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    • barsbeh
    • By barsbeh 29th Sep 16, 7:10 PM
    • 3Posts
    • 3Thanks
    barsbeh
    Post-uni debts - Best solution?
    • #1
    • 29th Sep 16, 7:10 PM
    Post-uni debts - Best solution? 29th Sep 16 at 7:10 PM
    Hi all,

    Myself and my partner recently finished university. I've landed myself a job, which in future could be really good earnings wise; but alas, I'm currently a graduate and therefore, as my managing director put it "cheap as hell". But I do know the earning potential here is massive.

    Essentially, whilst at uni, me and my partner were both a bit stupid. We both wiped out an overdraft each, to the tune of £2,000. Further than that, we also have credit card debt of approx £1400. So in total on those, we have just shy of £5,000 in debt.

    Next up, a nice fat CDL. My partner did her masters, but it wasn't covered by Student Finance so had to get a career development loan to fund it. The loan amount for this is about £8,500 but repayable to the tune of just under £12,000 over a 7 year period, including interest.

    I'm trying to find a way to manage this effectively. As it stands, I'm earning £22,000 a year with potential payrises etc coming soon, but that's obviously uncertain and not something I'm taking into account at the moment. My partner is struggling to find work, and currently has a 0 hour contract where she'll be averaging likely around £300 a month, depending on how busy the place is and what not.

    I currently have a year to pay off my overdraft before I start incurring interest (co-op student account, turns into a current account in August 2017). My partners is around June/July next year before she starts to incur interest with the Santander student account.

    So currently, what we really need to get paid off, is the credit card and CDL monthly payments which together are between £250 - £300. My partner is currently in talks about lowering payments for the CDL. She's done so in writing to ensure that there is a paper trail, as they completely dismissed it when she phoned.

    My thinking is getting a loan that can cover all, if not the bulk, of this debt. Is this a feasible option, or even a good idea? The CDL will only be about £9,000 if we pay it all off straight away, based on what was borrowed; but I would imagine that it would also incur an early settlement fee. My idea with the loan is that all debt is paid off, and then the loan payments should work out lower each month than we currently have, and allow us to manage our money a bit better.

    So, long story short. Me and my partner screwed up financially during our time at uni, my partner has since done a masters requiring a CDL, and I'm trying to find the best way to get money managed whilst not screwing with our credit ratings.

    Any advice would be greatly appreciated
Page 1
    • ab_saver
    • By ab_saver 29th Sep 16, 7:19 PM
    • 210 Posts
    • 558 Thanks
    ab_saver
    • #2
    • 29th Sep 16, 7:19 PM
    • #2
    • 29th Sep 16, 7:19 PM
    As a new grad myself I understand the situation. I'd consider shopping around on the best graduate accounts (the MSE site has a good summary) as some of them give you longer interest- and fee-free periods (mine is tiered over 3 years decreasing each year - although I want it gone by Christmas ) which might give you a bit more breathing room.

    I don't know about the loan I'm afraid but I'm sure someone will be along who will.
    In general I've found (strict) budgeting essential as I overspent after my first pay packet as I suddenly had way way more money than I did as a student. Some people are big fans of you need a budget, I have an app called ontrees, some have complex and wonderful spreadsheets. I've found keeping a diary in the DFW diaries sub board a great way to stay accountable (mine is unimaginatively called New Grad DFW....).

    As I'm sure you've seen - people can help you find cutbacks if you post your budget/statement of affairs or there are plenty of challenges if you are competitive. I think as new grads we are in a good position to get things sorted quickly without being charged too much interest relative to others, and can hopefully now develop good lifelong financial habits.

    Good luck!
    Pesky student overdraft gone _House fund: ~£300 / £10,000_£1000 emergency fund #208 - £15.45/ 1000
    NSDs Sept 6/7 Oct 19/18 Nov 17/15 Dec 1/12_ GC Oct: £15.62/40 Nov: £71.89/75 Dec £6.48/75
    • barsbeh
    • By barsbeh 29th Sep 16, 7:26 PM
    • 3 Posts
    • 3 Thanks
    barsbeh
    • #3
    • 29th Sep 16, 7:26 PM
    • #3
    • 29th Sep 16, 7:26 PM
    Thanks for the reply! We did a quick budget, of sorts, to essentially work out approximately how much we should be having available at the end of each month.

    The main issue with that is, we don't know what our bills will really be like yet. We're yet to have a water, gas or electric bill since moving in. These should be due soon, and should hopefully give us an idea of how much we should be expecting to pay on average each month.

