Finally decided enough is enough...

thetommo85 · 12 February 2014 at 8:40PM

Hi Guys,

Stumbled across this forum the other night and after reading a few posts decided I would post myself - so this is my first one, apologies if it's long.

I've finally admitted I have debt and no control of my finances and have decided to do something about it - I've known I've got debt but I have chosen to ignore it until now. I'm also extremely fed up of being broke halfway through each month. Any advice will be gratefully received.

My current debt stands at -

1. Barclaycard - current balance £4025; Limit is £3900 - over limit by £125
2. MBNA Credit Card - current balance £3758; Limit is £4700 - Under limit by approx £1k
3. HSBC Overdraft - £1000
4. My Grandfather - £650

Total - £9433.00

I'm a 28 year old single bloke, renting a room off a mate. I have very few outgoings - rent is £400 a month, phone bill - £50p/m, car insurance £50p/m, fuel - £40p/m and contact lenses £20p/m.

I buy £100 worth of shares through work (after tax) and £95 worth before tax.

I earn £30k a year - take home is approx £1700 a month - and I know I shouldn't be in this position.

The thing is, I've never taken any responsibility for my finances - I've just buried my head in the sand, done the olde credit card shuffle and pretended all will be ok.

It was only when I went to do the shuffle to a 0% card the other day and got refused I realised I need to do something.

Up until the start of this week I hadn't checked my bank balance in over a year. Seriously. It was almost a phobia doing so. I have now downloaded the HSBC fast balance app and am checking my balance everyday.

And I wondered why I was skint halfway through every month haha? I've literally had no control over my spending - for me, something as simple as downloading the app is a massive step in the right direction.

With regards to spending and where my money goes each month - nights out. I love a good night out and can easily smash £100 - £150 a night over the weekend. This is something I am curbing. I can't continue living outside of my means.

I don't spend on my credit cards. I ran up £5k on one when I went travelling and haven't attempted to pay it off. The other one came about when doing the credit shuffle and not actually getting rid of the card who's balance I transferred - I then used it to pay for some maintenance work on my car.

But with regards to general spending - I don't use the cards, when I'm skint, I'm skint.

I think at this point of my life I am in the best position to clear this debt as I'm not really tied to anything. I've given myself until May next year to clear the debt as that's when I turn 30 - I hope this is realistic.

I feel that the debt and not being in control of my finances is holding me back in life - I miss out on doing things with my friends and I worry from around the middle of the month until pay day. It's no way to live and I want to knock it on the head before I meet someone and decide to settle down. I think I'm at that point where if I don't do anything now it could very well spiral out of control - and I don't want that.

This has been quite difficult to write as I don't think anyone likes admitting mistakes but it also feels like a step in the right direction and a weight off my shoulders.

I realise, from reading the forum, that there are many people worse off than me and I wish them all the luck - debt is a horrible thing - but this is where I am. I would appreciate any thoughts, advice and (constructive) criticism.

Thank you

MallyGirl · 12 February 2014 at 8:46PM

First of all - well done for taking the first step. It is a big one. With your income you should be able to sort this all out.
I suggest doing a SOA. From reading the above you spend £50pcm on your phone - what else is lurking out there? And more on insurance than fuel - do you actually need a car for that few miles?

marliepanda · 12 February 2014 at 8:48PM

The first thing I would do is post up an honest statement of affairs, and also start keeping a spending diary.

As you say you bring in a good wage and have small outgoings so it should be easy to pay off these debts. You need to see where that money is going! As my mum always says, look after the pennies and the pounds will look after themselves!

Realising you have a problem is the first step though, so you're already well on your way!

I'd also get that Barclay card under its limit asap to make sure you don't incur charges!

thetommo85 · 12 February 2014 at 9:02PM

Thanks - Where do I do an SOA?

I think my main problem has been never checking my balance and just going out on the town. I hope by keeping a close eye on my bank account, I will be more tempted to stay in and change certain behaviours, for example saying to my mates I'm not going out as I can't afford it, or not buying massive rounds.

