Advice Sought: taken the decision to sort out finances today!

debtsolver_2

Hi all,

My first time on money saving expert. ive decided today that i need to sort my finances out. They're not at crisis point. Im aware of that, but i need to sort them out now so i can secure the future.

ok,

so briefly this is the situation im in.

after leaving University, and finally getting the job i want for the money i want, i have the following debts that are hanging over my head.

Overdraft: 2000
Loan: 2000 (i had to go with welcome finance, because of my poor credit rating, i am paying a ridiculously high interest and have been for 6 months now.)
Credit card: 600 (if possible id like to increase my limit to £1000, to give me emergency money)
other Overdraft: 700

now whilst i appreciate this isnt a huge debt, i am concerned that it is snowballing.

Im in the situation at the moment where i dont have anymoney, even for a emergencies, which is very concerning.

my income is covering what i need to pay out, but is not covering all of them, for example my second overdraft requires a payment of 100 a month to clear it which at the moment i am not meeting. i am in the process of looking at my budget and crunching figures.

i was looking for advice on the following:

i have a poor credit rating, because of missing payments. and therfore i had to take the loan of 2000, with a ridicuously high interest rate. At the time i was aware that this would only be a quick fix, and am worried that i am now in the position of potentially needing another quick fix. BUT THIS IS NOT WHAT I WANT TO DO. i am unsure of whether to get a loan, to cover all of the above in order to start afresh as it were. i know that when i have a payment to meet every month i do it.

the problem with the above is my credit rating. i am unable to get a loan to cover all of the above, because it is so poor.

natwest have recomended taking a loan with them, to clear my overdraft to sort out my credit rating long term. (a little demon in my head tells me that i shouldnt do this, as the long term money i will be paying back in interest for this loan outweighs my monthly interest on my overdraft)

i am aware that there is no quick fix for any of the above, but want to get it sorted so i can get back on track.

any ideas, support or where to go next would be much apreciated.

**Amy**

:hello:

Welcome to MSE and well done you on deciding to sort out those debts before they spiral.

I would say DONT go for the loan with Natwest as this will probably consolodation which i have read on here is not great.

If you could fill out an soa (statement of account), with all of your incomes/outgoings, that way we can try and sort out what you need to do.

http://www.makesenseofcards.com/soacalc.html

x

debtsolver_2

ok so here goes..... Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1322
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1322

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 440
Management charge (leasehold property).. 0
Council tax............................. 68
Electricity............................. 20
Gas..................................... 0
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 18
Mobile phone............................ 60
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 20
Petrol/diesel........................... 40
Road tax................................ 10
Car Insurance........................... 64
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 120
Holiday................................. 20
Emergency fund.......................... 0
(Unnamed monthly expense)............... 0
Gym..................................... 35
Total monthly expenses.................. 1175

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1800
Other assets............................ 0
Total Assets............................ 1800

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
Nat West credit card ..........600.......13........0
Welcome Finance loan...........2000......182.8.....0
hsbc overdraft ................700.......100.......0
nat west overdraft ............2000......0.........0
Total unsecured debts..........5300......295.8.....-

Monthly Budget Summary
Total monthly income.................... 1,322
Expenses (including secured debts)....... 1,175
Available for debt repayments........... 147
Monthly UNsecured debt repayments....... 295.8
Surplus(deficit if negative)............ -148.8

Personal Balance Sheet Summary
Total assets (things you own)........... 1,800
Total Secured debt...................... -0
Total Unsecured debt.................... -5,300
Net Assets.............................. -3,500

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========

e.g. the number of adults & children in the household, the number

of cars included in the SOA or anything else that may be useful. look forward to hearing your responses...... (slightly scared)

new2civvystreet

What sticks out most in my mind is the mobile phone, gym and entertainments. Are you tied into that £60 per month or could you reduce it. Can you exercise anywhere for free instead of using the gym, lastly, can you justify £120 for entertainment if you have a monthly deficit?

debtsolver_2

i agree with you, and am in the process of looking into it for phone and entertainment

unfortunately the gym is tied into a 12 month contract which doesnt end until January.

i will look into reducing my entertainment to £80 a month. i agree that this is
a must.

i really want to find a way on consolidating my debts, so i know what monthly figure i have to meet on repayments and then i can adjust my spending accordingly.

debtsolver_2

do people think i should open a new bank account? a basic one then pay of my current overdraft that way??

MERFE

also how many are you feeding? if it is just yourself, you should be able to reduce your grocery budget, try the grocery challenge on the old style board to help get this down. I spend 200 pounds a month for 4 including nappies I think you should be able to half your current spend.

debtsolver_2

try the grocery challenge on the old style board to help get this down

wher do i find this?

count_rostov

Another figure you should look at is your grocery spending. I spend about £100 for two people, and my boyfriend is a landscape gardener so eats a lot!
Yes, getting a basic bank account would be a very good idea. Then you can treat both overdrafts like debts and make regular payments to them. It will also make you learn how to manage your money properly and make sure that you reach the end of the month with cash in your account.
If you get your mobile use down to £15 a month (this is still generous and you have a landline to make long chatty calls), your groceries down to £80/month (this should also cover packed lunches, go to the Old-Style board for thrifty cooking tips) and cut your entertainment to £80/month you have £322 a month to spend on debt repayment. If you use ebay, mystery shopping or even babysitting or ironing to up this to £400 a month you can easily clear your debt within 18 months.
Welcome on your debt-free journey - you'll be obsessed with spreadsheets before you know it!

debtsolver_2

thanks count rostov much appreciated.

im already on the babysitting, mystery shopping and ironing (why anyone would want to do more ironing i dont know) where do i find info for being paid for ironing?! :-)

i like this site already!

keep em coming in folks!

can anyone recomend any basic bank accounts ? i guess there all pretty basic!