Time to be honest with myself!

InkAndDrink303 · 27 April 2016 at 3:36PM

Good Afternoon,

I'm looking for a little advice, and motivation here I suppose?

I need some serious help with debt, and how to manage them and I'm hoping people here may be able to assist me a little bit?

I'm 31, and last year had to move back into my parent's home following the end of my tenancy on a property I shared with a friend. Prior to that I had been in two long relationships (11 years total) which were full of frivolous spending, and free living. No concern over money or credit, or any real responsibilities.

After moving back in my parents in the first quarter of last year I had been living to my limits pretty much, with no want to meet anyone or any expectation. Towards the end of last year I met a girl who has changed my life somewhat and I can honestly say that in my years of relationships I've never felt this way about someone. It's an amazing thing to meet someone who makes me feel this way, all be it she's younger than me (23) and moved back home due to a relationship break-up so we are in a similar situation. The thing I find that has spurned me to really look at my finances is the mention of looking at renting together. I know that giving the state of my finances now I would struggle - and I am kicking myself for financially acting so stupidly!

My girlfriend know's nothing of my financial situation, and she (as far as I know) has no credit cards etc so pays very little out. I cant find it in my heart to actually let her in on my situation at the moment, or certainly the full amount just yet but I am worried at some point I will find myself cornered and will have to explain because I wont be able to book a holiday on the spur of the moment or actually look at renting when something comes up.

Help!

So, my debt laid out as below - and please ask me for more details because I will happily share, but as this is pretty much my first post here I dont know what you guys need! My plan (self-formulated!) is to attack the small ones first, get those out of the way before laying into the bigger ones.

(I earn fairly decent money - and have considered a DMP however I feel that a) by doing this I am admitting failure and can't control my money - perhaps that's apparent anyway? and b) I need to have some disposable income to actually build a life with my girlfriend and attempt to get out of my parents house).

Thank's for reading, and have a great day!

Creditor Balance
Capital One (Credit Card) 1490.17 < I pay just over minimum on this at the moment at £70 per month
BarclayCard (Credit Card) 2471.59 < I pay just over minbimum on this at £70 as well
Next (Catalogue) 478.35 < I pay £30 a month to this
Burtons (Store Card) 192.02 < I pay £30 a month to this
Halifax (Overdraft) 550.00 < Left over from an old joint account (with an ex) that I no pay anything into bar £35 to cover the charges for this OD.
Outfit (Credit Card) 191.32 < I'm now paying £50 a month to this
Lloyds (Overdraft) 3,900.00 < I don't pay anything towards this at the moment as it's the second largest behind the loan, and costs me around £65 a month in charges.
Lloyds (Loan) 4,650.00 < Was a consolidation loan of an overdraft (that I stupidly ran up again, and am paying £150 a month against this.

My take-home is £1700 per month, I pay my parents £275 for rent, try not to spend over £120 at most on food per month - this also means if I go out to eat with my girlfriend that also comes from that money - and I also pay around £85 on a combination of O2 & Vodafone contracts for an iPhone and iPad which I am unable to reduce.

I look through this forum and realise my situation is nowhere near as bad as some people's and I guess people will say this after reading my post but each to their own.

Thanks again for taking the time to read this, and your thoughts and advice are apprecaited.

andyfromotley · 27 April 2016 at 4:20PM

Hi ink and drink,

welcome. OK your debts total about £14,000. your outgouing total just about £1000 this leaves £700 for debt repayment each month. With this money you will soon smash this debt. Using the snowball method, paying off the highest interest rate first will supercharge this and you will be able to smash this debt in under 18 months.

If you can increase your income by way of a promotion, extra hours or a second job a couple of nights a week then you can slay this debt in UNDER a year. So your situation isnt that terrible, with effort and determination you will be out of this in no time at all.

As for your girlfriend, once you have a plan just sit down and explain this all to her including your plan. Explain that meeting her has really made you want to sort this all out. You have done nothing to be ashamed of. Money secrets are terrible and destroy relationships so if she takes all of this on board and is suportive you will have a great base for your relationship.

Oh do not be tempted to move out of your mum and dads until this is sorted. As great as that sounds you are in the perfect place to become debt free, if you do it will be a struggle.

Good luck, stick around these boards for motivation it really does become a habit.

InkAndDrink303 · 27 April 2016 at 4:28PM

Thanks for the advice Andy!

I need to get together all the interest rates and figure out which is the highest in this case. Would you recommend paying off the highest interest first over paying the smallest debt?

Thanks again

andyfromotley · 27 April 2016 at 4:35PM

Its an age old question that one.

Highest interest rate is the best mathmatically but some people feel paying the smallest works better as you see real progress.

In your case i would go by interest rate as you have some very expensive looking debts there (such as your small overdraft!!)

But the important thing is to pay them off!! Neither method is terrible but just PAY THEM DOWN each and every month.Honestly once you get into this you will see real progress quickly. Get to it.

andyfromotley · 27 April 2016 at 4:37PM

http://www.whatsthecost.com/snowball.aspx

use this snowball calculator - it will help you with the best order and tell you when you will be debt free - whoop.

horseygirl2014 · 27 April 2016 at 4:46PM

Hi Ink and Drink

First off, well done for tackling the problem! Like you say, its not as bad as it could be, but the quicker you chip away at the debt, the better off you will be.