    We've been the same though. Suddenly having £1500 or so a month, if you don't include the chunk taken by rent, felt rather strange; we did have the costs of moving, such as buying furniture etc, but we did that as cheap as possible and we're pretty much done with that now
    • ab_saver
    • By ab_saver 29th Sep 16, 8:05 PM
    • 210 Posts
    • 558 Thanks
    ab_saver
    • #4
    • 29th Sep 16, 8:05 PM
    • #4
    • 29th Sep 16, 8:05 PM
    For the bills I'm going to possibly state the obvious - 1. have you changed to get a good deal (see MSE cheap energy club if not)? 2. are you paying by monthly direct debit? If you pay by DD bills are often cheaper and I'm on a tariff where you pay a fixed amount every month (so essentially overpay in summer to subsidise the winter months).

    Another thing I forgot to mention is if the CC isn't at 0% I'm sure there are people who can advise you on such deals. CDLs are outside my area of personal expertise but I imagine the same logic applies in terms of getting interest rate as low as possible (this I presume is partly where you are going with the loan to cover rest of it - but if OD and CC are 0% doesn't make much sense to convert those to a loan with interest).

    Re: budgeting. After my second lot of pay I found it enlightening to go back through my spending and look at exactly how much had gone on each category - small trips to shops, to see friends in next city etc etc really add up.

    I'm currently on a quite brutal quest to minimise non-essential spending (plus a holiday!) and get it paid off ASAP. If you know how much you need to pay each month to get loans etc done then you can cost that in and view any extra you can throw at it as a bonus. One idea is to put loan repayment money away immediately after payday so you can't live off it/ fritter it away - I used to do this with rent and bills but have now managed to arrange for those at least to come out in the first week after payday.

    Hope this is of some help - I realise it's mostly tangential to your main question, but there are a fair few new grads sorting out overdrafts about.
    Pesky student overdraft gone _House fund: ~£300 / £10,000_£1000 emergency fund #208 - £15.45/ 1000
    NSDs Sept 6/7 Oct 19/18 Nov 17/15 Dec 1/12_ GC Oct: £15.62/40 Nov: £71.89/75 Dec £6.48/75
    • Sanctioned Parts List
    • By Sanctioned Parts List 29th Sep 16, 8:31 PM
    • 294 Posts
    • 764 Thanks
    Sanctioned Parts List
    • #5
    • 29th Sep 16, 8:31 PM
    • #5
    • 29th Sep 16, 8:31 PM
    Some good advice above wrt. how to organise your money.

    Beware of loan consolidation - it tends to work out more expensive in the end than just knuckling under and paying off debts from highest to lowest cost.

    But more significant - your other half needs to sort out a proper income. I know, I know, she's looking for work in her chosen field... but at the moment, a zero hours contract paying £300/month, given a potential 160 working hours per month, means she's effectively valuing her time at £1.67 per hour. You get better than that stacking shelves or flipping burgers.

    Yes, it's not a nice thing to consider, but your OH should consider taking any (and I do mean any) full time job that she comes across just to get things moving. It'll look better on the CV, too, than waiting on a zero hours contract for something better to come up.
    Last edited by Sanctioned Parts List; 29-09-2016 at 8:37 PM. Reason: tone

    • barsbeh
    • By barsbeh 29th Sep 16, 9:10 PM
    • 3 Posts
    • 3 Thanks
    barsbeh
    • #6
    • 29th Sep 16, 9:10 PM
    • #6
    • 29th Sep 16, 9:10 PM
    For the bills I'm going to possibly state the obvious - 1. have you changed to get a good deal (see MSE cheap energy club if not)? 2. are you paying by monthly direct debit? If you pay by DD bills are often cheaper and I'm on a tariff where you pay a fixed amount every month (so essentially overpay in summer to subsidise the winter months).
    Originally posted by ab_saver
    Gas and Electric are on the cheapest we can get around here; first thing I did was going through various comparisons etc to find the cheapest. Paying by DD on that too, and its set to go out the day after payday so I know its gone

    Another thing I forgot to mention is if the CC isn't at 0% I'm sure there are people who can advise you on such deals. CDLs are outside my area of personal expertise but I imagine the same logic applies in terms of getting interest rate as low as possible (this I presume is partly where you are going with the loan to cover rest of it - but if OD and CC are 0% doesn't make much sense to convert those to a loan with interest).
    Originally posted by ab_saver
    CC unfortunately isn't 0% interested. CDL is already on the longest payment schedule available at the time of applying, I believe the interest was constant throughout but obviously longer payment schedules = more interest being paid. We have wrote to Barclays to suggest a lower payment amount over a longer period each month.

