What should we do about this??

zeddy_2

Hi,

I have been reading lots recently on how other people are dealing with their debt problems. Mine is very much something that is 'on my mind' every day and is something that is really becoming unmanageable. The background to the debt is really that my partner and I have both been in and out of regular work for the last 2 years, since finishing university and moving house twice. Although our wages are not bad for someone of our age I guess, we are always struggling to find money to pay bills and it just seems like we never get to treat ourselves to anything. My partner is feeling very very down about it all now and so I thought I would speak to people on here to try and get some advice from people who seem to know what they are talking about.

Now onto the debt and where it's at! I've tried to work this out to as an exact amount as possible, but as we are both paid by the hour then things can alter slightly each month: (This is all based on monthly payments etc)

What we bring home;
Me - 1185
Him - 1450

Total - 1565

What we spend;
Rent - £700
Council tax - two payments of £240 each in December and January and then it will revert back to monthly payments of around £120 (We are in arrears with them, which is why these payments are so high)
Electricity / Gas - £30
Food - £200
TV - £11
Telephone (landline) - £13
Broadband - £15
Mobiles - £35
Petrol - £250
Going out / entertainment / take aways etc - £100
Other things lumped together (inc. car tax/MOT/insurance, presents for birthdays Christmas etc, holidays, household goods etc) - approx £440
Credit card bills monthly payments: £237

Total - 2021

What we owe; mainly what we owe is credit cards (or should I say debt cards?) and we are paying the minimum amount each month at the moment in general.
My Egg card - £1500 - 0% for about 2 more months (minimum payment around £45)
His Egg card - £1700 - 0% for about 6 more months (minimum payment around £50)
My Barclaycard - £200 - 17.9% (minimum payment around £7)
His Barclaycard - £1000 - 17.9% (minimum payment around £60)
MBNA - £1800 - 15.9% (Minimum payment around £45)
Halifax - £1400 - 0% about 10 months remaining. (Minimum payment around £30)
My overdraft - £1200 - 14.6% (Not ever paying anything back as everything goes out each month)
His overdraft - £1250 0% for one more year. (Not ever paying anything back as everything goes out each month)

Total owed - 10050

Anyway, our debt is all combined really as we tend to just use space where ever we find it as it were, but we have had to get the cards whenever one of us was in work, which is why we have duplicate cards and things. Also any of the remaining money, well it goes off the cards, but the thing is we haven't had any remaining money as yet, because this will be the first month where we are both actually working and being paid! (For about six months or so).

Can anyone please advise me on what we should be doing to get this debt completely cleared and what we should be paying off first? Roughly how long do people think it will take for us to pay this off too, because maybe if we have a plan we can both feel a bit better about things and see that there is a way forward and we do have a future.

Thank you so much for taking the time to read through all of this and for any answers that you might be able to offer, it is very much appreciated.

FrankieM

I've got you income as £2635.
Is that right or have I missed something?

skintchick

I make it that as well.

And you spend £100 a month on treats, it seems.

Please confirm your income figure

ms_london

Hi and welcome to the Boards.

You have most definately come to the right place, although a lot of people will be rushing off home now (me included, yippee!!!).

The first thing is acknowledging how much debt you are actually in, and secondly wanting to do something about it.

On the bright side, come January, because you wont be paying back CT arrears you will have an "extra" £120 a month which will go along way...

"Other things lumped together (inc. car tax/MOT/insurance, presents for birthdays Christmas etc, holidays, household goods etc) - approx £440"

Could you please list EXACTLY what this amount entails, and for what amount? It might be the case that instead of putting say £50 a month towards birthdays/xmas, you may only be able to afford £20 or the such like.

Also, £200 on food for two people is a lot - check out the OldStyle Board for ways to trim back your grocery budget, its about meal planning & being organised, taking food into work for lunch rather than buying etc etc.

You need to clear the debts which arent on 0% first - this way you will be saving yourself the most money. Could you balance transfer any more of your cards onto 0%?

You are both on a good wage, and your debts arent that high, although I can appreciate it is still debt and still a worry, so you can sort it out. It just takes a bit of while to undo all of the bad habits you have learnt, which we all do over time!!

Use this board and make money saving fun. Use the discount vouchers where you can for shopping, shop around for the best deals, do "free" things at weekends - having fun isnt about spending money!!! Infact a lot of people, me included, are addicted to Money Saving!!!!

Ive gotta go now, but I am sure lots of other helpful people will be along soon, otherwise we will be back to help on Monday, have a good weekend and congratulations on making the first step - thats always the hardest!!

Ms_London

johannamse

Just a quick idea....to show you how quickly things can change...IF YOU WANT THEM TO.

1. Half the 440 lump (go without holidays, presents etc) to £220
2. 2635 income - your current outgoings = £614
3. £237 min payments that you pay already.

= 220 + 614 + 237 = 1071 per month

Total owed = 10050.

You could be debt free in 10 months!!

OK...I know I know, I havn't taken into account interest etc, but I just wanted to show you what can be done, but just making a few changes.

You need to GET INFORMED. Get all you debts in a spreadsheet (with all the APR's), and then plan what your going to pay off from where each month.

It would be good if you could move some of the more expensive debt to 0%, but you are not doing too badly at the mo.

You have all the tools at your disposal (good income, good credit score, and not unmanageable debt) it is up to you whether you want to get out of this asap (just imagine, this time next year, in the run up to xmas, you could be debt free...), or whether you want to continue living month by month, with the debt steadily increasing??