With regards to phone bill it's £27.50 per month for mine and £10.50 for my little brother's - so more like £38pcm than £50.

And yes, I could probably do without a car but to be honest, it's an old Golf and it's so cheap to run I don't want to get rid of it. If things were to get worse then it would be something I'd be prepared to do - but I want to get on top of things before they get to that stage.

marliepanda · 12 February 2014 at 9:05PM

http://www.stoozing.com/calculator/soa.php

daviesalie_2 · 12 February 2014 at 9:17PM

When you've done your SOA it will tell you how much cash you'll have left. Under 'Next Steps' it says Snowball. Click on that am it will tell you how much to pay off which debt every month and this will give you your exact debt-free date.

I've printed off my snowball, laminated it and put it in my purse. Its a good reminder when I go and pay for something I don't really need

GettingOrganised · 12 February 2014 at 9:57PM

Hi thetommo, welcome to the forum! I was like you with the fear of checking my bank balance. I've recently got the HSBC app too and check my balance daily now. It has put me back in control of my money.

Good luck on your journey, I'm sure you'll be able to achieve your target debt free day and we'll all be here for support along the way.

Toomuchdebt · 12 February 2014 at 10:04PM

Definitely agree with doing an SOA-very enlightening sometimes

Secondly and this will sound dumb but how on earth do you spend that much on going out?I don't drink much so I appreciate drinks are expensive but I would struggle to spend more than 50 on a night out and that's including a meal.I'm getting old I think.
As for paying the debts off, barclaycard has to be the priority as it's over limit I think.

thetommo85 · 12 February 2014 at 11:02PM

Haha, the pubs here are open til around 5am! I tend to get rounds in too.

I have made some positive changes - stopped playing fruities - I was never much of a gambler but used to put in maybe £10 - £15 a week. And if I go to the pub mid-week I'll drink Lime n Soda - 75p versus £3.80 for a pint of lager! Dry January taught me that one.

I'll defo tackle the Barclaycard first - I'm planning on paying a set amount per month on or around payday, which is when all my bills go out and keeping a close eye on balance/spending through the month.

At the end of the month, anything left over I will put towards the card.

Do you guys think I should try and save a small amount each month? Or will that money be better off going off the debt and I'll concentrate on saving once debt free?

JustAboutThere · 12 February 2014 at 11:47PM

thetommo85 wrote: »

Haha, the pubs here are open til around 5am! I tend to get rounds in too.

I have made some positive changes - stopped playing fruities - I was never much of a gambler but used to put in maybe £10 - £15 a week. And if I go to the pub mid-week I'll drink Lime n Soda - 75p versus £3.80 for a pint of lager! Dry January taught me that one.

Sorry - rounds will probably have to go.

Another tip is alternate one drink with a glass of tap water.

Well done for 'fessing up and making a change to your spending habits. Work on that SOA and people here will be able to help identify ways to cut down your spending.

thetommo85 · 13 February 2014 at 9:50PM

I've done the SOA - see below -

The only thing I've missed is entertainment as I couldn't say how much I spend - I know it's a lot - and this is something I will be cutting right back on in the coming weeks and months

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1700
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1700

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 400
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 18.33
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 0
Petrol/diesel........................... 40
Road tax................................ 0
Car Insurance........................... 53
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 681.33

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................4025.69...100.......16.9
MBNA...........................3758.41...90........0
HSBC Overdraft.................1000......0.........0
Family Loan....................650.......0.........0
Total unsecured debts..........9434.1....190.......-

Monthly Budget Summary
Total monthly income.................... 1,700
Expenses (including HP & secured debts). 681.33
Available for debt repayments........... 1,018.67
Monthly UNsecured debt repayments....... 190
Amount left after debt repayments....... 828.67

Personal Balance Sheet Summary
Total assets (things you own)........... 500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -9,184.1
Net Assets.............................. -8,684.1

Created using the SOA calculator

Finally decided enough is enough...

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