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Lizzy D update

Help and discussions for strategies to get out of debt
lizzydripin
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Re: Lizzy D update

#61225

Postby lizzydripin » June 19th, 2017, 8:16 pm

Hi All

I am posting a new SOA for advice please. OH has been made redundant and we are to be down to one wage, luckily I had just had a good wage rise but it sill does not cover expenses as they stand. OH is looking for work and there obviously will be a redundancy payment. We have been told verbally that we can stay in our home and that the rent will be £300.00 now eventually rising to £800.00 ( a similar property would cost about £1000.00 or maybe a bit more but the house does have a few problems which maybe slightly reduces its value on the open market, such as difficult access and drains that need rodding through every other week) but we do not yet know the time scale on this. One of the questions we need to address is the possibility that OH might get a job in a different area meaning we would need to move and I would need to give up my job. It is working out how much OH would need to earn to make this a better option. I would obviously prefer to stay in my job as I enjoy it and would hate to have to look for a new one, I am a bit interview phobic! OH is probably going to need a car and a phone. I have two sons at Uni both doing work at the moment to pay off overdrafts built up during their courses one still has two years to go the other is just finishing and starting a PHD mid July, he is trying to get the £1800.00 OD payed off before he comes home at the end of July. He will also need a car and will be moving home until September when he plans on renting a house with his girlfriend. I realise the phone contracts are high but they are locked in at the moment.
Any advice would be appreciated as always.

Statement of Affairs and Personal Balance Sheet

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................ 1536
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1536

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 150
Electricity............................. 56.66
Gas..................................... 0
Oil..................................... 138
Water rates............................. 0
Telephone (land line)................... 18.45
Mobile phone............................ 77
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 35.5
Groceries etc. ......................... 600
Clothing................................ 0
Petrol/diesel........................... 60
Road tax................................ 12.68
Car Insurance........................... 62.16
Car maintenance (including MOT)......... 40.35
Car parking............................. 0
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 42
Buildings insurance..................... 0
Contents insurance...................... 16.11
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 25
Emergency fund.......................... 0
petfood ................................ 60
lottery................................. 20
Total monthly expenses.................. 1813.91


Assets
Cash.................................... 1400
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 4400

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
(Unnamed debt).................1765.16...28........15.45
Total unsecured debts..........1765.16...28........-


Monthly Budget Summary
Total monthly income.................... 1,536
Expenses (including HP & secured debts). 1,813.91
Available for debt repayments........... -277.91
Monthly UNsecured debt repayments....... 28
Amount short for making debt repayments. -305.91

Personal Balance Sheet Summary
Total assets (things you own)........... 4,400
Total HP & Secured debt................. -0
Total Unsecured debt.................... -1,765.16
Net Assets.............................. 2,634.84

Created using the SOA calculator at http://www.stoozing.com.
Reproduced on The Motley Fool DWD Board with permission, using other browser.

iain123
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Re: Lizzy D update

#61293

Postby iain123 » June 20th, 2017, 8:33 am

Does your car insurance include the kids or is it a Ferrari your insuring? 700 quid per annum seems a lot for a middle aged driver. Other than that and (as you’ve noted) the phones are expensive (recommend SIM only deals from 5GBP per month and a 2nd hand phone - 20GBP from ebay). Our food bills also used to be over 500GBP for a family of 4 when we used to shop at Sainsbury’s but must be nearer half that since Lidl became our main shop. I think the only things you can realistically cut back on are insurance, phones, lottery and food.

Good luck.

(Oh and I wouldn't worry about your kids - let them fend for themselves for a bit. Its one thing for a student to be able to afford to buy a car its another for them to be able to afford the car insurance and rent a flat)

lizzydripin
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Re: Lizzy D update

#61317

Postby lizzydripin » June 20th, 2017, 10:16 am

Hi Iain123,

I am fully with you that we need to get our food spending down, a bit more meal planning and savvy shopping needed. The car insurance covers my son to drive as well, I think he is going to need my car for a few weeks when he gets home from uni as he is moving back in with us for a few weeks and has quite a long way to travel for his phd, As soon as his girlfriend starts her job in September they are moving in together and I will be taking him off the insurance. He will still need to buy a car as they are going to live on the train route for her to get to work so he will need to drive, but he does get a wage for his phd. He is very hard working and is currently working as many hours as possible to pay off his overdraft before moving back home at the end of July. The phones are expensive but at the moment I am locked into contracts apart from mine but that is only £10.00. Will need to get OH a mobile and will then cancel the landline. OH may need a car so not sure yet of the best way to go about this but if he does we should then have more money coming in as it will mean he has found a job.

