In Debt At The Age of 19

cal

Sounds like your Mum is the best one to help you stick to the budget. If you have given her the credit cards, do the same with the bank card. When you get paid pay the money from your debts immediately, then divide your monthly spend into 4 parts, get Mum to draw out one-quarter for your weekly spend. When it's gone you will have to stay in (and not pay people to come round). You then will have to stick to your budget.
I am debt free and will stay that way but it takes discipline and hard work, you have to say NO to things you can not afford.
Christmas is a time of peace and joy it is to celebrate the birth of Christ, not a time to spend money. Volunteer to do ALL (and I mean everything) for Mum and Dad on Christmas Day, cooking, washing up etc. This will probably be much better than tacky gifts. If you want to give to others give an I O U, but not for anything you have to buy - say 3 nights of babysitting, or cleaning the car etc. These can be reclaimed in the new year.

Good Luck I will add you to my list of those in need of prayer. God Bless.

Zeldazog

I hope you're not planning on buying gifts for your so-called friends - you've given them enough already! Apologies for sounding harsh, and I am sorry if you feel so lonely that you have to pay people to stay, but honestly these people can see mug written right across your forhead and are taking you for a complete ride.

On a lighter note (!) I would say, along with everyone else, WELL DONE on even realising that you have a debt problem and wanting to get it sorted.

I ended up selling my house and having to move back into rented accomodation (I had to prove that I couldn't afford to stay where I was) because as a single parent working part-time, I could see no other way out. I owed about £7,000 in total. I cleared most of it although my overdraft is still too high, and I still have no savings but I don't have any credit card debt either. Still, it was a harsh way to do it, and I will probably never be able to afford to get back on the property ladder.

DON'T DON'T DON'T get a consolidation loan. I did that once, and that is how I ended up in so much debt. Took a loan to clear a card, still had loan and filled up card, took another card to clear card, filled both up...... A friend of mine (who advised me to do it in the first place!) ended up with far more debt than me, ended up remortgaging and all sorts.

My problem was not being serious about budgeting. I've learned my lesson now, and I don't buy something unless I really need it. I have no credit cards, only a debit card. (I do have 2 store cards, but I'm actually very good and only use them when I really must, and they both have really low limits).

Give all access to spending to your Mum. Ask her to give you "pocket money". She might not be willing to cut your lodgings, possibly because it wouldn't help you anyway, but my guess is she would be willing to help.

Go to your local CAB, you can make an appointment with a debt counsellor (for free) who can help you work out a budget. Again, be totally honest with them,

Something that helped me was to get online access to my bank account. Being able to look at it on a regular basis means that I know if I am close to my overdraft limit, and when to really tighten the reins. Since having access, I have not had anything bounce in 4 years.

Those mobile contracts? Please make sure that you are on minimum line rental on the ones you don't use - you might not be able to escape your contracts, but you might have signed up for a higher lline rental to get that must have handset for free. Most providers will allow you to change your plan after a certain length of time (depends which company you're with).

It could be false economy to cut to the cheapest line rental on the one you do use - its unrealistic to say switch it off and chuck away the sim card, you still have to communicate, but have a look at what you spend your money on, and if you are on the best plan for that. I used to work in a phone store, I couldn't beleive how much some people could actually spend, and often it didn't help because they simply weren't on the best plan for them.

People on here will help you with that, so if your mobile bills are extortionate, post your details and your usage and we'll help you get the best out of your phone. And next time you upgrade/buy/get a new handset, don't give the old one away (no doubt the others went to one of these friends of yours.....)

Good luck with it all, and keep checking with this board, there's plenty of support.

Gabs27

Like others, I would like to say well done for trying sort things out.

If your Mum does help, accept her advice, as she will get fed up if you don't.

I would suggest that when you get paid - allocate certain amounts to various things - so when the budget runs out for enjoying yourself stay in till next pay day etc.

When I first left home (many years ago!), I couldn't afford to go out so got a job in a pub - got paid for having a social life and it really helped.

My 18 year old daughter has left home, she said she was struggling to manage, even though she works full time, she has got an evening job as a waitress and on top of what she gets paid, she gets about £25 a night in tips!!!

