14000) to the mortgage since it was all spent on the house. We are also hopefully going to re-mortgage over 25 years so knocking 6 years off. We realise this will mean we are reducing our equity to 10% but I am only in my late 20s so have time to build it back up. The remaining £700 (does change depending on what's happening in the month and if we have any extras to pay off) is currently being knocked off the smallest credit card. They are both interest free until April 21. Also Husband is almost finished with an engineering degree and already has a position as engineer so is looking at a significant pay rise within the next year or two. I have also been promised a 10% increase from April this year. I am also looking at a £1700 (before tax) bonus this year which will be paid off a card




    Summary

    Monthly Budget SummaryAmount(£)
    Total monthly income: 3,215
    Monthly expenses (incl. HP & secured loans) 2,142.79
    Available for debt repayments 1,072.21
    UNsecured debt repayments 312.6
    Amount left after debt repayments759.61
    Personal Balance Sheet SummaryAmount(£)
    Total Assets (things you own)141,500
    Total Secured & HP Debt-111,000
    Total Unsecured Debt-25,157
    Net Assets5,343


    Household Information

    Number of adults in household 2
    Number of children in household 1
    Number of cars owned 1


    Income, Expense, Debt & Asset Details

    IncomeAmount(£
    )Monthly income after tax 1190
    Partners monthly income 1940
    Benefits 85
    Other income 0
    Total monthly income 3215
    ExpensesAmount(£)
    Mortgage 480
    Secured/HP loan payments 0
    Rent 0
    Management charge 0
    Council tax 112
    Electricity 50
    Gas 50
    Oil 0
    Water Rates 44
    Telephone (land line) 0
    Mobile phone 78.5
    TV Licence 13.29
    Satellite/Cable TV 47
    Internet services 20
    Groceries 400
    Clothing 50
    Petrol/diesel 160
    Road tax 17.06
    Car Insurance 42.52
    Car maintenance (including MOT) 30
    Car Parking 0
    Other travel 0
    Childcare/nursery 0
    Other child related expenses 0
    Medical (prescriptions, dentists, opticians etc.) 10
    Pet Insurance/Vet bills 16.26 (likely to significantly increase due to a big ongoing claim)Buildings Insurance 13.29
    Contents Insurance 13.29
    Life Assurance 20.58
    Other Insurance 0
    Presents (birthday, christmas etc.) 200
    Haircuts 35
    Entertainment 250
    Holiday 0
    Emergency Fund 0
    Total monthly expenses2142.79
    Secured & HP Debt DescriptionDebt(£)Monthly(£)APR(%)
    Mortgage: Amount £111000 Monthly £480 APR 3.4
    Secured & HP Debt totals 111000 - -
    Unsecured Debt DescriptionDebt(£)Monthly(£)APR(%)
    Credit Card Amount £6696 Monthly Min £70 APR 0%
    Credit Card Amount £4498 Monthly Min £45 APR 0%
    Loan Amount £14000 Monthly £200.68.6 APR 8.6%
    Unsecured Debt totals 25194
    Asset DescriptionValue (£)
    Cash 0
    House Value (Gross) 140000
    Shares and bonds 0
    Car(s) 1500
    Other assets (e.g. endowments, jewellery etc) 0
    Total Assets141500
    Last edited by Roses208; 14-01-2020 at 3:22 PM. Reason: FORMAT
Page 1
    • Willing2Learn
    • By Willing2Learn 14th Jan 20, 3:56 PM
    • 5,194 Posts
    • 4,837 Thanks
    Willing2Learn
    • #2
    • 14th Jan 20, 3:56 PM
    • #2
    • 14th Jan 20, 3:56 PM
    Just tidied for you...(My auto-calculations arrive at ever so slightly different totals)

    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................ 1190
    Partners monthly income after tax....... 1940
    Benefits................................ 85
    Other income............................ 0
    Total monthly income.................... 3215


