Time to take my head out of the sand!

Shinji_2

I've been looking at loans to sort this out...

There are a few places doing 5.6% and if I got a loan for 25k and another for 5k, I could clear all my cards for pretty much the same monthly amount as I've got to use... This is over 5 years.

Equifax reckon's I've got an "Excellent" credit score, so might this me a way out of it, assuming I cut up and cancel all of my cards and make DAMNED sure I don't apply for any further credit in the future and be very strict with my budget?

In_Search_Of_Me

Hi Shinji and welcome back...I agree with Ali that you need to start keeping a spending diary & need to address why you are spending...I would beware taking out a loan & am unsure whether you would get 30,000 of personal loans anyway...the problem with doing that (as I did!!) is that you consolidate without reducing your spending so just end up even more in debt & it wil eventually get to the point when you'll be well & truely stuffed & will have to go bankrupt which I assume will mean that you would loose your job? Please really have a blackpool style lightbulb moment now before its too late...bug hugs...

Bloke_with_a_simple_life

Shinji

Radical surgery needed to your outlook - I seem to pick up
1. you are spending £5000 per annum over your earnings
2. you are living with parent(s) and have minimal overheads and responibilities
3. you have looked at the situaiton before, but not addressed you real issues with spending.
4. You have don't have bad earnings but need £4000 per year from your mum to help you out.


Initial ideas:
1. Post your full SOA on this page - not just your debts - and get ideas from guys on here on how to cut back your spending/luxuries. Although you have a £766 "approved" budget - I genuinely don't think you need to spend that much, given that you have minimal overheads.
2. Stop spending money on needless stuff - focus in on your responsiblities by stopping taking money from your mother and start paying housekeeping to her. This is being responsible.
3 . It shouldn't be too tight to fix - you don't appear to be in arrears, have debt collection agencies chasing you, you are single, no kids or responisiblities etc. Just a bit of life style changes which should remove some of the unnecessary material items, but increase the quality of your life by focussing in on what is important and key to you.

Lastly - focus in getting to the point of being able to save up for a house/flat and affording a mortgage. Wanting a new car at the end of this is fancyful. LIving in your own place is more important in my opinion.


Good luck!

Shinji_2

Phone 40
I can't go any lower than that on my contract

Fuel 195
This really is how much fuel I use per month

Insurance 80
This is car and home contents insurance... Both the lowest I could find

Car Tax 10
Diesel with low emmissions!

Servicing 25
I have a modern car that requires servicing every 10k to retain the warranty... I don't have it serviced at a main dealer, so much cheaper

Tyres 20
Due to the milage I do per year, I need a couple of sets of front tyres per year

Parking 45
Unavoidable as I live in the countryside and have to drive to work

Rent 150
Rent goes to my Mum

Food 135
Help out with the food shopping and also food for work

Pets 5
Filter for my fish tank and some food for them

Clothing 20
I think this is a fair amount

Magazine 4
My one luxury!

Dental 5
Annual checkup and putting some aside in case of filling required etc.

Prescription 7
On long-term medication, so unavoidable

Emergencies 10
Not sure what good a tenner a month would do in an emergency, but there we go!

Entertaiment 15
Meh, this is what CCCS reckon is the maximum monthly for "entertaining" ones self!

TOTAL 766

I've not been taking any money off my Mum up until now, I've just been getting worse in debt because I've never budgeted for the above and also I've been buying stupid stuff...

The above is everything I can think of that I need to pay for monthly (Anything annual has been divided by 12)

This is indeed my blackpool/vegas/matlock bath illuminations moment!! I know I've got to stop spending and start budgeting now, so I've got that message!

Can anyone now give me some advice re: what to do with my actual debt please

Let_Robinson_Sing

Shinji wrote:

Phone 40
Fuel 195
Insurance 80
Car Tax 10
Servicing 25
Tyres 20
Parking 45
Rent 150
Food 135
Pets 5
Clothing 20
Magazine 4
Dental 5
Prescription 7
Emergencies 10
Entertaiment 15
TOTAL 766

I've not been taking any money off my Mum up until now, I've just been getting worse in debt.