Good luck and in the end you are the one who has to take responsibility. Have a nice Christmas but don't waste your money

Butterfly

Hi there, it looks like you have been given lots of great advice here.

Things may seem quite hard for you at the moment, but if you are determined then you will succeed. The only way is forward. Keep your chin up, gather your strength and courage and have some faith in yourself.

You have so many things in your favour which have already been mentioned: you are young, you live at home, you have a great mum who cares alot about you and supports you and you're earning a good salary.

You seem to think that you don't have enough money or enough friends. This is what you call poverty consciousness. We feel afraid because we don't think we have enough of anything....time, money, love, friends....it's all related and it's a very common way to feel. However, you can change this and develop something called abundance consciousness, where you realise that you are actually blessed...with health, good family, food and shelter and you are able to look after yourself financially. Also, I'm sure you do have one or two genuine friends....but maybe they don't seem cool enough for you at the moment? Hang out with these people more, you will find out what true friendship is really about.

You may not think that you're doing a good job, but don't fear, because you are. You just need to boost your self esteem abit and value yourself more. And realise that you are achieving good things.

You are obviously very generous which is why you want to give phones and money to people. But maybe now it's time for you to be generous to yourself. You don't need to feel responsible for other people and feel sorry for them because they don't earn as much money as you. They are responsible for themselves. You don't help them by giving them pocket money. Instead they come to depend on you for extra money and start to expect it everytime they see you. It's almost as if they are like your children! Once you stop giving money to them, they will realise that they need to work harder if they want to have that extra bit of cash and to achieve what you're achieving. Also, you needn't feel guilty if you choose not to give away money anymore. You have to be strong, exercise self control and break the habit of giving your money away. You work hard and you deserve to spend it on yourself and on getting yourself out of debt.

According to my calculations, after your rent (which is very cheap and your mum was right not to reduce it) you have approx £650 disposal income, which is alot of money! This money is for you to spend on whatever you wish and obviously now you wish you spend some of it your paying your debt off steadily.

One thing you must consider is that your £5k debt is actually more, because you are not factoring in the interest you owe. So your real debt figure might be about £7k but that's just a rough guess as it obviously depends on your interests rates.

I know some people aren't keen on consolidation loans, however, I am in favour of them. I have recently got a consolidation loan. I had a credit card and one loan which I paid off and I now just have one monthly repayment of £226 to make. With your disposable income you could also afford to pay this sum off every month. And you'd be left with £100 a week to spend on other things....again, that's a really nice sum to have available to spend.

The only reason why a consolidation loan does not work is if you feel that sense of relief as soon as you've got it and you immediately start debting again. Again, I've been there! A couple of years ago I got a consolidation loan to pay off a loan and an overdraft. As soon as I'd done that I walked out of the bank and got offered my first credit card, which I promptly accepted and racked up another £1,000 debt! That was a year ago when I got to my highest debt.

Since then I have learned (the hard way!), the key is: TO STOP DEBTING

Stop spending borrowed money. You will find this easier than most as your mum has your credit cards. Chop them up. Do it slowly and consciously, you might actually find it fun and it can act as a sign of your commitment to pay off your debt.

All I can say is that having one monthly payment, instead of two or three, is wonderful. My overall debt reduces every single month and I feel like finally I am moving forward. I know that one day in a couple of years, this figure will be £0. You can do this too.

I hope this helps you. You sound like quite a soft person with a good heart but maybe in the past you have been easily lead and influenced by others. I hope you find the courage to honour yourself and move yourself forward. You obviously work hard and you are a proud man. You have alot of potential to succeed in life and I wish you every success on your journey!

Take care, Butterfly xx

Justicia

An excellent first post, Butterfly!

Welcome!

dooglebugg

Hiya,

I have been reading the boards for a while but have only now decided to post. Well done for admitting you have a debt problem. When I was 19 I didn't really worry about spending money so I wish I had opened my eyes to it then more so I wouldn't have had to struggle so much to get on the property ladder and been so skint ever since. Trust me if you can nip this in the bud now then you will reap the rewards later on.

