debt help :-(!!

poststudentblues

hello!

ok i have recently graduate fropm university and i have some debts that i seem to be struggling to cope with

this is what i owe to varios places!

hsbc:
£1500 overdraft (interest free, and where my salary gets paid into)
£2500 loan at 7.9% over 3 years (roughly £80pcm)
£1000 on my credit card (had to use it for a big bill when i moved house... long story!)
halifax:
£2000 overdraft (first £1800 free then interest on anything over that)
all overdrafts are maxxed out btw!


here is a break down of my income and expenditures:
annual salary £13737k (around £850 pcm after tax)

expenditure pcm (roughly):
rent: £275
loan: £80
bills (electric, internet etc..): £40
council tax: £80
food: £60
socialising: £150
stuff (cd's etc.. ): £30
petrol: £60

i dont earn enough to pay back my student loan yet

it seems that nearer the end of the month i get i am having to pay for more and more things with the credit card, i know i should just cut it up but it has been the only source of money for things like petrol to get to work and food

so!... any ideas would be appreciated!

cheers for now.......

Alleycat

Hi,

Looking at the figures you have quoted, you should have about £125 'spare' each month. However, you say that you are finding yourself having to dip into your credit card on a regular basis. I think the first thing you need to do, is to find out where this extra money is going. Keep a spending diary, where you write down everything you buy, even as far as every mars bar etc. This will help you identify the black hole. I would also suggest either cutting the credit card up or keeping it at home (or even better, give it to your mum to hold onto!) to try and minimise its usage.

How do you manage your bills? A good way of keeping on top of things, is to make sure all your bills go out as close to payday as possible, though make sure there is at least 3 days between your pay cheque going in and the dd's etc going out just in case your pay is a day or so late.

Although your food bill is pretty low, your socialising and stuff spending is pretty high for a single person. I know its difficult and sorry if I am jumping to conclusions (I used to be a student too, so am talking from experience!) but you need to remind yourself that you are no longer a student and the partying etc needs to be calmed down. Every time you want to buy a new cd or item of clothing etc, ask yourself do I really need this? You'll probably find that actually you don't. At the moment your debts come first and need to be dealt with. It may also be easier by allocating your personal spends per week rather than per month. Easier to keep track and if you find yourself running low during the week it isn't as long a wait until the next weeks spends can be used.

Another thing that springs to mind is how long are your overdrafts interest free for? If you aren't sure I would suggest finding out asap as you may be in for a nasty shock when the interest free period finishes. Once you know this and find out what the apr's will go up to, you will be in more of a position to prioritise you debt payments. What is the apr for your overdraft over the £1800 interest free amount? This will have some bearing on your monthly outgoings. Also what is the apr of your credit card? Maybe try applying for a 0% and balance transferring this across?

Anyway, thats all I can think of at the moment, I am sure there will be others with more comprensive advice and suggestions.

Alley

Annie_Fanny

Yeah I know it's awful but yeah gonna have to cut that £150 socialising down a lot. The way to look at it is - throw all the cash that you can at your debts and once they are paid off that money will be all yours!

Don't cut up the credit card just yet - it could come in handy but the best thing to do for now is, as was said, hand it to your mum.

What is the petrol usage for? Are they necessary journeys - no trips to the corner shop I hope!!

It looks like that extra £200 over the £1800 interest free limit needs to go first. What is the APR?

What's the APR on the credit card?

:money:

brummiebabe

Would it be worth shopping round for a '0% on balance transfers card' & then transferring existing debts to that? At least then you wouldn't be paying interest!!

I agree that the socialsing HAS to be cut down if you're serious about clearing the debt!

illmonkey

just noticed about your wage. what does your pay slip say?

you should be taking home more than £900 with that.

Take a look. http://www.i-resign.com/uk/financialcentre/tax_calculator_tool.asp?txtGrossSalary=13737&imageField.x=23&imageField.y=7&radAge=1&txtStudentLoan=0

Maybe your on emergency tax?

Just a thought.

skintchick

Your take home looks right to me - rouhgly 25% goes in tax, which makes £858, so your figures look right, although I would say you need to get a grip of the actual figure - I know I take home £1272, which is different to 'about £1200', and makes a difference to your budgeting.

Here are my thoughts on your budget:

bills (electric, internet etc..): £40 Break this down specifically (see point above) Do you NEED internet at home? Could you use it at work? how much are you spending on these bills? Although having said that, it sounds cheap.

food: £60 I'm single and budget £60, so well done!

socialising: £150 HOW MUCH!!!! You can't afford this. It has to stop until the debt's paid off.

stuff (cd's etc.. ): £30 Nor can you afford 'stuff'. Keep the spending diary as already suggested, and think carefully about every purchase.

it seems that nearer the end of the month i get i am having to pay for more and more things with the credit card, i know i should just cut it up but it has been the only source of money for things like petrol to get to work and food

Well, stop using the cc. Work on the basis that if you don't have the cash, you can't buy the item. This will focus your mind when it comes to socialising and CDs.

Use a notebook, and write each month the figure you have to spend after bills and loan payments. Every time you spend something, write it down and deduct it from the total. That way, you will see what you have left at any given time.

Hope that helps.

HGLTsuperstar

£150 per month socialising? I didn't spend that as a student, and you're in the real world now. So cut it, and put that £150 to your debts, and use your newly acquired free-timeto get a second job then perhaps you can eat a bit more aswell!

skintchick

Hey! You can eat fine on £60 a month, you just have to actually cook, not buy ready stuff.

poststudentblues

some good advice there guys and gals thanks! the spending diary idea i will definately do! i also got a tax rebate this month for £300 so thats going stright onto the halifax overdraft and then i will pay some of the credit card off!

i think i will set myself a limit per week of what i can afford to spend then withdraw that from the bank, if i run out before the end of the week then i suppose its tough luck!

as for the £150 socialising thats only about 4 nights out! i live in cambridge and tyhe pubs/clubs are stupidly expensive! anyway it must get cut back!

thanks once again :-)

Willsnarf1983

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sarah_elton

poststudentblues wrote:

as for the £150 socialising thats only about 4 nights out! i live in cambridge and tyhe pubs/clubs are stupidly expensive! anyway it must get cut back!

1) Find your local Wetherspoons - ok so not the greatest pubs in the world, but you can have a night out for a tenner.

2) Have friends round yours or go to someone elses. Every Friday night all my friends come to me - we drink, chat, have music, watch DVDs... Whatever.

If you tell your friends your financial situation and that you simply can't afford to go out as much any more, they will understand and they'll be happy to do cheaper things with you. And will also stop giving you grief for staying home (even if only joking, it's annoying) when they do want a big night.

I have a limit of one "big night out" a month.