I want to be out of debt and I'm looking for tips

MooseRich

As the title says, I'm in debt (not as much as some) but would like some help, some little pointers.

Here's the state of play:

Income:

Job - £1048.36

Expenses:

Parents - £160
Car Finance - £188
Broadband - £17.99
Car Insurance - £56.48
3 mobile - £40
o2 mobile - £30
Vodafone - £30
Garage - £35

I currently owe:

£6230 on Car Finance (13.2%)
£391.57 on Halifax CC (18.9%)

Savings Account - £564.84

The Car Finance is changing very soon to a Nationwide loan which will take my payments down to £149.72 (I'm waiting on the money at the moment but they are taking their time)

Broadband, I pay it, not my parents but they do use it as well. They pay so much for me, I'm not going to ask for any money really.

Car Insurance, I always hunt out the best deal each year, however I am paying the price for paying it back monthly (27.8%). Next year (April is renewal), I won't be paying monthly.

3 mobile is ending soon (Feb) and can't wait to get out of that contract, had no end of trouble, they won't let me cancel (despite the price increases) and I've had enough of them. The phone was sold and the SIM is in an old phone that only just works.

Vodafone, I had to get a new contract as I really couldn't get anything on 3 at all. In hindsight, I wish I hadn't bothered as now I make so few calls it's not worth it. It was worth it at the time though. This has until Jan 07 to run.

o2 is the ex's really. I took it out for her as she is a student without a job. She is well behaved though and never goes over her minutes and if she does, she has always paid me back promptly. We were together when I took it out and its £4.99 after redemption.

I know you are saying 'why 3 mobiles?', I can't get on with 3 anymore, I've had enough of them. One is the now-ex's. All cashbacks though go into my savings account.

I'm hoping to get rid of the garage but I suspect I'll have to pay someone to clear it out for me as my car isn't big enough to take some bits.

Any tips on where I'm going wrong? How can I increase my savings so I'm going to pay back the loan quicker. The quicker I can do it, the quicker I can move out and living in the SE, it's gonna take some doing.

I don't go out much these days, so I'll be saving there, I have a nice diesel car that costs about £5pw on fuel and I always try to use the internet for discounts. I'm a bit savvy, but I need to improve. I won't be able to go out much soon either as I'm very soon going to be a Special Constable, that should keep me busy and out of the spending shops.

Oh, little thing I also do, I have a jiffy bag next to my PC. At the end of each day, I sort my change out, any coppers or 5's I put into the bag. When it's full, I treat myself to a DVD at Sainsburys with their coin sorting machine, I've thought that is a great idea, even my stepdad does it too now.

Thanks in advance guys and girls!

jellycat40

Hi there

You are in control of all your spending. Well done. You know what is going where. One question why are you saving if you have debts. Pay off the CC if it is not 0% with your savings.

As for your car loan well it is a bank loan. You are not always doing the right thing to cancel an agreement as this can be expensive especially if you are going to a new provider.

I can't see that you have any real problems, if you want to pay off your loan faster see if you can throw more money at it or if it is a fixed rate that you cannot alter.

I think that you are doing really well.

Louise

MooseRich

I'm saving so I don't pay the daft % rates on next years car insurance, that was the main aim. Before I spotted that about 5 months back, I didn't have any savings at all!

The car loan is currently with Nissan (even though I bought a Skoda) and the aim will be to put the extra £40 saved each month into the savings to try and pay it off quicker. the loan with Nationwide is a 6.7% one and I don't think I can make overpayments. Correct me if I'm wrong there though!

Thanks for the encouragement, its just a little depressing knowing that I owe money for a daft thing like a car. I cannot get to work at night any other way bar walking and it's an hour walk each way, I've tried it.

southernscouser

Hi Moose and welcome to MSE.

OK,

First things first, what is your credit rating like? If good (which I assume it is as you've just been approved for a loan) then apply for a 0% APR credit card. If accepted transfer the £391.57 from the Halifax card. Just make sure you get a card that doesn't charge a fee for balance transfers.

Can you tell us more about your loan? Did you borrow £6,230 exactly or did you fall into the trap of borrowing £6,500-£7,000? (not criticising you if you did as I've done it many times)

Like you said with the car insurance pay for it annually next time.

Although people say you shouldn't have savings when you are in debt I think you should keep the £500 for "real" emergencies!

Can you not downgrade to a cheaper package on the 3 mobile for the last few months? Are you still getting your moneys worth from the free calls or whatever rather than paying for them on your Vodafone?

Also are you on the best package to suit your needs with Vodafone?