If your partner is feeling depressed, get them on mse.com and show them this thread. You have a whole weekend to learn and learn some more, and to start planning how your going to get debt free, and even finding out when you debt free could be. GO FOR IT!

southernscouser

Hi there. It seems you have quite a bit to throw at the debts. The important thing is to throw the most money at the debt with the highest APR. From what you have submitted that is the Barclaycards.

What is your credit rating like? Could you apply for a new 0% card or one with a low life of balance APR?

Have a look at this Snowball calculator. You type in what your debts are, the APR and how much you can afford to pay off per month. It then calculates how much you should pay each one and what would happen if you put £XX more towards the payments. It also gives you a debt free date!

http://www.whatsthecost.co.uk/snowball.aspx

sleepless_saver

is the £250 a month for petrol right? in my car that would be over well over 2000 miles per month.

BWZN93

I know - £250 a month for petrol is £3k a year!! Get a bus/train ticket!! The cost for me to run a car was massive in comparison to the bus (and its quicker) so that has to be drastically reduced. me and my other half spend £30 per month on petrol tops.

Secondly - £200 per month for food is a little high - id look at the moneysaving oldstyle board to reduce that - I feed myself, the OH and the cat on approx £120 a month including lunches for work.

P.S - please dont read my post to be a dig at you in any way, to me those were the most obvious things that could be cut painlessly and easily :-)

Jo xx

tomstickland

It's all about cutting out unecessary expenditure. What you deem as unecessary will depend on how badly you want to clear the debts. When I was clearing debt I reasoned that having a roof over my head and food to eat was all that I really needed, so I threw pretty much all of my money at debt clearing.

Anyway, this is all about making changes. You really do have to make a step change for 12-18 months and make progress on clearing or reducing this debt. Once you start taking some chunks out of it you will feel a whole lot better.

Where do you live? £700 pcm is quite a large amount.

johannamse

tomstickland wrote:

Where do you live? £700 pcm is quite a large amount.

It's not if he lives in the south east or London! It's quite cheap.

zeddy_2

Hi,

Thank you all to your kind words and advise so far. I will answer some of the questions that people wanted confirming. Sorry, (as is quite clear), maths isn't my strong point! Yes our take home salary each month is me - 1200 (ish sometimes a little more than that, sometimes a little less), him - 1400 (ish). Also we had a bit of a shock at the weekend, because this month was the first month that my boyf was paid in his new job, the company hasn't given him a pay slip and they told him he would be paid on the Thursday of last week. However, he didn't receive the pay until Saturday morning and it was a couple of hundred pounds less than we expected. Obviously with no pay slip we don't know why this would be and the company said this morning that they can't send him a pay slip or anything until Wednesday because that's the day their accounts lady comes in! Anyway that is by the by really, but all it says for this is that we are still unsure of what my boyf will bring home exactly every month in this job at the moment. The £1400 is what we think it should be roughly after tax.

Other than that I'm not sure if we are able to get any more credit cards. I will try for one again soon. Recently we have been refused a couple of times, but I think this might mainly be because we have moved twice in the last year. I'm not sure if our credit rating is that good or not. We have made a few late payments on come cards earlier this year, but we did buy a sofa on HP and finished paying that off earlier this year. All payments were made on time and in full, so that should look good. We've also been late with the rent for 2 months in a row just recently, but we are not in any arrears with them. We owe the council tax and TV license people arrears because payments didn't go through due to insufficient funds in the account when they tried to take the money out. However, we have the money for all the bills for the next month nearly covered already and there are two weeks before our rent is due, so we are looking good for this month! (Don't want to tempt fate though!)

We do buy things very tightly. I rounded the food up to £200 a month, but usually it is more like £35-45 a week, sometimes it goes to £50 if I have to buy a lot of things for the house and things that week. I include everything like groceries, makeup, moisturisers, cleaning products, shampoo etc etc in the food budget too, which is why it is sometimes higher than other peoples. With regards to presents, I think we will have to cut down even more than we have. I feel tight as it is (we generally spend £2-4 on our nieces and nephew)! We have a large family between us and there are lots of people that are necessary to buy for. We say to lots of people, don't buy for us and we won't buy for you, because it was getting ridiculous. Hopefully we will be able to sell a couple of possessions this Christmas to pay for the presents and things, which will help out there.

The reason we spend so much on petrol is because my partner lives 35 miles away from work, which is obviously 280 miles a week, just going to and from work. We also live about 50 miles away from our family (we moved down to where we are for work), which obviously adds up when we go and visit them. None of our friends live in the area where we live either, so if we ever go out then we have to travel a way to see anyone. Unfortunately we both require a car to get to and from work because we work in opposite directions to one another and different hours. Also we are kind of in the middle of nowhere where we live and the nearest train station is about five miles away (in the wrong direction to work), so I don't think it is worth using the train. Also the local bus is a way a way from us again and it take around an hour to get to work, which is only a twenty minute drive away for me.

I keep thinking there must be areas we can cut back on and I think it is going to mean a big lifestyle change for us. But I just wanted to say thank you for encouraging and advising as you have. To know that we could be out of all of this in ten months is very reassuring (although obviously I wish I could click my fingers and it's all gone!) and it gives us something to really aim for. I will definitely try that recommended website and see what they say about who we should pay back what each month. If I have a set amount to pay someone then I will know what I need to spend and that would really help me.

I think this website is brilliant and it offers some really fantastic advice from everything I have seen so far. Thanks for the welcoming too!

Now off to that website!....