    Re: budgeting. After my second lot of pay I found it enlightening to go back through my spending and look at exactly how much had gone on each category - small trips to shops, to see friends in next city etc etc really add up.

    I'm currently on a quite brutal quest to minimise non-essential spending (plus a holiday!) and get it paid off ASAP. If you know how much you need to pay each month to get loans etc done then you can cost that in and view any extra you can throw at it as a bonus. One idea is to put loan repayment money away immediately after payday so you can't live off it/ fritter it away - I used to do this with rent and bills but have now managed to arrange for those at least to come out in the first week after payday
    Originally posted by ab_saver
    Thats the plan. We're looking at cutting out as much non-essential spending as possible, but still be able to have some form of a life. Myself and my colleagues are quite sociable, and all our partners get along, so we tend to have nights round each others etc and whilst this can be cheap, its obviously not essential.

    Hope this is of some help - I realise it's mostly tangential to your main question, but there are a fair few new grads sorting out overdrafts about.
    Originally posted by ab_saver
    Definitely being helpful

    Some good advice above wrt. how to organise your money.

    Beware of loan consolidation - it tends to work out more expensive in the end than just knuckling under and paying off debts from highest to lowest cost.
    Originally posted by Sanctioned Parts List
    Already checked; with the incurring interest on the CC (18.8% IIRC), and the interest that would be incurred on the overdrafts next year, combined with the amount having to be paid to Barclays for the CDL it would work out cheaper to pay all of them off in one lump and not have the individual monthly payments; it would be just shy of £400 a month to get our overdrafts paid off before they begin to incur interest. That's not factoring in payments on CDL and CC.

    But more significant - your other half needs to sort out a proper income. I know, I know, she's looking for work in her chosen field... but at the moment, a zero hours contract paying £300/month, given a potential 160 working hours per month, means she's effectively valuing her time at £1.67 per hour. You get better than that stacking shelves or flipping burgers.

    Yes, it's not a nice thing to consider, but your OH should consider taking any (and I do mean any) full time job that she comes across just to get things moving. It'll look better on the CV, too, than waiting on a zero hours contract for something better to come up.
    Originally posted by Sanctioned Parts List
    She's looking, and applying for everything, including tailoring her CV to be more appropriate for different jobs and no longer including her masters to prevent being "over qualified". Just difficult around here at the moment; university students are snapping up everything as they're obviously willing to take less pay (despite the fact my partner would happily earn less p/h if it ultimately brought in more each month)
    • hlenn
    • By hlenn 29th Sep 16, 9:32 PM
    • 1 Posts
    • 1 Thanks
    hlenn
    • #7
    • 29th Sep 16, 9:32 PM
    Watching with interest
    • #7
    • 29th Sep 16, 9:32 PM
    You are definitely not alone in this situation, although we are blessed to both be in full time employment. I hope you get some answers soon, goodness knows we need some answers!
    • ab_saver
    • By ab_saver 29th Sep 16, 9:36 PM
    • 210 Posts
    • 558 Thanks
    ab_saver
    • #8
    • 29th Sep 16, 9:36 PM
    • #8
    • 29th Sep 16, 9:36 PM
    Myself and my colleagues are quite sociable, and all our partners get along, so we tend to have nights round each others etc and whilst this can be cheap, its obviously not essential.
    Originally posted by barsbeh
    One more thought on this from my own budget that I've recently re-drafted - pencil in an eating out budget - that way I was able to go out with my colleagues without feeling guilty for spending but have been able to keep it in check.

    It sounds generally like you've done most of the 'painless' savings. In general (as you seem well aware) it makes sense to pay off highest interest first (CC) then work your way down. If you both graduated this year then it might be worth your OH talking to S@ntander as their current offer is up to 3 yrs free OD facility. http://www.moneysavingexpert.com/students/graduate-bank-accounts#graduateoverdraft This might buy you a bit of time if you are worrying about not clearing it within a year.

