Debt Advise

Hi

I am in need of some guidance as I am coming to my wits end with my debt. I have the following debt outstanding and need to know best way forward in clearing it. I have a 2K pay out pending so this will help in clearing some of it.

My CC currently stands at 1515.00
My loan can be cleared at 1100.00 (or continue to pay £43 a month for couple more years)
I also am now into my overdraft another £200

My income is Salary £1600
Rent/bills/Food/Travel is est £1200 a month ( this will change Feb 2015 when I move from current house to cheaper accommodation)

With no savings I am living month to month and this is now taking it's toll on me day to day and my relationship.

If anyone can offer some advise I would very much appreciate it.

Comments

  • twiggy86
    twiggy86 Posts: 2,137
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    Hi


    I'm new to this debt busting malarkey but have picked up the following advice from the boards:-
    1. Do a statement of affairs - I'm sure someone will post a link. I'll be honest in that I haven't done one of these yet but it helps you see where EXACTLY your money is going each month. If you post it people will then advise areas to try and cut back or where you should allocate money i.e. cut your mobile bills, have you accounted for hair cuts, car maintenance etc


    2. Do a "snowball" - if you search google it should come up. It advices of the best way to prioritise your debts based on the interest on them, although if I'm correct your pay out will almost clear them? However this isn't always about paying debts off but also having money allocated for expenses (e.g. car/home insurance) when they occur rather than then having to rely on CCs


    3. Start a diary on the DFW Diaries thread - I'm finding its very good to keep you on track and people are very supportive


    If you have a read through people's diaries I think you'll see that (on the face of it) you're in a very good position and your debts are reasonably low (although I'm sure they seem very big and unmanageable to you). Hopefully you'll see that people with far far greater debt than you have either made great progress or are now debt free.


    Hope that helps - although I'm sure someone much wiser will give you more help!


    Good luck
    Starting again..
  • moohound
    moohound Posts: 1,209
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    Which has the highest interest the loan or the CC?

    I would clear the OD and either the loan or the CC whichever has the highest interest. Being free of the OD will help you get used to living within your means.

    With just one outstanding debt budgeting will become easier.

    The small remainder can be the start of the emergency fund.

    Do you know where the other £400 goes every month?
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  • enthusiasticsaver
    enthusiasticsaver Posts: 15,474
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    Some very good advice above which I would totally agree with. Do not rush into making decisions and it is important to realise that actually although your debt seems overwhelming to you it is not that bad but you have obviously realised there is a problem and are taking steps to correct it.


    Firstly make a note not only of how much you owe but also what interest rate you are paying on it. DO NOT BORROW ANY MORE UNLESS CONSOLIDATING ONTO A LOWER RATE. Prioritise paying it off according to interest rate so normally the credit card should be paid off first unless it is on a 0% or low interest rate deal.


    Secondly make a note of income and expenditure in more detail and look for savings, eliminations.


    Thirdly start a savings funds and keep a little aside every month so when you receive an unexpected expense you are prepared and it does not eat into your normal monthly expenditure causing you to go overdrawn.


    Good luck.
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  • Roibeard
    Roibeard Posts: 10 Forumite
    Thanks all

    The loan has the highest interest but I have the option of paying it off now for £1071. It was a very bad decision on my behalf couple of years ago. So paying it off now will save me £43 a month for the next 2 years.

    The CC is 0 % finance so is manageable to a certain degree but would like to reduce it ASAP

    The OD is the one I need to get away from and as mentioned start living in my means.

    God knows where the other money goes, but it seems to go!! I know I have to tighten up on certain things so will work towards that.

    Yesterday on posting the question, was having a bad day and arguing with my otherhalf, I know in the grand scheme of loan problems it is not the big but it's just too frustrating to be in this position.

    The 2K payment pending is due to a bike accident I was involved in recently and the insurance company are paying out for damages etc. Luckily I have made a full recovery as if I had to take time off work not sure how bad my finances would have got!

    Thanks all for your help.
  • Roibeard wrote: »
    God knows where the other money goes, but it seems to go!!

    This is where the SOA (link below), and possibly a Spending Diary, comes in.

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