Newbee... and of course in debt!!!

K9cuddles

Just thought I'd join this forum! I've spent most of the day trying to digest all the info stored on here and the site and it's bloodly amazing!!!

Okay my story... started getting in to debt at uni, was used to grants and of course took the student loan even though I didn't need it!! Then the credit cards and then I got a car and it kinda snowballed.

Well I was fed up about worrying about my life and money, when I had the "light bulb" moment! So.. since about Oct this year I've made it my New Years resolution to get out of debt and get some savings behind me!! So I made up a spreadsheet (if only I have found this site sooner that would of been easy with the free template!!) and I'm getting totally obsessed with looking at it!! Waiting for the figures to change and I've not even paid a bill!!.

Anyways.. it wasn't til I put it in writing that I realised I was 29.5k in debt!!! It was the first time I had seen that in writing (hasn't helped that I brought a 17k car on finance - but I like my cars so that's my treat (at any cost!)). I'm mainly concerned about my overdrafts and credit cards which = about £6k (exc interest!). So my aims are to get all credit cards sorted for this time next year 3k and the rest the following (but I do tend to come in to lump sum money i.e bonus' etc so it could be sooner!).

I'm 23 still living with the rents and can't wait to move out. Obviously that's not gonna happen with my debt.. hence my light bulb moment! I've been doing stacks of overtime, but after 2 months it's wearing thin, so thought about making my money work for me, and by god I've found soooooo many answers on this website!! So much of it is common sense but when you see it in print it really does dawn on you!

So I guess I'll be sticking round here for abit!!! and of course start my credit card shuffling asap!!!

Sara

musicboy

Good for you, Sarz .... put your complete list of outgoings on here if you don't mind then those in the know will suggest more stuff for ya,

Muze xx

K9cuddles

Here goes:

Dec:
Amicus Subs £4.42
Rent or Mortgage £115.00
Contact Lenses £11.00
Internet Acess £40.00
Car Insurance/Parking/Fuel £107.00
Car Finance £308.75
Food & Groceries (not dining out) £39.00
Clothing (necessary) £8.36
Mobile Phone £10.00
Overdraft & Charges £153.00
Student Loans £74.00
Credit Card : Monument £30.00 (min)
Credit Card : Mint £30.00 (min)
Credit Card : Barclaycard £161.00 (extra £150)
Credit Card: Citi Cards (Mum) £40.00 (just above min)
Empress Finance £33.00
Dog Account £45.00

Is is where I waste money:

Car Repairs/Mods £25.00
Dining Out £10.00
Entertainment £60.00
Clothing (above what's needed) £42.84
Computer Costs £21.98
Presents (Xmas, Birthday) £13.20
Ebay £10.22
Treats £26.00
Other expenses i.e Cash £69.00

I am saving too and I know you shouldn't when in debt, but most is employment based so they normally double your investment etc so a good deal. Saying that I've only got £585 as assets!!!

tomstickland

Well done on getting everything in perspective, lightbulb moment and all that.

Re the car, I assure you that you can still have a lot of fun for a fraction of £17K. So if you car is now worth more than £7K I'd say consider selling it and moving to something cheaper but still fun until you wind the debt in. The faster you pay off debts then the less impact interest has, and selling assetts is the quickest way of releasing cash.

Also can you add the numbers up in your spreadsheet to work out how much spare you have per month for debt paying.

Other advice is to shuffle debts to maximise the low APR debts and then concentrate on paying off highest APR debts first, or moving them to 0% credit cards etc.

K9cuddles

TBH.. the car has to stay! I only got it in July!! and it's my pride and joy and most of all my pleasure! I don't smoke/drink and don't go out out that much any more so I think it's worth it's happy factor!

Yes. my spreadsheet works out how much I'll have spare.. but you see I look at that and see it as money I can SPEND!!! Hence I start taking more and more cash out the later in the month and I know I shouldn't!

It's not worth me selling assets as most are shares and wil inccur Tax and NI and dealing fees etc. So I'm leaving that as long term investment, I have just set up an ISA, but it's only a tenner a month and TBH more chance of me spending that tenner at the work canteen then adding it to to pay off a bill (I know I shouldn't.. but I just feel comforted with having a bit of savings).

Yes.. I've seen the light with the high APR so will sort that out asap!!

Tim_L

You can't afford a 17K car, bluntly. Sell it and buy a runabout - you can get a perfectly decent nearly new car for 4-5K maximum. Use the proceeds to get rid of your most expensive debts first. 17K is not a treat, it is not a justifiable luxury, it is a a disasterous self indulgence. You will not get out of debt until you get clear of the idea that something so obviously out of kilter with your means is acceptable. Sorry to be harsh, but you need to know this.

Why not do what I do: drive a cheap car, and when you want something decent just hire it for a weekend (you can get excellent deals over weekends, especially if you have an airport nearby as they tend to upgrade you free when the business travellers aren't using the cars). Having a small car will save you insurance and petrol too: you are really just pouring money down the toilet with your current car strategy.

