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Cant believe its gotten this bad..advice appreciated..

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Hello anyone and everyone...

Things must be bad for me to be here right? Please bear with me...

Anyone with any tips on the best strategy to get myself out of the red?

Basically, this evening I have worked out that (student loans aside) I currently sit in £11,642.01 worth of debt.
The penny made me smile. The rest didnt.

I have a decent full time job, on £25k and I just think I have to admit, I am totally rubbish with money..

This sum is spread between a car, and credit cards, and a current account...
Welcome to my finances; they currently look like this:

Egg card (high apr) £-1278.55
Halifax card (high apr) £-1233.22
Virgin Visa (no apr) £-3246.24

Current account overdraft (sizable apr) £ -2100

Car (high apr) (over the next 2 years) £-3784.00

Ive been to this site before, tried to be a credit-card-tart, but now things are just getting out of hand; I havent been able to pay my rent this month as I'm always hitting the top end of my overdraft limit (and then going over it and getting charged £60 every month).

I spoke to my landlord about this and he reckoned I should consolidate the lot with an unsecured loan, cut up the credit cards, stop the overdraft and pay off the car...

Does this sound intelligable?

I am aware to that I should cut down on the boozing, the trips away the hotels and everything else that makes life enjoyable!

I take home around £1500 at the end of the month, thats not terrible at all...yet I'm always skint...

anyone anyone anyone?
thankyou thankyou thankyou

James
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Comments

  • tomstickland
    tomstickland Posts: 19,538 Forumite
    10,000 Posts Combo Breaker
    Consolidation just appears simple, but it doesn't really change the fact that you've got to pay the money back. Personally I wouldn't bother changing. Get started on the paying off bit.

    Your position is not too bad - you have a decent income. You can reduce that debt.

    Here's my thoughts:
    -Prioritise your payments. The bank hitting the OD limit is no1 priority. Next up is the highest APR loan. See if you can move as much as possible to the lowest APR loan/OD that you have.

    -You need to start saving. Saving means not spending money. Not spending means not spending money. I estimate that you received £1500 per month after tax. [edit: I've just seen that you say that, not a bad guess then]Rent is probably £500? Other things probably take £500. So you should have at least £500 per month to pay off debts. So that gives you around 24 months to pay it all back. 2 years.

    -Organisation. Start a spreadsheet of all your (im)balances and update it daily. Watch how the money goes out each month. Once you know how much you have or don't have then you'll be able to make decisions.

    -Finally, how much is your car worth? Look up its value in Parkers guide. Consider going to buy a much cheaper car or motorbike. For example, £400 on a 12 month MOTd car, or £1K on a boring but reliable car. For example, totally sound VAG group Skodas lose their value like a stone because of the name, despite being a VW car in drag.

    -I went through a very similar experience 3 years ago when I realised that I was £7K in debt and it was all from just being a bit lazy with money. I also earnt a good salary. It took me 2 years to clear the debt, but I did continue to spend money on car tuning and mountain bikes during that two years. But I did vow to clear the debt, and as a result I curtailed wanton expenditure. For example, if you go out to town for a night you can clear £50-80 without even trying. Compare that with 24 bottles of decent lager from Majestic Wine !!!!!house costing £17. A week of beer for £17 versus one night for £50. Once you start to look you'll see all sorts of places where money is wasted.

    So, don't be down, your situation is toally rescueable, but don't just slide along still being in debt.
    Happy chappy
  • Hi James,

    All is not lost. You can get out of this, but (your not going to like this), you have to make some MAJOR changes. There is no magic solution and the quicker you learn this, the happier you will be (believe me).

    I believe your Landlord is wrong. The problem is not (totally) where you debts are, but that you overspend. You basically need to spend less.

    You have done quite well, with the information you have given us, but it is incomplete. PLease can you post credit card limits and min payments.

    You then need to list your outgoings. EVERYTHING that is fixed, and then an extimate of what you spend on cloothes/ going out etc. Try to be honest and as exact as you can be.

    With your income you should not be sturggleing to pay your rent, you are just disorganised and you spend too much.

    Do not fear, we will help you sort yourself out, and I promise that if you really want to change and put the effort in, in a few months time you will be in control paying the debt back (instead of increasing it) and will have a bright and rosy future.

    Please post back.
  • tomstickland
    tomstickland Posts: 19,538 Forumite
    10,000 Posts Combo Breaker
    My stages were...
    -very poor student
    -first job and reasonably well paid, big novelty.
    -second job, much better paid, attitude was "I work hard, live for today, don't worry about money"
    -took out credit card, intending to always pay it off
    -spent too much on car parts
    -took out £2.5K loan to pay for car respray
    -lost interest in money
    -realised I owed £7K and felt a sense of dread
    -got on with paying it back, a bit boring a first
    -started to feel much more in control and happy as I made progress
    -realised how easy sorting it out was
    -cleared debt
    -became very smug
    -started saving
    -found MSE web site
    Happy chappy
  • Hello and thankyou...

