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Original poster

Can anyone who knows about money help me? I have no idea what to do next.

21 replies

bytheMoonlight · 01/06/2011 09:18

This is a statement of affairs:

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 687.68
Partners monthly income after tax....... 1453.76
Benefits................................ 172
Other income............................ 0
Total monthly income.................... 2313.44

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 170000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 170500
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 160000...(760)......5.75
Total secured & HP debts...... 160000....-......

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
DMP............................26000.....200.......0
CSA arrears ...................200.......50........0[b]
Total unsecured debts..........26200.....250.......

Monthly Budget Summary[/b]
Total monthly income.................... 2,313.44
Expenses (including HP & secured debts). 2,068
Available for debt repayments........... 245.44
Monthly UNsecured debt repayments....... 250
Amount short for making debt repayments. -4.56

[b]Personal Balance Sheet Summary
Total assets (things you own)........... 170,500
Total HP & Secured debt................. -160,000
Total Unsecured debt.................... -26,200
Net Assets.............................. -15,700

As you can see, it's a mess.

I cannot see a way out.

I am happy to sell. I would release about £6k in equity after selling fees. But renting even a 2 bedroom flat around here would cost £700 a month, so only a saving of £60 a month. And would we have difficulty renting with our credit rating?

What on earth can we do?

OP posts:

expatinscotland · 01/06/2011 09:24

If you're on a DMP the money advisers you worked with should have gone over this with you, no?

We are on a debt arrangement scheme (it's for scotland only, though), but our debts only total £12,000 and we have no assets. Our money adviser went through everything with a fine-toothed comb.

Could you sell up and buy something smaller? I don't know, I've never owned a home in the UK so don't know how it works, tbh.

Original poster

bytheMoonlight · 01/06/2011 09:32

We cannot afford the £200 the dmp requires in order to pay the debt off in 6 years.

Couldn't buy anything else as we couldn't afford the deposit or even get a mortgage. Our mortgage atm is IO.

OP posts:

ditavonteesed · 01/06/2011 09:35

right this was my job until I was m ade redundent last year, some ofthe basic rules may have changed slightly, if it is ok with you I am going to go through your budget (the flexible bits) and make cuts as you would be recommended by a debt counsellor. you are only actually a very small amount short of your actual debt repayments so it will be easy to find and perhaps free up a bit extra as well.

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Expense Details[/b]
Mortgage................................ 760
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 133
Electricity............................. 69 - seems high, any reason, have you shopped around?
Gas..................................... 33
Oil..................................... 0
Water rates............................. 17
Telephone (land line)................... 0
Mobile phone............................ 70 - seems very high,how many phones, can you switch to pay and go and just have one contract?
TV Licence.............................. 10
Satellite/Cable TV...................... 60 - you will be allowed to cut back to a more basic package, I currently get tv, broadband, pohone and phone,line for £45
Internet Services....................... 0
Groceries etc. ......................... 400 - definatly room to cut down, try to aim at £70 per week, do big shops. this would make it £280 on a four week month and £350 in a five week month.
Clothing................................ 50 - you shouldnt be spending money on clothing every month, charity shops, supermarkets are much cheaper.
Petrol/diesel........................... 50
Road tax................................ 20
Car Insurance........................... 33
Car maintenance (including MOT)......... 10 - does this add up to enough to pay for the mot over a year, otherwise you could be caught short, are you actually leaving it in the account so it is there when you need it.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 10 - what is this for, seems not enough to pay for a day out so pointless being there.
Medical (prescriptions, dentist etc).... 20 - every month, is this for essential medication, can you look into schemes where you pay a monthly fee or is this already the case.
Pet insurance/vet bills................. 0
Buildings insurance..................... 13
Contents insurance...................... 14
Life assurance ......................... 14
Other insurance......................... 25 - what insurances????
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 10
(Unnamed monthly expense)............... 0
csa..................................... 187
Total monthly expenses.................. 2068
[b]
have a look through and see what you can get down, we ahave definatly already found the £5, sorry the advice is a bit quick, I used to spend hhours on the phone with people, I will come back and discuss with you when you have had a look through.