You should be prioritising payments of debt rather than saving. Credit card debt will kill you, because it is at such high rates. If you can shift it to a low lifetime of balance rate then do it as soon as you can. I'd try to keep accessible savings of around £500 for emergencies, but past this point you need to pay debt off. The only reason for saving rather than paying debt is if you can earn more in savings rates than it costs you (effectively borrowing money to invest).

Internet access at £40 a month is expensive - mine is £17.99 for broadband (Wanadoo). The Dog account I don't understand but it is a lot of money in relation to your debt repayments. I don't see much that is too alarming in the rest of your spending - it seems that outside the car problem you're reasonably sensible about other things.

You do also need to give some idea of income to see how far beyond your means you're living. But lose the car, stick to the fundamentals, and you will get out of debt. Stick your head in the sand and drive around like a high roller, and you won't. Your choice, at the end of the day.

ffym

Hi S_a_r-a,
the first things that jump out at me are your credit cards and internet costs. £40 per month for internet access is extremely high, even for a decent broadband service you should only be paying £20 - £30, for an economy deal you should expect to pay less than that! For the best credit card deals you should check Martins recomendations. If you can pay back quickly or or are prepared to juggle cards get a interest free "balance transfer" card. If you want to pay back over a longer term get a low interest for life balance transfer card. Whatever you chose don't be afraid to change - go for it, plenty of advice on the best latest deals on this site!

K9cuddles

I fully agree, but the car is still staying! I don't see the car as a bind at all.. yes it's expensive but it's what I need, I do lot alot of miles and a runabout wouldn't be reliable enough. But buying bits for my car on my credit cards is a problem and very nasty habit that I've had in the past (and still paying for). It's not a high roller car, a very economical 1.8 (But I admit my 6points and 2 accidents pushed my insurance up - but no ones perfect!). Plus my car is my lifestyle/social life (and most of that is free!).

The internet I'm with BT think it's about £26.. the extra covers the interest on the account it comes out off (I think I should list it separately?). The dog account it for my dogs, covers pet insurance/food etc.

My current salary is 16k but with my regular overtime atleast 19k.

jobbingmusician

I'm sorry to sound so horrid, but I'm not sure you've had a 'lightbulb moment' yet - or at least, I think you've had a very little lightbulb go off. What I don't understand, though, is what your INCOME is. Can you post your total take home pay, and the total of what's above? On an income of £19k I suspect you are slipping further and further into debt - THAT's why people are telling you that a £17k car is too expensive. For £5-6K you could have a brand new smaller car with a warranty, not just an unreliable runabout.

But I could be wrong! I do hope you can prove me wrong. (Honest!) OF COURSE you can save money cutting down on the fringes, and I hope this is enough. It'll get you out of debt eventually (although if you continue making minimum payments on credit cards it will take you decades) But wouldn't it be better to get completely debt free?

K9cuddles

P.s I did look in to cheaper BB i.e Bulldog, but we've got 2 laptop hooked up and alot of the cheaper providers don't provide the facility to split the BB?? (sorry not very techie on that stuff).

Oh and I was just gonna put gift money in my ISA i.e B'day/Xmas money.. figured it was money I never had anyway.

I know I'm not playing to all the rules, but want to be sensible and in control not thrifty, my awarness of my spending has been raised so much, but I don't want to worry about it all the time, I just wanna get on the right track, know where I'm heading and what my aim is. If I pay back my o/s 6k when I won't have any one "chasing" me that's for sure, and then it's time to move on to my next aim. Well that is the plan anyway.

K9cuddles

jobbingmusician wrote:

I'm sorry to sound so horrid, but I'm not sure you've had a 'lightbulb moment' yet - or at least, I think you've had a very little lightbulb go off. What I don't understand, though, is what your INCOME is. Can you post your total take home pay, and the total of what's above? On an income of £19k I suspect you are slipping further and further into debt - THAT's why people are telling you that a £17k car is too expensive. For £5-6K you could have a brand new smaller car with a warranty, not just an unreliable runabout.

But I could be wrong! I do hope you can prove me wrong. (Honest!) OF COURSE you can save money cutting down on the fringes, and I hope this is enough. It'll get you out of debt eventually (although if you continue making minimum payments on credit cards it will take you decades) But wouldn't it be better to get completely debt free?

Hey, yes I've just realised the minium payment thing.. so my next issue to be addressed, my take home varies on my OT but for dec (which the figures are for) was £1400 defo outgoings of just over 1k.. so I do have spare money... well just.

I have had the lightbulb moment, before I used to spend my wages in 2.. yes 2 days.. with possibly some bills still to pay. So Now all my bills are always paid and I have money to the end of the month, I've only been on this for 2 months so I thought I was doing OK. or well had defo improved.. but obviously i'm looking to improve more!