I am 25 now and owe around £6.5k which is everything I owe including my car, credit cards and money to my parents (£1000 which I don't think they want back but i am going to return it). I know there are people out there who owe a lot more including my own brother and sister but this amount scares me and I want to reduce it asap.

I think my debt at its highest point was about £8k. My worst mistake was getting a loan to pay off debts and then racking the money straight back up again on credit cards. I have since had to wise up because when you own a house you can't just ignore bills!

I now have a full time job and two part time/ casual jobs and go to college one night a week as I hope that when I graduate with a masters level in 2007 I will have increased my earnings. It is hard work but a means to an end as I want to reach a stage where I can afford to buy clothes again or go out for meals etc without running into debt.

If you have the determination and the will to make changes to the way you manage your money/ lifestyle, the debt will shift. Mine has been a slow process but I am getting there. Ditch those freeloaders, stop giving stuff away and take the advice from this website. With your current outgoings you can get there a lot quicker than me so best of luck to you.

dcampbell86

Thanks, Butterfly, that advise has really boosted me.

The idea of getting a consolidation loan and just paying one payment every month sounds brilliant and an easier way to get out of debt!

The thingn is though - because I have missed payments in previous months and applied for far too many loans, I might not get a consolidation loan.

Do you recommend anywhere to get these loans?

Where did you go for yours?


Thanks again
David

inmypocketnottheirs

dcampbell - please read this very carefully!

Please, please, please do not get a consolidation loan. You will end up paying more interest over a longer period of time.

A lot of people take a consolidation loan, pay up their credit cards, then in a few months time they use the cards and are back up to the limit.

At the risk of repeating myself, do not get a consolidation loan. You will increase your agony and stay in debt longer.

Sorry to be so harsh mate, but I don't want you to make the same mistakes as I have. True wisdom is learning from the mistakes of others!!

Plus, do not be harsh on yourself for getting into this situation, it is all part of life experience. This brush with debt hopefully will keep you on the straight and narrow.

Please just don't borrow more money, use all your disposable income to pay off the most expensive debt and keep going until they are all cleared.

Howabout instead of having mates round at weekends, getting a saturday night job in a bar or a club, and using that money to throw at your debts.

Hope this helps

P.S. Did I say, don't under any circulstances get a consolidation loan!?!?!

tigger115

Just logged on before I head off to bed with flu (feeling very sorry for myself!) - wanted to agree with the last post - please do not get a consolidation loan - I've made that mistake twice - the first time being when I was 10 years older than you are now. I realise not everyone is the same but I know more people who have got themselves in a worse position after a consolidation loan than those who haven't - come to think of it I don't know anyone who got a consolidation loan and then didn't accumulate more debt. Its far too easy to get complacent paying 1 loan off and then a few months after thinking i will just bang that on the credit card i can afford that etc - and then it slowly creeps up.

Just wanted to say well done for facing up to your debt at such a young age - you are in a great position (although you probably won't think it now)- you live at home and when you have paid off your debts - then you can reap the rewards - you have your whole life in front of you.

Good luck and good night x

smileyt_2

Hi I'm new on here but have read this entire thread. I used to do voluntary work for the CAB and be a debt advisor. They can be really helpful in looking at your budgets and negotiating with creditors. BUT you have to be honest with them. They will write out a budget with you and help you work out what to pay. DO NOT PAY FOR DEBT ADVICE FROM ANY 'COMMERCIAL' COMPANY! Alternatively your local Council may have an advice/debt counselling service.

When you have cleared your debt you can make a donation to your local CAB for their help, if you can afford to - it will be appreciated!

I agree with everyone else on here - ditch these 'mates'. Or send them round to me and I will give them a piece of my mind for you!

If it's any inspiration to you - I earn approx £10,000 per year, but run my own house and two dogs. There's no money for luxuries but we get by OK. So work out your priorities and stick to them, and you will have a great future ahead for learning about money early on. Money's great but you have to learn to manage it, not let it manage you!

Here endeth the lecture, sorry if I've gone on. Good luck, you can do it!!