mollymole · 01/06/2011 09:38

can you cut to cheaper mobile phone deals - £10.00 a month each will buy you loads of time and texts
cancel the satelite tv until times are better - these two cuts would save
£110 a month
can you re-negotiate your unsecured loan repayments down to a more managable amount -
any chance of getting rid of the car and using public transport - or a moped
for going to work
you are paying £200 of CSA arrears at £50 a month so that will be paid soon and will release you another £50 a month
it does not appear to be practical to move house as you have so little equity in your property and may not be able to get back on the property ladder with the huge deposits they ask for these days
hope things look better soon for you

expatinscotland · 01/06/2011 09:50

Hmm. We are on keyed meter after once having a huge catch-up bill, so yeah, our energy bills are that high and there's no room to cut them.

Also, if you're in a rural area, food bills are often high like that without a lot of margin because of lack of shops and/or high transport costs to get to more competitively-priced shops.

We have PAYG mobiles, but yours might be on a contract just now that you can't get out of. Contact the company, they might be able to get you to lower rate one for now.

Ditto the satellite (we don't have anything but basic Freeview).

Our plan means the creditor must agree to freeze all interest, fees, debt collection and court action for the duration of the scheme. They also cannot contact us anymore regarding it. But again, our situation is different in that we literally have no assets and are low earners. There's nothing else for them to take so they readily agreed to this or otherwise it will be sequestration for us and they'd get nothing.

Original poster

bytheMoonlight · 01/06/2011 09:53

Really appreciate the help

ok, point by point:

Electricity bill is so high as we owed arrers, quaterly statement is due at the end of the month and I think all arrears should have been paid so should reduce it.

£70 mobile phones is for two mobiles, we are tied into contracts which cannot be reduced till August when dh is going to have my old phone on a PAYG sim so that should be reduced quite a bit.

£70 pays for braodband, TV package and phoneline - I will phone and see what is the lowest price I can get though.

Food costs so high, we live in South East and with all of us eating breakfast lunch (packed lunch for dh) and dinner at home 7 nights a week I don't think I could bring it under £90 a week. I shop at Lidl and Tesco and buy own brands, cook from scratch, only buy 2 pieces of meat a week (a chicken and a packet of mince). This includes dog food, piriton for my excema, a tub of E45 a week for my excema (£6.50)

Other insurances are the emergency insurance we had to take out when the washing machine broke and we couldn't afford any other way to get it fixed, that's £15 a month for a year, and the other £10 protects the tumble dryer and cooker as we couldn't afford to replace them or get them fixed.

I could get my prescriptions cheaper but this means paying out in a lump sum - which we cannot afford. I need two different types of inhaler and a steriod cream for my excema. Each prescription is £7.20.

Does this help?

OP posts:

triskaidekaphile · 01/06/2011 12:58

Is there any chance of increasing the money coming in a bit as well as/ instead of cutting back? Your salary sounds quite low- are you part time? Could you do some more hours or go full time if so? Or is there any casual work about you or your partner could do temporarily? A couple of pub shifts? Babysitting? Sympathies, btw. It is bloody hard making ends meet.

Mabelface · 01/06/2011 13:10

£70 for broadband, tv and phone is loads. Get a freeview box, look at plusnet or similar for broadband and phone together. You can bring that down enormously.

Giffgaff do a good PAYG tariff for £10 a month - 250 minutes, unlimited texts and internet.

Tesco are expensive. We spend around £100-120 a week for 6 people - 3 adults and 3 almost teens. and do the bulk of our shopping at Aldi.

whydobirdssuddenlyappear · 01/06/2011 13:21

What might help you reduce food costs is to do a monthly meal planner, and cost out each meal. I did this - reduced our monthly food outgoings from over 400 to nearer 250. That's for 4 people (2 adults, 2 children) living in London, all eating 3 meals here, or 2 meals and a packed lunch, 7 days a week. Plus DH and I eat an additional meal in the evening when the dcs are in bed.

If you're buying a chicken a week, what are you doing with it? If you joint it (take off the breasts, the thighs and the drumsticks) you can turn the carcass into soup, and make at least another 2 meals out of the remaining meat, if you bulk out with beans/lentils etc. Lentils will also make mince meals go much further, and they're very cheap. Vegetarian food is very very much cheaper than meat-based meals. One of our favourites is bean quesadillas, which cost about 2 quid to feed all 4 of us, and are really filling. Can pm you some of my cheaper recipes if you'd like.

