help clearing my debt

Barham · 22 July 2016 at 11:11AM

My position is that I have recently retrained as a secondary school science teacher, completing my NQT year last year. This has meant that two years ago I completed my PGCE course, which meant I had no income coming in, other than student loan, although this only just covered the basics and only arrived every term. So making monthly payments on my credit card was difficult and as a result meant I missed a payment and made a couple of late payments. As a result my credit took a bit of a hit, along with my overdraft. In addition to this I am currently going through a divorce, which has meant that I have had to borrow from friends and family in order to cover costs.

I have a single credit card, which had a balance of approximately £3,000, but I have managed to get this down to £1,400. However my overdraft is at its maximum of £4,000 and often goes into the emergency extra £1,000 allowed on top of this. I owe my mother £600, my father £3,000 and my grandmother £6,000, they are not chasing me for the money, which is allowing me to focus on the credit card and overdraft.

On top of this I have just bought a house, through a shared ownership scheme, which will mean I have a regular mortgage and rental outgoings starting from September. I obviously want to ensure I have enough for this, but still manage to buy food, run my car and pay for any utilities.

Lastly, I have two boys aged 7 and 11, which is where most of my money currently goes on, through child maintenance, yet I still have to buy them clothes myself and other things they need, as well as taking them out and doing things with them and going on holiday during the summer.

I do not want to get into any more debt and I do not want to lose my house, so shortly after getting it. So if you can offer any help or advice, I would be most grateful.

enjoyyourshoes · 22 July 2016 at 12:02PM

Know where you are financially every day, reconcile bank a/c daily with all spends. Accrue monthly for all annual, 1/2 &1/4 ly bills (inc allocation for mot/car repairs, known unknowns). Reduce all your daily costs, cut out fags, mags, booze, lotto, coffee latte's, extended warrantees, mobile phone, sky, subs etc. Reduce the o/d as this interest monthly cost unexpected o/d access costs will be crippling. Spend only on NEEDS forget the WANTS, as per comments above until your debts have been eradicated. But daily keep on top of bank a/c and analyse where and why you are overspending and use this to eliminate.

Sanctioned_Parts_List · 22 July 2016 at 2:27PM

Hi, well done on retraining! I guess from the timing that this is the first day of the summer holiday, and that you haven't really had time to breathe since Easter.

I assume from your post that you actually are now working, although it wasn't clear. Your first step is to know where you are financially today, and make a plan for next month. Then you need to work out what will happen starting September.

So first head over to the Statement of Affairs calculator and plug your numbers in. You don't have to share it with us, although more frugal people than me are very good at finding areas of waste - you might spot some yourself when you go through the process.

Then plug in your numbers for September, including mortgage and lease payments, and see if you're above water or not.

If so, then try to find places to cut back and accelerate your repayments. Use the snowballing calculator (also on the stoozing site in my link) to work out the most efficient way to make repayments.

If not, then your priority is to pay your mortgage and lease first, then your council tax and utilities, then food and essentials then your overdraft, then your credit card if there's anything left. And talk to National Debtline.

National_Debtline · 22 July 2016 at 4:59PM

Hi Barham

Sound advice from Sanctioned above. In addition, I would suggest that you make the time to open a basic bank account somewhere away from your existing lenders now. Sooner or later I suspect you will need to move your finances to this new account, as in the meantime you will probably be paying a very high premium for being in the existing overdraft - staying there does not look viable for you.

https://www.nationaldebtline.org/EW/factsheets/Pages/basicbankaccounts/openingabasicbankaccount.aspx

Dennis
@natdebtline

Sanctioned_Parts_List · 22 July 2016 at 5:36PM

Thanks Dennis for the warm fuzzy feeling

Barham wrote: »

... I still have to buy them clothes myself and other things they need, as well as taking them out and doing things with them and going on holiday during the summer.

Clothes and shoes - look on eBay. There are a lot of folk with RMB bank accounts buying from TaoBao and selling on eBay - even with the shipping and import duty, you get good, if occasionally misspelled stuff, of otherwise very good quality, for bobbins.

Holidays - taking my own 6 and 9 year olds as examples, all a pre-teen boy needs in life is a decent stick and a place to swing it. If you've got any forest or farmland near you, borrow a tent and go camping - you'll have friends or student's parents with disused tents - make use of them.

If you've already got a smartphone with GPS, try geocaching (google it) - a great combination of hiking and geekery - of course, bashing cow parsley with a stick while you're at it.

Make mentos and coke rockets. Go hunting for the world's weirdest bug. Make a den out of leaves and sticks.

Boys' paradise, and surprisingly restful for Mum, as they'll take over and leave you to decompress...

EDIT:: and cost nine tenths of nothings, too

help clearing my debt

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