Many thanks for your comments
Lizzy

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Re: Lizzy D update

#61353

Postby PinkDalek » June 20th, 2017, 12:22 pm

From your other Topics earlier this month (perhaps to aid other readers):

We can stay in the house for a low rent for 12 months then the rent will be reviewed. Presumably this is the £300 rising to £800 pcm.

It has been agreed that he will work 6 more weeks to cover events that are coming up although nothing is included in the current SOA to reflect this, as you are looking to the future. However, I might be wrong but will he not be claiming Jobseeker's Allowance or similar? Some calculators here https://www.gov.uk/benefits-calculators.

That having been said, you mention the OH needing a car and a phone. Presumably there'll be sufficient in the redundancy package to cover this, hopefully with plenty left over to deal with running costs until he gets a new job. How much does he anticipate spending on the car? Are you able to put a figure on the redundancy payment - we got to a statutory redundancy payment of £12,714 on another thread but you said the employers were looking to increase this (what happened)?

Also, from memory, I think the credit cards may have been his but you no longer have any as they were cut up and, as you've shown in the SOA, the last remaining credit card balance of £1,765 is the one for Barclaycard (at 15.45% monthly payment £28 [was £250 pcm?]). Might the receipt of the redundancy payment be the time to pay this off?

I'd probably try and rework the SOA to reflect the redundancy payment under "Other assets" until received, deduct the car from that amount and put the extra car under Car(s), deduct the remaining Barclaycard balance as well (after one or two £28s) from the redundancy. Put something in for the second car for Petrol/diesel, Road tax, Car Insurance and Car maintenance (including MOT). Add Jobseeker's Allowance or similar if available. Reduce your existing "Cash" of £1,400 to, say, £800 to take you to the end of next month.

Then describe it as something like Forecast 1 August 2017, at the top, and see how it looks. What's left of the redundancy payment should give you both an indication of how many months you can go before eating into your remaining cash reserve (and not touching your £1,000 overdraft facilities).

Hope some of that makes sense.

lizzydripin
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Re: Lizzy D update

#61361

Postby lizzydripin » June 20th, 2017, 12:56 pm

Hi PinkDalek,

Thank you for your help, I was not sure how to reflect these things in the soa some of it is still not finalised.

From what I understand I think we have three months rent at £300.00 then it will double to £600.00 and then at 12 months it will rise to £800.00 assuming we are still there, we still have none of this in writing though. It seems now that OH may not have to work after the end of this week. That will probably mean he will then need to hand the car and phone back although he should officially get three months notice so not sure if that means we could insist on keeping it a bit longer, will ask on the other board tonight.

So far I think we can only count on the statuary redundancy payment as you stated and yes I will pay off the remaining CC at that point. Again I think you are right we will need to use some of this to buy a car if OH does not find a job that includes one. In the meantime we will share mine although my son will be needing that too to travel to work. I want to eat into the redundancy as little as possible, but I guess it will depend how long it takes for OH to find employment. I thought you could not get job sealers if you had redundancy money, I didn't get ant and I only had a small amount of redundancy.

I will rework the soa tonight to try and reflect your suggestions, ideally I want to try and live as much as possible on my wage until OH finds another job.

Many thanks
Lizzy

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Re: Lizzy D update

#61370

Postby PinkDalek » June 20th, 2017, 1:22 pm

lizzydripin wrote:... I thought you could not get job sealers if you had redundancy money, I didn't get ant and I only had a small amount of redundancy. ...


Try out the calculators I mentioned but, as far as I aware, there are two types of Job Seekers Allowance.

The first is contribution based, lasts for 6 months, and you need to have paid National insurance Contributions for at least 2 years. Neither household income nor savings are relevant.

The second is income based, can last for more than 6 months, takes into account the income in the household and is reduced depending on the level of savings etc.

