Same cycle developing again

A question about : Same cycle developing again

Hello All,

Although my situation is by no means as bad as some on this forum, I would value comments please.

Consolidated CC last year to a larghish loan 12500.00, but have found my credit cards have started building again. They hit 4000.00 so with a nasty nagging feeling I have just cleared them once again with some shares I had. My other loan on my SOA supports a car, but is a personal loan not car finance.

I am posting my SOA. A point or two, in my endowments section I have two policies which mature one 2014 and one 2015 I can't surrender them as I lose a valuable mortgage promise provided by Aviva of about 11000.00. The promise is now guaranteed on one policy and will be guaranteed on the other one in August this year.

Paying just interest at the moment, having just stopped an overpayment of 75.00 a month.

Part of mortgage is fixed at 3.99% part is flexible at 2.49% above base rate.

I am self employed with a variable income and my wife is employed part time, we are both late 40s. My income has been averaged over two years.

Looking at some SOAs on here I seem to be paying over the odds for some items.

Daughter is due to go into further education soon, so will need to fund her.

SOA will appear soon.

I was in horrendous debt in the early 1990s 50 K and negative equity of 40K and have seen how bad it can become in a recession.

Got myself out of that situation and never want to return, hence these little nagging feelings keep coming back.

Thanks

Best answers:

• My business employs some people so the income is net of that, business has started to slow hence starting to worry for them also.
  Statement of Affairs and Personal Balance Sheet
  Household Information
  Number of adults in household........... 3
  Number of children in household......... 1
  Number of cars owned.................... 2
  Monthly Income Details
  Monthly income after tax................ 2350
  Partners monthly income after tax....... 1178
  Benefits................................ 82
  Other income............................ 25
  Total monthly income.................... 3635
  Monthly Expense Details
  Mortgage................................ 407
  Secured/HP loan repayments.............. 0
  Rent.................................... 0
  Management charge (leasehold property).. 0
  Council tax............................. 200
  Electricity............................. 78
  Gas..................................... 108
  Oil..................................... 0
  Water rates............................. 78
  Telephone (land line)................... 38
  Mobile phone............................ 93
  TV Licence.............................. 12.37
  Satellite/Cable TV...................... 60
  Internet Services....................... 0
  Groceries etc. ......................... 500
  Clothing................................ 50
  Petrol/diesel........................... 400
  Road tax................................ 13
  Car Insurance........................... 50
  Car maintenance (including MOT)......... 40
  Car parking............................. 0
  Other travel............................ 0
  Childcare/nursery....................... 0
  Other child related expenses............ 0
  Medical (prescriptions, dentist etc).... 10
  Pet insurance/vet bills................. 23
  Buildings insurance..................... 7
  Contents insurance...................... 7
  Life assurance ......................... 105
  Other insurance......................... 64
  Presents (birthday, christmas etc)...... 25
  Haircuts................................ 0
  Entertainment........................... 150
  Holiday................................. 200
  Emergency fund.......................... 50
  Total monthly expenses.................. 2768.37
  
  Assets
  Cash.................................... 2587
  House value (Gross)..................... 315000
  Shares and bonds........................ 0
  Car(s).................................. 0
  Other assets............................ 38366
  Total Assets............................ 355953
  
  Secured & HP Debts
  Description....................Debt......Monthly.. .APR
  Mortgage...................... 143894...(407)......3.5
  Total secured & HP debts...... 143894....-.........-
  Unsecured Debts
  Description....................Debt......Monthly.. .APR
  Loan...........................12100.....275...... .8.4
  Loan...........................3350......0........ .9.6
  Total unsecured debts..........15450.....275.......-
  