Baking bread can really reduce costs too, and, although the actual rising process is time-consuming, you can be doing other stuff whilst it's going. It can be left for hours on its own if necessary.

whydobirdssuddenlyappear · 01/06/2011 13:23

Also, can you feed the dogs any more cheaply? If you have a local butcher, they might do cheap pet mince or similar.

whydobirdssuddenlyappear · 01/06/2011 13:30

Another thing. Would it be possible for you to fix your mortgage at a lower rate, or to extend the term at all?

Caz10 · 01/06/2011 13:31

Re prescription charges I read on here before that the lump sum thingy can be paid up in installments if that helps?

RockinSockBunnies · 01/06/2011 13:36

With the E45, I get it on prescription and ask for the largest tub available. It lasts months and costs far less than it would to buy it at a chemist.

Honeydragon · 01/06/2011 13:41

First of all can you explain why you need £200 per month to maintain a dmp ... this is complete bollocks and some one is having you on.

If rent is that much you must make the mortgage and maintaining the property if you can your priority.

Isthe mortghage your only debt?

expatinscotland · 01/06/2011 14:16

'Another thing. Would it be possible for you to fix your mortgage at a lower rate, or to extend the term at all?'

They're on an interest-only mortgage.

whydobirdssuddenlyappear · 01/06/2011 14:43

Ah. Missed that bit. Does that mean you can't extend the term though?

RockChick1984 · 01/06/2011 17:02

The interest is the same whatever term the mortgage is on, so wouldn't make a difference to payments. WRT cuttng bills down, I agree with the above points completely. One other thing we have done is got rid of the phone line completely (always just used mobiles anyway, only had it for the internet) and got a dongle for going online - its about £15 a month but can get it cheaper we just didn't want to be tied into a contract, so that could cut your bill there down by £55! If you are struggling to make ends meet sky tv really isn't an essential, especially now with freeview. Also agree £50 a month clothes isn't a necessity, treats like that can be gradually introduced again as you repay your debts, see them as a reward for what you have achieved.

expatinscotland · 01/06/2011 17:11

What you could do, too, as far as clothes go is put money aside every month, say £25/month or so (we put £30, £10 for each child) in the event that all three outgrow their shoes at once or you get a big bill in (like school uniform time).

We go without contract mobiles, Sky or haircuts (excepting DH's which is £5 every six week) so we can instead save money for events like Xmas and birthdays.

Why is my TV license £12/month but yours is 10? I thought it was a standard thing?

If you're in a city it's possible to cut the food budget down.

Again, we opted for a plan which will mean it will take longer to pay off our debts but the payment each month is far more manageable. Also, the interest must be frozen, no more fees tacked on, no more action on the debt. So for us, it was the best option as we rent from an HA and won't ever have a mortgage.

whydobirdssuddenlyappear · 01/06/2011 17:16

Ohh, right (lightbulb moment).

8rubberduckies · 01/06/2011 17:35

Hi - money is obviously very tight for you, and I think you should look at reducing your DMP payments. Are you paying through the nose for the service with one of the companies that advertises on the TV / papers? If so, you may find that not much of your £200 a month is actually going towards the debts.

There are a couple of charities that offer Debt Management Plans - I don't work for them, but I am an independent debt adviser for a charity. They are funded by the credit industry and all of the money you pay will go towards your debts. As they are not-for-profit it is also not in their best interests to squeeze a massive payment from your budget every month, but rather to set a realistic and sustainable figure you can keep up with without having to resort to selling your home to pay. The two biggest ones are Payplan and CCCS.

Also, insurance on individual items is a complete waste of money - if you get a decent home insurance policy tihs will cover emergencies, and put the rest in a savings account - you will soon have enough saved to pay for a cheap oven / washing machine if you need to replace them and are not covered by your main insurance. I would also reduce the TV / phone package, get E45 and Piriton on prescription, and bulk buy your prescriptions monthly on paayday - you will save a fortune.

brightermornings · 01/06/2011 19:16

Hi I've just signed up for a yearly prescription card. It's £10.40 a month. I did it online and it's effective from the day I signed up.

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