If you are in a Universal Credit area see https://www.gov.uk/guidance/jobcentres- ... sal-credit

lizzydripin
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Re: Lizzy D update

#61462

Postby lizzydripin » June 20th, 2017, 8:53 pm

Hi PinkDalek,

I have just started o rework this as you suggest but I am not sure how to go about it. I took a figure of £5000.00 as the price of a car for OH and then allowed one and a half time my petrol costs as he will probably be commuting much further,doubled the car maintenance, tax and insurance. I also added in the redundancy minus the car and Barclaycard. Hopefully we will only be buying a second car though when OH gets a job so not sure how to show that? At the moment I have added in £63.00 per month which I think would be our benefit entitlement, perhaps. Here is what I have done so far, thanks Lizzy:

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1536
Partners monthly income after tax....... 0
Benefits................................ 63
Other income............................ 0
Total monthly income.................... 1599

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 150
Electricity............................. 56.66
Gas..................................... 0
Oil..................................... 138
Water rates............................. 0
Telephone (land line)................... 18.45
Mobile phone............................ 77
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 35.5
Groceries etc. ......................... 600
Clothing................................ 0
Petrol/diesel........................... 150
Road tax................................ 25.36
Car Insurance........................... 100
Car maintenance (including MOT)......... 100
Car parking............................. 0
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 42
Buildings insurance..................... 0
Contents insurance...................... 16.11
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 25
Emergency fund.......................... 0
petfood ................................ 60
lottery................................. 20
Total monthly expenses.................. 2014.08
<b>

Assets</b>
Cash.................................... 1400
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 6014
Total Assets............................ 15414

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
(Unnamed debt).................1765.16...28........15.45
Total unsecured debts..........1765.16...28........-


Monthly Budget Summary
Total monthly income.................... 1,599
Expenses (including HP & secured debts). 2,014.08
Available for debt repayments........... -415.08
Monthly UNsecured debt repayments....... 28
Amount short for making debt repayments. -443.08

Personal Balance Sheet Summary
Total assets (things you own)........... 15,414
Total HP & Secured debt................. -0
Total Unsecured debt.................... -1,765.16
Net Assets.............................. 13,648.84

Created using the SOA calculator at www.stoozing.com.
Reproduced on The Motley Fool DWD Board with permission, using other browser.

Clitheroekid
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Re: Lizzy D update

#61499

Postby Clitheroekid » June 21st, 2017, 1:03 am

Just a thought - has your husband considered self-employment?

I don't know what sort of work he's been doing, but I got the impression from the other thread that it might be some form of maintenance work for a local estate. If so, they may be willing to offer him some work on a regular basis, which would provide a foundation for him to obtain other work locally. Also, if he is able to turn his hand to general maintenance work there is always high demand for reliable handymen who are willing to do relatively small jobs.

From a glance at your financial situation it looks as though he wouldn't have to earn a great deal for you to have a reasonable surplus each month.

He would also be eligible for a limited amount of financial and practical assistance from the New Enterprise Allowance to help him through the initial stages - https://www.gov.uk/new-enterprise-allowance

I made the move into self-employment having been made redundant 26 years ago, and although I'd never had any intention of running my own business at the time and I was pretty nervous about doing so it was by far the best move I ever made.

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Re: Lizzy D update

#61506

Postby moorfield » June 21st, 2017, 6:34 am

lizzydripin wrote:Any advice would be appreciated as always.

lottery................................. 20


Hi Lizzy D

Why don't you drop this and reallocate to your "Entertainment" line instead?

Please don't fall for the "it could be you" nonsense that the Lottery spouts - the odds of winning big are (IIRC) some 1 in 45m, and 1 in 140m for Lotto and Euromillions - spend it on enjoying yourself instead!

M

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Re: Lizzy D update

#61630

Postby moorfield » June 21st, 2017, 2:06 pm

lizzydripin wrote:Any advice would be appreciated as always.

Electricity............................. 56.66
Oil..................................... 138

Telephone (land line)................... 18.45
Internet Services....................... 35.5

Car Insurance........................... 62.16
Pet insurance/vet bills................. 42
Contents insurance...................... 16.11


Hi Lizzy D

Another thought occurred, which I've just done recently. With some homework and shopping around you may be able to consolidate each set of bills above onto a single provider + direct debit at a discount. It's a pity you're locked into the mobile phone expense as you say, there is scope to reduce that enormously - worth speaking to your provider?

