Please Help Me Get Some Perspective on Our Money Situation

[OkyDoke]

Hello! First time poster in this part of mumsnet, so I felt a hello was appropriate. This might be a bit long.

I need to get some perspective on our situation in regards to our money.

I earn between £1200-£1300 per month, £700 of which is allocated for bills food, mortgage etc. This obviously leaves £500 or so left over, £100 for phone bill, contacts etc. I am in my overdraft by approx. £600.

My partner earns £1300 per month, £600 of which is allocated to bills, mortgage etc. He pays £200 into a savings scheme with work, and £250 on a car loan, which obviously doesn't leave him with much left, about £250. Also in overdraft by £500.

We pay the respective £600 and £700 into a joint account where we are not in overdraft.

We have a credit card of approx. £1800 and owe his parents £2000.

In November we will be getting a large sum of money from the saving scheme, which will vary between £7000 to £15000 depending on the shares. We will pay off credit card and his parents then.

We have also recently got engaged and will get married next August.

My head is just full and I need some perspective on what to concentrate on. I want to start paying off overdraft on my account and start saving for the wedding. Does that sound sensible?

Thanks in advance!

Only a suggestion but could you reduce your overdraft by £100 a month & ring bank each time to reduce your limit?
What is the £1300 in joint account to pay for? If your bills etc are already covered?

My overdraft is actually £1400, so maybe reducing it is a good idea!

The £1300 is to cover the joint expenses such as the mortgage, food, bills etc. :)

Did you mean August 14 or 15? If it's August 2015 I'd be tempted to use Novembers windfall to pay for the wedding.

If you save to pay debts off it changes your mindset so you don't accrue more debts, babies usually follow weddings and you don't want to get into more debt when you have dependants who rely on you.

Money saving expert usually advise NOT to pay into savings accounts while you have debts to pay off, the reasoning behind this is that debt has an interest rate much higher than savings so it makes sense to pay debt and not save for a while.

I'd dig out all the statements for the cc and o/d and write up a chart of each debt and interest rates on it. Pay the one with the highest interest first, then the next and so on until you are debt free.

If you want to put extra money into it I'd go through the bills for the house and see which ones you can realistically cut eg

Sky/virgin etc TV packages (or though losing them completely works for some people)

Broadband packages, phoning to cancel can prompt them into offering you a big discount and you don't know unless you try.

Mobile phones, do you use all the minutes, texts & data they provide? could they reduce the package and price accordingly? if you are near the end of the contract could you go PAYG and use apps like Whatsapp to message people?.

Landline, some companies charge less if you pay upfront for a year. It can be a £5 a month less for doing this. If you use the landline for calls could you use saynoto0870.co.uk to ring premium numbers for less? or free from mobiles?.

Dual fuel, if you don't have any exit fees can you switch providers and save money? do you practice any of the energy saving tips to save cash?.

Council tax, you can pay this over 12 months now. It doesn't save money but it reduces the monthly outgoings a bit eg ours is £20 a month less paying it this way so it's easier to "find" each month.

Mortgage, if you aren't fixed rate can you change providers for a better deal? you don't always have to change providers, a phone call to the mortgage company could save you money.

Water bills, if you are on a meter only using less can help this one. If you are rateable value some companies will let you go metered and switch back in under 12 months if it isn't cheaper for you.

TV Licence, compulsory for a live signal but if you don't have sky etc and can just use catchup like iplayer or 4OD you can get rid of it as long as you let them know. I got rid of ours last year.

After bills it's random spending and food bills that cost, meal planning & not buying branded foods slashes bills.

www.mumsnet.com/Talk/credit_crunch/1628874-Gas-Elec-Bills-monthly-and-SKY-so-angry

www.mumsnet.com/Talk/credit_crunch/1543785-your-top-tips-for-money-saving-and-a-more-frugal-life

www.mumsnet.com/Talk/credit_crunch/1600030-Small-money-saving-habits-petty-even

These threads are good.

Blogs like a girl called jack or mortgage free in three are good as well.

Have you tried Money Saving Expert Budget Brain? You can put in all your expenditure including one off items, such as Christmas presents, and gives you a monthly total. I think this would be useful as on first glance it seems like you have a decent disposable income but you're in your overdraft? Is the overdraft interest free? Work out the reasons why, if the budget calculator says you earn more than you spend, where is the money going?

Also, bear in mind that with rates as they are at the moment it's madness to save when you have debt. I accept the sharesave scheme may prove to be an exception.

wow fluffy types fast and gives good advice

I'd draw up a proper budget first of all and then see what you are left with .. Remember to budget for all your annual expenses too. Then decide which order to repay debt and throw every spare penny at repayments. Once debt had gone start saving...pop over to Money Matters and the Debt Support thread #3 for more ideas

priorities - clear the debts and build up a cushion of six months of expenses. Also work out why you got into debt, look at your spending and work out where you can improve.

a wedding costs about £100. If you want a big party (not the same thing) that's fine, but sort your lives out first and do NOT go into debt again for this or anything else.

All overdrafts and the credit cards are interest free at the moment (left over from student days and we haven't had the credit card for two years yet) so that's one positive.

I can't control what he does with his overdraft, but I need to control mine better and paying that off and paying more on the credit card is going to be my priority. I am going to look for a good budget planner which I can use for my own account and our joint one and see if there are any thingswe can save from.

The reason we got in debt was we moved and got a mortgage at least six months earlier than we were planning as our house was on for £145,000 and it had been on the market for a while so the builders dropped price to £128000 to get rid. I don't regret it, but we need to sort out sooner than November, as although my partner thinks it will solve everything, I'd rather get them solved sooner!

Thanks everyone for your help.

hi, fill this in, the both of you, may give you a clearer picture? :)

www.stoozing.com/calculator/soa.php