Def put your girlfriend in the picture, and let her know why renting isn't a good idea at the moment. It will make it much harder to get rid of the debt.

As Andy says, after all outgoings, you've got 700.00 to dint away at these debts. I know you want some spending money for your girlfriend, but wait a bit longer, debt free is more important.

You say you want to get rid of the small ones first. But look at the ones which cost you the most in interest. That said, getting rid of ANY will put you in a better position

Take Outfit credit card for example. 191.32 - Pay this off, you still have 500.00 to pay off another chunk of a debt in month one, and next month, not only do you have one less thing to think about, you also automatically have 50.00 extra to pay off another bill, because it is not going on Outfit credit card.

Also, have you talked to the bank to see if you can do anything about your bank charges??
Which ever way you do it, good luck!

adindas · 27 April 2016 at 4:53PM

InkAndDrink303
You have a very good attitude in acknowledging your past. I have not seen a lot of people in this site like you. Majority of people here are just looking for a scapegoat for the mistake they have made by themselves in the past.

Most of them are just looking advice on debt avoidance and /or how to con the bank using various excuses, playing poor game, playing human right game (e.g not eating, etc).

Your income is not too bad. What you need here is to put your expenditure in order. Cut all of the unnecessary thing. A lot people here in the UK could live with much less than your income. Though do not have any debt.
You could definitely clear your debt by cutting all of unnecessary expenditure.
In order to reduce the interest you pay, thus will speed up clearance your debt,, try to applying for a 0% on BT credit card.
Here is the advie on how to clear the debt
http://www.moneysavingexpert.com/credit-cards/?tab=sect1

And BT creditcards might help you to reduce the debt repayment
http://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards
Whatever you decide to do please keep posting. It might help other people who are in similar situation with you.

InkAndDrink303 wrote: »

Good Afternoon,

I'm looking for a little advice, and motivation here I suppose?

I need some serious help with debt, and how to manage them and I'm hoping people here may be able to assist me a little bit?

I'm 31, and last year had to move back into my parent's home following the end of my tenancy on a property I shared with a friend. Prior to that I had been in two long relationships (11 years total) which were full of frivolous spending, and free living. No concern over money or credit, or any real responsibilities.

After moving back in my parents in the first quarter of last year I had been living to my limits pretty much, with no want to meet anyone or any expectation. Towards the end of last year I met a girl who has changed my life somewhat and I can honestly say that in my years of relationships I've never felt this way about someone. It's an amazing thing to meet someone who makes me feel this way, all be it she's younger than me (23) and moved back home due to a relationship break-up so we are in a similar situation. The thing I find that has spurned me to really look at my finances is the mention of looking at renting together. I know that giving the state of my finances now I would struggle - and I am kicking myself for financially acting so stupidly!

My girlfriend know's nothing of my financial situation, and she (as far as I know) has no credit cards etc so pays very little out. I cant find it in my heart to actually let her in on my situation at the moment, or certainly the full amount just yet but I am worried at some point I will find myself cornered and will have to explain because I wont be able to book a holiday on the spur of the moment or actually look at renting when something comes up.

Help!

So, my debt laid out as below - and please ask me for more details because I will happily share, but as this is pretty much my first post here I dont know what you guys need! My plan (self-formulated!) is to attack the small ones first, get those out of the way before laying into the bigger ones.

(I earn fairly decent money - and have considered a DMP however I feel that a) by doing this I am admitting failure and can't control my money - perhaps that's apparent anyway? and b) I need to have some disposable income to actually build a life with my girlfriend and attempt to get out of my parents house).

Thank's for reading, and have a great day!

Creditor Balance
Capital One (Credit Card) 1490.17 < I pay just over minimum on this at the moment at £70 per month
BarclayCard (Credit Card) 2471.59 < I pay just over minbimum on this at £70 as well
Next (Catalogue) 478.35 < I pay £30 a month to this
Burtons (Store Card) 192.02 < I pay £30 a month to this
Halifax (Overdraft) 550.00 < Left over from an old joint account (with an ex) that I no pay anything into bar £35 to cover the charges for this OD.
Outfit (Credit Card) 191.32 < I'm now paying £50 a month to this
Lloyds (Overdraft) 3,900.00 < I don't pay anything towards this at the moment as it's the second largest behind the loan, and costs me around £65 a month in charges.
Lloyds (Loan) 4,650.00 < Was a consolidation loan of an overdraft (that I stupidly ran up again, and am paying £150 a month against this.

My take-home is £1700 per month, I pay my parents £275 for rent, try not to spend over £120 at most on food per month - this also means if I go out to eat with my girlfriend that also comes from that money - and I also pay around £85 on a combination of O2 & Vodafone contracts for an iPhone and iPad which I am unable to reduce.

I look through this forum and realise my situation is nowhere near as bad as some people's and I guess people will say this after reading my post but each to their own.

Thanks again for taking the time to read this, and your thoughts and advice are apprecaited.