M

lizzydripin
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Re: Lizzy D update

#61720

Postby lizzydripin » June 21st, 2017, 7:23 pm

HI Clitheroekid,
Self employment is something we had talked about, I had suggested OH did some consultancy work I think he wasn't sure about the idea but someone has offered him a bit of consultancy work so if that comes off it should help and he may decide it is something he can do more of. He also has a job interview tomorrow a bit of a different roll to the one he has been use to.

Hi Moorfield, It is true I know the lottery is a complete waste of money but it is so hard to give up when you have done the same numbers for years, I am paranoid that the day I give it up will be the day the numbers come up and you also have to give up the dream :(

Regarding the providers of services, my car and contents is the same provider, I might look at the pet insurance to see if there are some better deals. Our internet is satellite , cable broadband here is awful, I am not sure who else does this, I could reduce the package but apparently this will then lock us in for another 12 months with a £200 penalty if we leave before and we may yet still have to move house. I am happy to give up the land line only OH put it on a couple of applications so can't do it quite yet. I am not sure of any providers that combine oil and electricity, are there any?

We have another couple of problems now: My car is playing up and needs to go to the garage asap and OH has to hand his back in Friday, not sure how we are going to get our son back yet from uni next week it is a 2 1/2 to 3 hour journey and my car is only little, not even sure how we will get his bike in :P

Thank you both for your help
Lizzy D

lizzydripin
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Re: Lizzy D update

#62014

Postby lizzydripin » June 22nd, 2017, 6:10 pm

Hi everyone

OH has got a job :)

He starts towards the end of next moth so we just need to sort out a reliable car for motorway driving, he gets a £4500,00 allowance per annum towards this suggestions welcome :)

Will post soa as soon as I have the details

Thank you for all your help and support :)

Lizzy D

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Re: Lizzy D update

#62027

Postby staffordian » June 22nd, 2017, 6:46 pm

lizzydripin wrote:Hi everyone

OH has got a job :)

He starts towards the end of next moth so we just need to sort out a reliable car for motorway driving, he gets a £4500,00 allowance per annum towards this suggestions welcome :)

Will post soa as soon as I have the details

Thank you for all your help and support :)

Lizzy D


Great news. It must be a weight off your mind.

As far as the car is concerned, one option might be a lease / PCP type deal if the £4500pa is specifically for a vehicle.

I've never had one and am certainly not recommending it, just raising it as a possibility. Others with experience of these things wil hopefully comment further.

Staffordian

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Re: Lizzy D update

#62044

Postby PinkDalek » June 22nd, 2017, 7:53 pm

lizzydripin wrote:Hi everyone

OH has got a job :)


Yes, excellent news. From what you are saying you won't have to leave your job, which is another bonus, and you keep the property.

He starts towards the end of next moth so we just need to sort out a reliable car for motorway driving, he gets a £4500,00 allowance per annum towards this suggestions welcome :)


I'm sure the folks over at Cars, Driving, Motorbikes and Trains viewforum.php?f=58 could add to what staffordian has already said. It seems to be fairly active over there.

Will post soa as soon as I have the details


Sounds like the new SOA will look promising. I suppose you could always do two of them. One with his salary and the rent at £300 and another with the rent at £800. Either way, things do look like they are on the up. Sometime redundancies are a blessing in disguise.

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Re: Lizzy D update

#62049

Postby moorfield » June 22nd, 2017, 8:15 pm

Great news and good luck. :)

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Re: Lizzy D update

#62051

Postby lizzydripin » June 22nd, 2017, 8:34 pm

Thank you everyone, all feeling much happier here tonight.

Oh has to go in tomorrow to hand over so hopefully everything will be finalised then regarding rent etc.

Looks like we might have a few difficult days as my car is going to the garage tomorrow and not sure if it will be staying or coming home and OH will have to give his back tomorrow. Now we know that his job is not coming with a car though we will prioritise getting something for OH.

He has been told the job comes with a £4500 car allowance but I am not really sure what that means in real terms, does anyone know what this actually means?