    Monthly Expense Details

    Mortgage................................ 480
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 112
    Electricity............................. 50
    Gas..................................... 50
    Oil..................................... 0
    Water rates............................. 44
    Telephone (land line)................... 0
    Mobile phone............................ 78.5
    TV Licence.............................. 13.29
    Satellite/Cable TV...................... 47
    Internet Services....................... 20
    Groceries etc. ......................... 400
    Clothing................................ 50
    Petrol/diesel........................... 160
    Road tax................................ 17.06
    Car Insurance........................... 42.52
    Car maintenance (including MOT)......... 30
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 16.26
    Buildings insurance..................... 13.29
    Contents insurance...................... 13.29
    Life assurance ......................... 20.58
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 200
    Haircuts................................ 35
    Entertainment........................... 250
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 2152.79



    Assets

    Cash.................................... 0
    House value (Gross)..................... 140000
    Shares and bonds........................ 0
    Car(s).................................. 1500
    Other assets............................ 0
    Total Assets............................ 141500



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 111000...(480)......3.4
    Total secured & HP debts...... 111000....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Credit Card....................6696......70........0
    Credit Card....................4498......45........0
    Loan...........................14000.....200.6.... .8.6
    Total unsecured debts..........25194.....315.6.....-



    Monthly Budget Summary

    Total monthly income.................... 3,215
    Expenses (including HP & secured debts). 2,152.79
    Available for debt repayments........... 1,062.21
    Monthly UNsecured debt repayments....... 315.6
    Amount left after debt repayments....... 746.61


    Personal Balance Sheet Summary
    Total assets (things you own)........... 141,500
    Total HP & Secured debt................. -111,000
    Total Unsecured debt.................... -25,194
    Net Assets.............................. 5,306


    Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • Roses208
    • By Roses208 14th Jan 20, 3:59 PM
    • 4 Posts
    • 1 Thanks
    Roses208
    • #3
    • 14th Jan 20, 3:59 PM
    • #3
    • 14th Jan 20, 3:59 PM
    Thanks Wasn't sure how to do it
    • Willing2Learn
    • By Willing2Learn 14th Jan 20, 4:04 PM
    • 5,194 Posts
    • 4,837 Thanks
    Willing2Learn
    • #4
    • 14th Jan 20, 4:04 PM
    • #4
    • 14th Jan 20, 4:04 PM
    And my thoughts on your SOA:
    • Is you council tax spread across 10 or 12 months?
    • Are you water rates spread across 10 or 12 months? Is it metered?
    • Mobile phone costs are very high. Have you explored cheaper SIM-only contracts?
    • Groceries are quite high too. Do you batch cook? Do you have one of the discount supermarkets near you (Lidl / Aldi)?
    • Do you really spend £2,400 each year on presents?
    • £250/month on entertainment is pretty high (£3,000/annum)
    • You desperately need to save something each month toward your Emergency Fund as it is an essential component of all successful monthly budgets
    • Do you really have £750/month budget surplus or is this an aspirational budget?
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • EssexHebridean
    • By EssexHebridean 14th Jan 20, 4:05 PM
    • 9,896 Posts
    • 50,307 Thanks
    EssexHebridean
    • #5
    • 14th Jan 20, 4:05 PM
    • #5
    • 14th Jan 20, 4:05 PM
    OK - first I'm going to suggest that you DON'T add the loan to the mortgage - not least as your SOA seems to suggest that your surplus will allow you to overpay heavily on the loan which means you will potentially pay it off far more cheaply by concentrating on dealing with it that way. It's generally a pretty bad idea to convert unsecured debt into secured - and by adding it to the mortgage that would effectively be what you are doing.