    What a fantastic service! Replies in 10 mins!

    Ok here goes:

    Egg card (18.9% thats a guess) £-1278.55 Limit £4000 paying back the minimum everymonth, which usually doesnt see the amount shift

    Halifax card (22% I think) £-1233.22 Limit £1250 (they curtailed it after a late payment!) paying minmium..it goes down by about £2 a month!

    Virgin Visa (no apr) £-3246.24 Limit £4000. Paying back £100 a month...Its still at 0% until december...I am trying to be a tart and sort out a new natwest card and transfer the balanceon this as it soon goes up massivley

    Current account overdraft (not sure of the apr though it gets charged £20 for the priviledge of being this far in the hole, and £50/month if I go over the limit...which happens every month) £ -2100 Thats the limit

    Car (er, damn..not too sure, think its abou 8%) (over the next 2 years) £-3784.00...it costs £143 a month.

    Ok heres the expenditure (per month) ...good guess on the £1500 a month!

    Rent £390 Bills and council tax included (good eh?!)
    Car £143
    Car insurance £45
    Food (guess) £100
    Phone £45
    House insuran £12
    Internet £5
    Social £400
    Virgin repay £100
    egg/halifax £50
    hsbc charges £50

    well that comes to £1340 suggesting I should have £160 to put towards some debt!...but just doesnt seem to be the case...

    This was quite accurate based on my last statement...Any extra money spent I guess would have to go in the socialising bit...oh dear..

    As for my car, thats become a bit of a millstone...I sort of need it (its dead reliable and impresses the lady)...

    If I sold it, (its probably only worth £3k) I'm not sure I could even settle the remaining debt on that...?

    Thanking you in advance, was a great tip about sorting the current account and prioritising...


    James
  • If social is your "going out" money thats the first thing cut down!
  • wigginsmum
    wigginsmum Posts: 4,150 Forumite
    Phone £45 - is this for a mobile? If so and you're out of contract, consider getting a pay-as-you-go SIM card and using it less.

    I'm with Egg and they're currently charging 15.9% APR. Do double-check the Halifax rate - 22% is extortionate.

    Social life - cut back; that's where your easiest saving will come from.

    I echo what's been said about the spreadsheet - you should be able to calculate expected interest charges each month with a basic formula, and plot over the next couple of years what you'll repay each month. Concentrate on the highest APR first and snowball it, throwing every bit of spare cash at it you have.

    http://www.whatsthecost.com/snowball.aspx

    Do you have anything you could sell on Ebay? I recently cleared out all my MAC make-up which was sitting there unused and made £4200 in a month!

    I've been down the consolidation loan route at least 3 times over the past decade, and ended up each time with a big loan AND the creditcard balances right up again, so beware of doing that. You're in this for the long haul - there are no quick fixes, I'm afraid (or I'd've used them myself!) The hardest thing is the mental commitment - having that 'lightbulb moment' and realising it isn't going to get sorted without some serious reshuffling of priorities.

    Jules
    The ability of skinny old ladies to carry huge loads is phenomenal. An ant can carry one hundred times its own weight, but there is no known limit to the lifting power of the average tiny eighty-year-old Spanish peasant grandmother.
  • Thankyou so much guys! Keep 'em coming! I love hearing about that people have it worse off than me ;)
    I'm getting on ebay....
  • wigginsmum
    wigginsmum Posts: 4,150 Forumite
    Consider carrying a little notebook with you and writing down every penny you spend, even if it's for a can of Coke. It's surprising how it all mounts up. Get £30 out of a cashpoint and it's gone in a puff of smoke ...

    Jules
    The ability of skinny old ladies to carry huge loads is phenomenal. An ant can carry one hundred times its own weight, but there is no known limit to the lifting power of the average tiny eighty-year-old Spanish peasant grandmother.
  • ms_london
    ms_london Posts: 2,852 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Hey.

    I paid off the last installment of my £19,000 debt on the 27th October, and managed to clear £10,000 of that this year (it was a NY resolution I had made to myself and managed to stick to!) - and I was up until recently only on a wage of £20,000, which meant I had to work two jobs :0(

    If you could find out exactly what the APR's are on your cards/loans etc that would be a start? I have been living on a budget of £50 a week, including food, and it was tough, but it can be done, and your debt isnt too high, so it could be paid off as quickly or as slowly as you like, it depends on what you want from your future and what you want to do in the next few years. I wanted to go travelling and the debt was holding me back, so wanted to pay it off as soon as I could.

    Even if you trimmed your social money to £300, but to include food, that will still give you £200 extra to throw at your debts!!
  • tomstickland
    tomstickland Posts: 19,538 Forumite
    10,000 Posts Combo Breaker
    Really go to town on the Ebay thing. Look for items that you don't need. Photo them and stick them on for low starting prices and let them find their own level.
    Happy chappy
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