The job will entail some motorway traveling so he needs to get something reliable

Will try and work out a new soa but will wait until tomorrow incase we know more about the rent situation by then

Any thoughts on cars in the meantime would be appreciated, I have just been looking at Toyota Auris??

Many thanks
Lizzy

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Re: Lizzy D update

#62055

Postby staffordian » June 22nd, 2017, 8:48 pm

lizzydripin wrote:Any thoughts on cars in the meantime would be appreciated, I have just been looking at Toyota Auris??

Many thanks
Lizzy

Anything by Honda or Toyota tends to be pretty bulletproof.

I'd have said the same about Nissan once but their tie-in with Renault seems to have affected the reliability of at least some of their models.

Kia are worth considering as they have a seven year warranty, but check first that it still applies (ie serviced when required etc)

Staffordian

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Re: Lizzy D update

#62058

Postby vrdiver » June 22nd, 2017, 8:51 pm

staffordian wrote:
lizzydripin wrote:Hi everyone

OH has got a job :)

He starts towards the end of next moth so we just need to sort out a reliable car for motorway driving, he gets a £4500,00 allowance per annum towards this suggestions welcome :)

Will post soa as soon as I have the details

Thank you for all your help and support :)

Lizzy D


Great news. It must be a weight off your mind.

As far as the car is concerned, one option might be a lease / PCP type deal if the £4500pa is specifically for a vehicle.

I've never had one and am certainly not recommending it, just raising it as a possibility. Others with experience of these things wil hopefully comment further.

Staffordian


Excellent news :D

Two comments re the car: I assume the job has a trial period, so I wouldn't sign a PCP deal unless you can pay it off without his income ('cos he will be on the hook for a - typically - 3 year contract regardless of employment status). Also, PCPs can be good and bad, like any financial product, and typically they are aimed at people who want to drive cars 0 - 3 years old. If he is not so fussed, buying a 12 -18 month old car with his redundancy money, and then saving the £4500pa (less tax at his marginal rate, less NI, so maybe £200 - £250 pcm?) towards a replacement might be a reasonable option? I got myself into the position of not owing on the car asap, as it meant job loss was less of a threat. The downside was that I didn't drive a new car, but to be honest, after a few months, a new car isn't new any more.

The second comment: the VW Cheat Device scandal has lowered the cost of VW diesels (that needed the fix) but there are quite a few owners who've had the fix only to report problems afterwards, so if it was me, I'd steer clear of VW (and the other VW brands, so avoid VW, Audi, SEAT and ŠKODA diesels). Probably nothing wrong, but you'd hate to buy a lemon and get caught up in an ongoing litigation case with VW...

Good luck and keep us posted!

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Re: Lizzy D update

#62061

Postby lizzydripin » June 22nd, 2017, 8:59 pm

Hi vrdriver

I am totally anti pcps and we have never owned a new car so unlikely to go down that route :)

OH was actually looking at the VW golf diesel so will pass on what your thoughts on that

Many thanks
Lizzy

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Re: Lizzy D update

#62068

Postby vrdiver » June 22nd, 2017, 9:12 pm

Just saw your query re car allowance.

Essentially it is a line item on his payslip (£4,500 / 12 = £375pcm gross) which will be taxed at his marginal rate (20 or 40% and have NI deducted if applicable (12% up to £866 per week, 2% if over that), so typically he'll lose 32% of the car allowance to income tax and National Insurance, i.e. he'll receive £255 per month for which he will be expected to have a car, insured for business use, and in the event of a car breakdown, expected to sort out a replacement pronto. He'll also be able to claim for business mileage, typically 45p/mile for the first 10,000 miles per tax year, then 25p/mile thereafter (but check with HR for company policies). That money will be expected to cover fuel and the increased cost of both depreciation and servicing due to company usage. HR may have further constraints on what kind of car, or the age of car that is suitable (my previous employer objected to coupes and motorbikes for example, a friend's current employer dislikes cars over 10 years old, but most won't specify, just check the contract!)

It's kept as a line item partly to remind employees that they have an obligation, not just a pay perk, but also because it does not accrue pension or redundancy benefits.

So, in summary, your husband gets some cash in return for which he has agreed to provide a car fit for work purposes.


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