  Monthly Budget Summary
  Total monthly income.................... 3,635
  Expenses (including HP & secured debts). 2,768.37
  Available for debt repayments........... 866.63
  Monthly UNsecured debt repayments....... 275
  Amount left after debt repayments....... 591.63
  Personal Balance Sheet Summary
  Total assets (things you own)........... 355,953
  Total HP & Secured debt................. -143,894
  Total Unsecured debt.................... -15,450
  Net Assets.............................. 196,609
  Created using the SOA calculator Reproduced on Moneysavingexpert with permission, using other browser.
• Have you considered taking scissors to the credit card?
• I'm sure others will be along to get stuck into your SOA but from a quick look at it, you say you should have Ј502 left every month after everything including the debts paid and if this is the case they you wouldn't be needing to run up your credit card every month. If you do have the extra Ј500 then cut the credit cards and throw that money against the loans to get rid of them sooner. If you don't have that then you need to see where it is going.
  Your landline is very expensive, is this correct?
  Can you drop your mobile phone bills down?
  Cutting back on holiday and entertainment for a bit too would free up more money.
  Grocery shopping for 4 people is pretty high too. You could probably cut a few hundred off that
• I don't want to be harsh but discipline is the key on this and it sounds as if , from your own descriptions of your situation , that you're not overly discplined in your approach to this - if the credit cards are the source of your problem there is a really simple solution - cut them up. It also looks as if, from your SOA, that a bit of shopping around and consolidating on your utilities, and significant but not drastic cutting back on some of your day-to-day expenditure (groceries for example), that you could make some major inroads into that.
  But ditch the credit cards!! You know it's the right thing to do. Deep breath, snippety-snip. Job done. Great sigh of relief.
• Statement of Affairs and Personal Balance Sheet
  Household Information
  Number of adults in household........... 3
  Number of children in household......... 1
  Number of cars owned.................... 2
  Monthly Income Details
  Monthly income after tax................ 2350
  Partners monthly income after tax....... 1178
  Benefits................................ 82
  Other income............................ 0
  Total monthly income.................... 3610
  Monthly Expense Details
  Mortgage................................ 407
  Secured/HP loan repayments.............. 0
  Rent.................................... 0
  Management charge (leasehold property).. 0
  Council tax............................. 200
  Electricity............................. 78
  Gas..................................... 108
  Oil..................................... 0
  Water rates............................. 78
  Telephone (land line)................... 38
  Mobile phone............................ 93
  TV Licence.............................. 12.37
  Satellite/Cable TV...................... 60
  Internet Services....................... 0
  Groceries etc. ......................... 500
  Clothing................................ 50
  Petrol/diesel........................... 400
  Road tax................................ 11.25
  Car Insurance........................... 50
  Car maintenance (including MOT)......... 40
  Car parking............................. 0
  Other travel............................ 0
  Childcare/nursery....................... 0
  Other child related expenses............ 0
  Medical (prescriptions, dentist etc).... 10
  Pet insurance/vet bills................. 23
  Buildings insurance..................... 7
  Contents insurance...................... 7
  Life assurance ......................... 86
  Other insurance......................... 18
  Presents (birthday, christmas etc)...... 30
  Haircuts................................ 0
  Entertainment........................... 100
  Holiday................................. 150
  Emergency fund.......................... 40
  Total monthly expenses.................. 2596.62
  
  Assets
  Cash.................................... 2587
  House value (Gross)..................... 315000
  Shares and bonds........................ 0
  Car(s).................................. 8000
  Other assets............................ 34886
  Total Assets............................ 360473
  
  Secured & HP Debts
  Description....................Debt......Monthly.. .APR
  Mortgage...................... 143894...(407)......3.5
  Total secured & HP debts...... 143894....-.........-
  Unsecured Debts
  Description....................Debt......Monthly.. .APR
  Loan...........................12100.....275...... .8.4
  Total unsecured debts..........12100.....275.......-
  