The above is everything I can think of that I need to pay for monthly (Anything annual has been divided by 12)

This is indeed my blackpool/vegas/matlock bath illuminations moment!!!

Hmm.

From my experience, I know that creditors wont take kindly to the magazines and entertainment. They will also need to know if the phone is a landline or mobile, If you have only got a mobile then £40 is a borderline amount just becareful with naming things that can be classed as a 'luxury item'

Shinji_2

Thanks for the info L_R_S...

It is a mobile and CCCS reckoned 1 magazine and £15 a month were acceptable, however I'm now wanting to pay my Credit Card Debt off myself rather than going on a DMP or making reduced payments, as I want to retain my good credit rating for the future so I won't have any problems getting a mortgage when this is all finally paid off...

I'm still going to stick rigidly (sp?) to the budget they have worked out with me, so have £573 a month to pay off £29500... What I need to know is:

Is this a realistic amount to be able to pay it off with?

in*the*red_6

Shinji wrote:

Thanks for the info L_R_S...

It is a mobile and CCCS reckoned 1 magazine and £15 a month were acceptable, however I'm now wanting to pay my Credit Card Debt off myself rather than going on a DMP or making reduced payments, as I want to retain my good credit rating for the future so I won't have any problems getting a mortgage when this is all finally paid off...

I'm still going to stick rigidly (sp?) to the budget they have worked out with me, so have £573 a month to pay off £29500... What I need to know is:

Is this a realistic amount to be able to pay it off with?

Shinji

The snowball calculator will tell you this, as per Southern Scouser's post.

Rgds

ITR

Bloke_with_a_simple_life

Hello shinji

ok... good start .. now some more detail and difficult stuff..

Question - £135 per month on food... is this just for you? If it is, seems an area for cut back. Where do you buy your food? does it include "eating out/takeaways/pre-made lunches" etc? If so, then there are some luxuries in here.

Car Insurance and contents at £1000 per annum? What type of car do you have? Have you shopped around for insurance as recommended at http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1092813037,41960,

May be that your car is a "luxury" too, and time to get a bit basic with your car - smaller engine etc may lead to smaller engine, better fuel consumption, lower petrol bills and lower insurance bills. £195 seems a bit high - how far away is work?? Is Public transport and walking really not an option, or just one which is just inconvenient? Is it possible to sell your car and down grade? IS your loan a HP arrangement or one independent of the purchase?

Consider over time and getting a 2nd part time job. How much more income can you generate in yuor free time, which will not impact on your ability to do your full time job to the fullest of your capability?

As for repayments - you are only aiming to repay 1.94% of your Current balances every month - quite frankly not enough. Let's assume that you incur an average monthly interest rate of say 1.4% (approx 17% APR), that means that only .5% is repaying the balance. THerefore, it will take approximately 200 months or 16 years to pay off your debts.

Unless you aim for 3% of your current total outstanding balances, stop using the cards and paying off the higher rates first, I think you will be waving good bye to everything, and forget about the mortgage in a few years. That is why you have to take radical surgery on your outgoings or, if possible, doing overtime or getting a 2nd part time job.

Anyone else with any advice?

lynzpower

the other thing Im noticeing is that you are paying buildings & contents insurance when you are living with your folks? Why is this?

Also, how much is your car worth. If you are wanting to get out of debt with out the DMP, time to sell anything thats not nailed down im afiraid, or part time job as welll as what you are doing and so on. time to get serious in my opinion.

It can be done. there are people on here earning less than you, but getting out of debt at the rate of knots. Have a look at ehallets "can I clear a debt a month" or look at jamie dodger and what she is managing to do. All it takes is will. And living on what you NEED rather than what you WANT. You will not die from not having magazines for example. theres an extra 4 quid a month to pay off your debts with. Every newspaper, chewing gum etc is costing you not only the 30p what you pay for it, you are paying interest on it as you have debts.

If you are serious at getting out of debt this time, then actions speak louder than words. Nothing is impossible.