    I think that's pretty much exhausted my advice from personal experience - sounds like you have your head screwed on.
    Pesky student overdraft gone _House fund: ~£300 / £10,000_£1000 emergency fund #208 - £15.45/ 1000
    NSDs Sept 6/7 Oct 19/18 Nov 17/15 Dec 1/12_ GC Oct: £15.62/40 Nov: £71.89/75 Dec £6.48/75
    • luvsmoothies
    • By luvsmoothies 30th Sep 16, 9:36 AM
    • 469 Posts
    • 305 Thanks
    luvsmoothies
    • #9
    • 30th Sep 16, 9:36 AM
    • #9
    • 30th Sep 16, 9:36 AM
    Your managing director sounds like an !!!! hole.
    • Houseplant26
    • By Houseplant26 18th Oct 16, 7:36 PM
    • 286 Posts
    • 1,172 Thanks
    Houseplant26
    Hi,

    Just stopping by to say hello. I'm a not that recent but still fairly recent graduate (graduated 2012 from a BA). I can sympathise. I was lucky/sensible in that I managed to get by at uni with no credit card and only £1500 overdraft but it took me 3 years to pay it off and now in 4th year I'm on a low wage and dipped back into it in recent months.

    I earnt 14,000 the year I graduated! Now I'm on not far that again as I'm on 18,000 pro rata and inbetween I earnt a maximum of 20,000. It's bloody tough and my essentials are at 60-70% of income.

    I'm going to have to reign my spending right back again if I can hope to save and be back out of overdraft again.

    I echo the comments on accounts. I was lucky mine was interest free year I graduated then on part of it before being charged on all of it in recent years but even then interest rate is low and manageable.

    I feel like I'm treading water too. I need to find more work and/or be more ambitious about moving up in my field but my field is in the not for profit sector, there's way more people than jobs and I did well to even get a job in it.

    I need to seriously consider saving for a desposit with my
    partner to avoid my high rent and/or potentially moving further North. Seems unachievable though at the moment!

    0hrs contracts are really !!!!. My younger sibling did an MA with a CDL but she loves at home now and pays minimal rent to my parents. Would you ever consider not renting yourselves for a bit and living at home? Is that an option? Would it be awful and affect your relationship too much? It's just an idea as I know my sister couldn't really manage on her mainly self employed and part time wages with the CDL.
    • Houseplant26
    • By Houseplant26 18th Oct 16, 7:40 PM
    • 286 Posts
    • 1,172 Thanks
    Houseplant26
    Also is it worth posting a SOA soon when you know your bills more? Then people can see where savings could be made?

    I wish you and your partner all the best as well. sorry if I went on about myself a bit I just feel frustrated that it's so hard to get 'going' after university.
    • Sam29
    • By Sam29 18th Oct 16, 8:19 PM
    • 16 Posts
    • 9 Thanks
    Sam29
    Just to say i sympathise as i was in the same boat. Career developement loans are a pain but i did the opposite and decided to pay off as soon as possible which left me the overdraft and credit card debt but got rid of my biggest debt. It was a struggle but better to struggle now rather than when you have car/house/kids etc. Just remember you are both starting out and are in a situation that many people will recognise. Things will get better and you are doing the right thing by adressing problem at early stage. I would NOT go down the consolidation route as it will make things worse and could potentially end up with a big debt rather than a few smaller ones. Keep things simple. Work out which debt has the higest interest and focus on paying that whilst also covering all other payments and then when thats paid move on to next highest and snowball your payments so you are gradually paying more and more off your debts. Before you know it you will both be working and taking big chunks out of your debt. Small steps is what you need and slowly but surely it will get better. Good luck
    • tlc678910
    • By tlc678910 18th Oct 16, 9:00 PM
    • 386 Posts
    • 757 Thanks
    tlc678910
    Hi,
    Just wanting to wish your partner luck in their job hunt.
    Lots of organisations will recruit for Christmas posts and keep a few staff on after Christmas. It's a great way to get a foot in the door of a big organisation.

    Even if it is not a dream job, getting in early and working hard with a smile gets you noticed and if only a handful of people are kept on there will be a very good chance of being one of them. If no one is kept on ask your manager and hr to give the headsup if they take people on and if they will be a reference.

    The big retailers, restaurants and pubs will have graduate schemes and having a great reference from working there can help to get onto one. This might not be their career of choice but it's a good plan b if needed.

    In short a not so good job in a large/good organisation can be a great stepping stone.

    Good luck
    Tlc
    • Helvetica Van Buren
    • By Helvetica Van Buren 19th Oct 16, 9:12 AM
    • 209 Posts
    • 292 Thanks
    Helvetica Van Buren

    Myself and my partner
    Originally posted by barsbeh
    My partner and I.
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