  Monthly Budget Summary
  Total monthly income.................... 3,610
  Expenses (including HP & secured debts). 2,596.62
  Available for debt repayments........... 1,013.38
  Monthly UNsecured debt repayments....... 275
  Amount left after debt repayments....... 738.38
  Personal Balance Sheet Summary
  Total assets (things you own)........... 360,473
  Total HP & Secured debt................. -143,894
  Total Unsecured debt.................... -12,100
  Net Assets.............................. 204,479
  Created using the SOA calculator
  Reproduced on Moneysavingexpert with permission, using other browser.
• I have updated my SOA, I have considered taking some of the funds out of the savings plans to pay off second loan, the values of which are incorporated in the assets section, this saves Ј127.00 a month. I will still pay Ј100.00 a month to build plans up again.
  I am struggling to find cheaper electric gas 4 bed house, mobile phone are mine my Wifes and daughters, shopping at 500 a month has been cut down from about 750.00. Fuel is used in business.
  Holidays are important as we have a lot of illness in the Family with 3 people pretty ill and needing our care, one is in a home but he is dying at the age of 53, and being my Wifes Brother I like to make sure Shes get away from it all.
  Water is high I know but cant seem to find cheaper for that.
• Ј4,000 in how long? What led to this spending? Just some things to think over as you need to work out what is leading you back into bad habits.
  I would agree with those who have suggested cutting up the cards but if you are having to use them as a safety net you should build up an emergency fund first
• Statement of Affairs and Personal Balance Sheet
  Household Information
  Number of adults in household........... 3
  Number of children in household......... 1
  Number of cars owned.................... 2
  Monthly Income Details
  Monthly income after tax................ 2350
  Partners monthly income after tax....... 1178
  Benefits................................ 82
  Other income............................ 0
  Total monthly income.................... 3610
  Monthly Expense Details
  Mortgage................................ 546.4
  Secured/HP loan repayments.............. 0
  Rent.................................... 0
  Management charge (leasehold property).. 0
  Council tax............................. 200
  Electricity............................. 78
  Gas..................................... 108
  Oil..................................... 0
  Water rates............................. 78
  Telephone (land line)................... 38
  Mobile phone............................ 93
  TV Licence.............................. 12.37
  Satellite/Cable TV...................... 60
  Internet Services....................... 0
  Groceries etc. ......................... 500
  Clothing................................ 50
  Petrol/diesel........................... 400
  Road tax................................ 11.25
  Car Insurance........................... 50
  Car maintenance (including MOT)......... 40
  Car parking............................. 0
  Other travel............................ 0
  Childcare/nursery....................... 0
  Other child related expenses............ 0
  Medical (prescriptions, dentist etc).... 10
  Pet insurance/vet bills................. 23
  Buildings insurance..................... 7
  Contents insurance...................... 7
  Life assurance ......................... 160
  Other insurance......................... 18
  Presents (birthday, christmas etc)...... 30
  Haircuts................................ 0
  Entertainment........................... 100
  Holiday................................. 150
  Emergency fund.......................... 150
  Total monthly expenses.................. 2920.02
  
  Assets
  Cash.................................... 2587
  House value (Gross)..................... 315000
  Shares and bonds........................ 0
  Car(s).................................. 8000
  Other assets............................ 34886
  Total Assets............................ 360473
  
  Secured & HP Debts
  Description....................Debt......Monthly.. .APR
  Mortgage...................... 143894...(546.4)....3.5
  Total secured & HP debts...... 143894....-.........-
  Unsecured Debts
  Description....................Debt......Monthly.. .APR
  Loan...........................12100.....275...... .8.4
  Total unsecured debts..........12100.....275.......-
  
  Monthly Budget Summary
  Total monthly income.................... 3,610
  Expenses (including HP & secured debts). 2,920.02
  Available for debt repayments........... 689.98
  Monthly UNsecured debt repayments....... 275
  Amount left after debt repayments....... 414.98
  Personal Balance Sheet Summary
  Total assets (things you own)........... 360,473
  Total HP & Secured debt................. -143,894
  Total Unsecured debt.................... -12,100
  Net Assets.............................. 204,479
  Created using the SOA calculator
  Reproduced on Moneysavingexpert with permission, using other browser.
• Made me think looking at replies. I have added some missed items. The two endowment premiums the savings plan premiums, and all my protection that I pay included in my business.
  I think looking back at the business income, which is net of paying staff accountants etc some months I do not achieve the 2350.00 so then the borrowing starts. But this month I have made about 4000.00 so I have immediatey paid off the OD which was 1500.00, and one staff member was due a small bonus of 300.00 which has been paid.
  I am determined not to get myself into debt again. Those of you who do not run business may not quite understand that costs can get out of hand, but reason for me doing this exercise is so that I can build a buffer fund. Three periods create problems for me tax bill time July January, holidays, and the Christmas period.
  If then you do not make the average of Ј2350.00 then borrowing seems to take place.
• Just my tuppence, I have reduced my grocery bill drastically by buying stores own brands and by looking for special offers and cheaper alternatives. My monthly bill is at most Ј300 and sometimes it's less than this and that is for a family of 5, so it can be done.