    On the SOA then -
    ExpensesAmount(£)
    Mortgage 480
    Secured/HP loan payments 0
    Rent 0
    Management charge 0
    Council tax 112 If this is paid over 10 months then remember that you have two months coming up where you will not be paying this - make sure those two payments get shifted across to overpay the loan (or to save towards paying the loan off early if you can't make ongoing overpayments to it.
    Electricity 50
    Gas 50
    Oil 0
    Water Rates 44
    Telephone (land line) 0
    Mobile phone 78.5 This is very high - when do your contracts end? Make a note of that date and then ring up a couple of months ahead and ask about switching to SIM only
    TV Licence 13.29
    Satellite/Cable TV 47 It's often worth haggling on this too - Sky & Virgin are two of the best and easiest companies to haggle with - just ring and tell them they are too expensive...
    Internet services 20
    Groceries 400 You can easily knock £100 off this
    Clothing 50
    Petrol/diesel 160
    Road tax 17.06 If you pay this monthly then bear in mind it's more expensive that way - your surplus allows you to save up for this and pay in a lump sum.
    Car Insurance 42.52 If you pay this monthly then bear in mind it's more expensive that way - your surplus allows you to save up for this and pay in a lump sum.
    Car maintenance (including MOT) 30
    Car Parking 0
    Other travel 0
    Childcare/nursery 0
    Other child related expenses 0 Definitely nothing to add in here?
    Medical (prescriptions, dentists, opticians etc.) 10
    Pet Insurance/Vet bills 16.26 (likely to significantly increase due to a big ongoing claim)Buildings Insurance 13.29
    Contents Insurance 13.29
    Life Assurance 20.58
    Other Insurance 0
    Presents (birthday, christmas etc.) 200 This is a LOT of money going on presents! For context, that's £2400 per year - I think you should be thinking hard about whether this is an overspend.
    Haircuts 35
    Entertainment 250 This is high but does it also cover money set aside for weekends away etc as I notice that you're not budgeting anything for holidays?
    Holiday 0
    Emergency Fund 0 Personally I'd take £50 of that entertainment fund and put it here instead. As a homeowner with a car, a cushion of £1000 in an emergency fund can make the difference between panic, and no panic, when things go wrong.
    Total monthly expenses2142.79
    It's good to know that you do have that £759 surplus - that is often something that people struggle with. One red flag though is the comment about that amount varying if you have "other extras to pay off" - you need to think about that, specifically how often that is the case as that would suggest that there are items currently NOT factored in to that budget. However IMO paying it off a 0% CC when you have interest accruing on another debt is crazy - you have over a year on 0% interest on those, so set both to a DD payment of £100 a month and then ignore them until a year's time, when you need to start looking at getting a balance transfer to another 0% card on each. In the meantime the current surplus plus any savings you can make on the SOA (food, entertainment, and most definitely presents!) should be either paid off the loan as overpayments, OR set aside in an interest paying savings account ready to clear the loan early.
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    • Roses208
    • By Roses208 14th Jan 20, 5:05 PM
    • 4 Posts
    • 1 Thanks
    Roses208
    • #6
    • 14th Jan 20, 5:05 PM
    • #6
    • 14th Jan 20, 5:05 PM
    Thanks for your replies. I will take into account everyone’s suggestions. Realise I missed a couple of direct debits. £22.50 daughters swimming lessons & £25 specsavers contact lenses. Yes we have anywhere between £450-700 pm surplus. The extras to pay as mentioned would be things like, daughters birthday party, something breaks in the house, just any sort of one off costs that life brings. Yes presents allowance is very big and will try and reduce that. The budget covers, birthdays (large family) Xmas, Mother’s Day, Father’s Day, valentines, anniversary etc but def need to look at it. We are also trying to reduce food bill and would like to get it to £70 per week instead of almost £100 so working on that. Entertainment does not include weekends away just days out etc but again we now have annual passes for local wildlife park and aquarium so hoping to reduce that too. We’ve already made massive cut backs in terms of clothing spending and beauty appointments but can see there’s work to be done. No holidays this year, had two last year and realised we need to stop spending. Do have two UK weekends booked and already paid for though. Thanks again ��
    • EssexHebridean
    • By EssexHebridean 15th Jan 20, 11:37 AM
    • 9,896 Posts
    • 50,307 Thanks
    EssexHebridean
    • #7
    • 15th Jan 20, 11:37 AM
    • #7
    • 15th Jan 20, 11:37 AM
    Comments in red below:

    Thanks for your replies. I will take into account everyone’s suggestions. Realise I missed a couple of direct debits. £22.50 daughters swimming lessons Add this under Child expenses.& £25 specsavers contact lenses. Take a look at one of the online contact lens suppliers to see how much you can reduce this - and maybe consider alternating glasses days & lenses days if you're using daily disposables to make each supply last longer. If buying online then look at savings to be made by buying in more bulk, and also go through TopCashBack or Quidco.Yes we have anywhere between £450-700 pm surplus. That's either £5400 a year or £8400 - that's a lot of difference unaccounted for! The extras to pay as mentioned would be things like, daughters birthday party Budget under child expenses and don't be pressured into keeping up with the Jones's on this one - it's easily done!, something breaks in the house This will be catered for by the Emergency Fund that you are going to start saving., just any sort of one off costs that life brings.Maybe have a think through the sort of thing you mean there and then have an honest review of how many of those things were needed, and how many just wanted. Yes presents allowance is very big and will try and reduce that. The budget covers, birthdays (large family) Xmas, Mother’s Day, Father’s Day, valentines, anniversary etc but def need to look at it. Maybe start by knocking off Valentines Day and Anniversary for any sort of significant spend - why not take it in turns to come up with a nice but budget friendly thing to do for the other? Often the best memories are those which cost the least!We are also trying to reduce food bill and would like to get it to £70 per week instead of almost £100 so working on that. Entertainment does not include weekends away just days out etc but again we now have annual passes for local wildlife park and aquarium so hoping to reduce that too. So if that is the case that suggests that you do sometime shave trips away - where are they paid for from? We’ve already made massive cut backs in terms of clothing spending and beauty appointments but can see there’s work to be done. No holidays this year, had two last year and realised we need to stop spending. Do have two UK weekends booked and already paid for though.have you factored in spending money for these? Thanks again ��
    Originally posted by Roses208
    If you do have the surplus that you say you do - even at that £5400 per year level - then that means that you have knocked £5k off that smallest credit card in the last year - is that what has happened? That one is easy to check by looking at your balance at the start of last year and seeing how much it's changed.

    If I were you at this stage I'd be re-working the budget, including all the stuff that is currently left out. I'd also be sitting down and making active plans as a family of where that present spend can be reduced to a more reasonable level, and where savings can be made to release £50 a month from Entertainment to go across to the Emergency Fund. For grocery shopping are you currently meal planning, shopping from a list and cooking things from scratch? That's about the best way of making savings - also look at what is better value bought from places like Lidl or Aldi. Something which can give you a great boost to start with on reducing grocery spending is to do an audit of your cupboards, fridge and freezer then plan the next week's meals as far as possible using up the things that you already have - your aim for next week's shopping is to buy just fresh fruit, veg, and milk - maybe bread too if you don't have any of that in the freezer already. it's a great challenge to see just how little you can spend!
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    • Roses208
    • By Roses208 17th Jan 20, 10:17 AM
    • 4 Posts
    • 1 Thanks
    Roses208
    • #8
    • 17th Jan 20, 10:17 AM
    • #8
    • 17th Jan 20, 10:17 AM
    Thanks for your reply. We haven't really made a dent what so ever in the debt this year. I have only been back at work from maternity leave for 11 months and just haven't had our head in gear. Sort of hand our "lightbulb moment" in December and are making it our 2020 goal to reduce / clear debt. We have on certain months paid up to £700 off the credit cards whilst keeping a £400 food shop bill and £200 on entertainment so the money is definitely there but we always seem to spend it again. (The two Holidays last year etc). We are already looking at ways to reduce food shopping bill and have made a switch from a weekly Gousto order/Asda to Aldi and Lidl and are hoping this shaves some off. Also any pay rises/bonus we receive this year are going straight to the debt. We are going to try to cut down on entertainment. Parents bought us annual passes and we are going to start taking a packed lunch on trips out as most of our money seems to go on eating out. Parents paid for one of the weekends away. We paid for the other (on credit card). No more trips happening this year though. Spending money is put to one side. We're giving ourselves a year of no holidays, no unnecessary clothes shopping (although toddler is at the age of constantly needing new clothes), no nail or beauty appointments, and generally a massive cut on spending whilst still trying to have a life. I think on top of the House, Wedding and Baby we just haven't changed our lifestyles to pay for these things and put it on credit cards. We definitely have some things to consider when it comes to our spending and hoping we can change our ways this year. Feeling very motivated and determined and hoping that doesn't go as i know how easy it is to let things slide
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