InkAndDrink303 · 27 April 2016 at 5:19PM

Wow, thanks for the replies guys (and girls!) :eek:

I think I will take 'HORSEYGIRL2014's stance on the Outfit card, pay that off, get it out of the picture and then concentrate on the Burton's card. Once those two are gone then that's two down and I will tackle what I believe to be the highest one in terms of interest next which is the Capital One Credit Card.

I'm actually having trouble finding the APR's for BarclayCard (as I can't seem to log-in so need to call them), Burton's and Outfit although this is probably because for the last two I instantly eye-up the minimum payment and get rid of the paperwork ASAP when it comes through the door. I'll have to call them and ask tomorrow.

I phoned Barclaycard last night and asked them to freezer interest. They wouldn't but did refund x4 over-balance charges from the past 6 months (as I would pay £50) and then spend £80 on the card (idiot, I know!) and moved the statement date to 5 days before my actual payday so I spend less days without a payment being made on the account (I hope this makes sense!) so perhaps I should see if all of the people I owe to would do the same?

As much as I would love to be back out of my parents I wont just yet because I surely can't afford it and need to get these payments down, and I will (soon-ish) sit and explain all to my girlfriend in regards to my finances. I wish i had when we first met but who advertises themselves as single and bad with money? haha.

I see a few of you said I have £700 to put to debt's - I don't as I do have to buy petrol as well at around £35 per week, I smoke (all be it £10 a week - rollies!) and try to have a 'on-a-shoe-string-budget' social life. I have no saving's, at all and things like birthday's are a real pain in the backside (this weekend I have two family ones!). Next month my car has it's MOT which is bound to be £100 at least so although it may seem I have £700 to plough into my debt's, I dont. I'm trying my best to cull all unnecessary expenditure where possible, I really am.

My credit score (according to Equifax - free trial, thanks!!) isn't actually took bad, 416 as it goes however I don't really want to apply for any new cards to do a 0% BT - the only one I seem to have a chance with is a 37/38/40 month BarclayCard but once you have one from them you can't take another.

Appreciate all the advice guys, have a good evening! :T

InkAndDrink303 · 27 April 2016 at 5:38PM

Okay, I just phoned around (except BarclayCard) and got those rates ...

Creditor Balance Rate
Capital One (Credit Card) 1490.17 30.34%
BarclayCard (Credit Card) 2471.59 ?%
Next (Catalogue) 478.35 22.90%
Burtons (Store Card) 192.02 33.80%
Halifax (Overdraft) 550.00 6.50%
Outfit (Credit Card) 191.32 39.90%
Lloyds (Overdraft) 3,900.00 21.47%
Lloyds (Loan) 4,650.00 29.90%

The Outfit card, followed by Burton's followed by CapitalOne as I thought. I can overpay on the Lloyd's loan too so perhaps that one next?

adindas · 27 April 2016 at 6:11PM

InkAndDrink303 wrote: »

Okay, I just phoned around (except BarclayCard) and got those rates ...

Creditor Balance Rate
Capital One (Credit Card) 1490.17 30.34%
BarclayCard (Credit Card) 2471.59 ?%
Next (Catalogue) 478.35 22.90%
Burtons (Store Card) 192.02 33.80%
Halifax (Overdraft) 550.00 6.50%
Outfit (Credit Card) 191.32 39.90%
Lloyds (Overdraft) 3,900.00 21.47%
Lloyds (Loan) 4,650.00 29.90%

The Outfit card, followed by Burton's followed by CapitalOne as I thought. I can overpay on the Lloyd's loan too so perhaps that one next?

If you just want to know which one to clear first, is it very simple. The one with highest interest and moving down the second, third highest, etc .

In your case it has got to be Outfit (Credit Card) 191.32 39.90% first and then Burtons (Store Card) 192.02 33.80%, followed by Capital One (Credit Card) 1490.17 30.34% etc

Try to apply a BT Creditcard it will help you to reduce the interest you are currently paying, thus to speed up clearing the debt ...

horseygirl2014 · 27 April 2016 at 6:29PM

Ok, think we all saw the 120 as an 'all in' cost for the month.

Petrol - have a quick look at your local petrol prices. Also check your tyre pressure regularly (softer tyres use more petrol) and open a window instead of using air-con. (wont save a lot, but will add up over a year)
Equifax : Keep an eye on the free trial. Make sure you've made a note of when you need to Cancel it on the calendar. (as its an added expense that i personally would put the money towards debts)

As for birthday ideas - Try local charity shops, or make something yourself. You might have to look a bit harder for something, but it will keep the budget down, and make it more personal. Same with birthday cards, (we have a running joke in our family, as we reuse the same birthday cards each year, just add extra pets names at the bottom as time goes on.)

Its all the little things that will save pennies here and there that will make a huge difference. But don't try and change everything at once, you need to make new spending habits that are hard to break.

Also, I want to check what you mean about the statement date?? Do you mean payment date??
My (only) credit card statement is dated 22/month, arrives about 25/month, and then is due for paying on 14/month.
You need your due for paying date to be after your payday, to make sure you don't incur any extra interest charges.

Time to be honest with myself!

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