When does the contract end on the 02 phone? Does your ex pay all the bill or are you still paying some? Can you get on a cheaper package? Obviously though this could come with a risk if your ex runs up a bill and leaves you to pay it!

Regarding the garage, what are the bits you can't get in your car? I know you can ask the council to take some bits like fridges and cookers!

By my calculations you have about £450 per month left over. Start a spending diary to see what you spend the money on. Note down every penny you spend everyday!

wigginsmum

My immediate thought is to use your savings to pay off the creditcard completely. Apart from that, you seem to be doing well. Your 3 mobile goes in a couple of months, you're tied in to Vodafone for another year or so; the 02 - why are you still paying this monthly for her? I'd consider cancelling it, and she can get a pay-as-you-go; then you'll have £360/year extra to put towards moving out. By my rough mental calculations you should have £400+ left each month, so you can ferret at least some of that away into a high-interest account on say a monthly basis. I've just opened an ING Direct account - worth looking at, although there may be others which pay higher interest.

Jules

MooseRich

Credit rating should be good, yet I did get turned down for a 0% CC a few months back (CapitalOne, who then offered me a 19.9% card with no freebies, of course I turned it down).

I asked for £6300 on the loan as they wouldn't let me have the exact amount. I don't need the extra couple of hundred so they would've been a waste to me.

If I downgrade my minutes, will I get my cashback still? Plus, I have just one more payment to make, so it's not top of my list but if I can and not hurt my cashback, I'll do it. Vodafone contract, I think I need to be in for a month more then change it but again, will this hurt cashback at all? My last bills have come in at me making about 30 mins of calls on each yet I have 200. At the time I took the contract, I was making about 150 or so, it made sense at the time.

With the o2 phone, it's £4.99 a month and I pay that bit, when she goes over I ask for the money, but she only has done twice. Once was £2 and the other time was 36p. She paid me the £2 but I wasn't worried about the 36p. She's a sensible girl and I'm sure I can trust her, we left on good terms as we not going to see each other as much as we really wanted.

The only bit I can't take in my car is an exhaust and I've tried to cut it up as well, yet I can't get through it. I have no idea how much it would cost to get it cleared, I am going to get quotes in the new year after taking the easy bits down myself.

Spending diary will now be started!

I have all my savings in an ING account as they were 5%. 4.5% isn't that bad really though, so I'll stay there I think.

southernscouser

To be honest I'm not sure how the cashback thing works with the phone contracts. Someone will be able to help you there though.

Don't mean to pry but is your intention to keep paying for your ex's phone or only until the contract runs out? If you are both on good terms can you not get the account changed over into her name?

Just one other thing, did you opt for PPI or whatever it is with the loan? If you did cancel it. It's a waste of money!

MooseRich

I'm not paying for it when it runs out, I had agreed that when I took it out. Plus, why pay full price for something? I tried to change it over, but o2 wouldn't let me.

And I didn't take the PPI out, though Nationwide had the cheek to describe it all on their 0845 number, they just wouldn't take NO for an answer. I've never taken the insurance out, just seems pointless to me. I've thought that, say I get made redundant tomorrow, I can sell the car and it is still worth more than the loan amount and if for some reason it dips, it won't be much behind and I'm sure I could use the money from the car to keep me going until I get a job, any job!

southernscouser

Your in good shape financially. I know your original question was how to save enough to pay your loan off quicker and it all comes down to desire and commitment.

You can buy something you want (not need!) but it just means you will have the loan longer!

In theory you might be able to pay the loan off within a year depending on wether you put every last penny you have towards the debt, maybe sooner!

Is it possible to do overtime at work or would you even consider getting a part-time job?

MooseRich

I can't do any overtime at all. It's all been stopped and now the temps workers just work flexy shifts so they are in for the busy nights and have in effect, taken the overtime away.

I'm starting a part-time job, but it's voluntary, Special Constable with the British Transport Police. It's not about money there, its about making myself a better, more confident, more outgoing person. I think that is more helpful than money sometimes. I recently rejected a promotion at work as I knew I would find it too much. If I do become a more confident person due to this, I'll be going for promotion next time and I know it won't be long to go before the next one crops up.

southernscouser

MooseRich wrote:

I can't do any overtime at all. It's all been stopped and now the temps workers just work flexy shifts so they are in for the busy nights and have in effect, taken the overtime away.

I'm starting a part-time job, but it's voluntary, Special Constable with the British Transport Police. It's not about money there, its about making myself a better, more confident, more outgoing person. I think that is more helpful than money sometimes. I recently rejected a promotion at work as I knew I would find it too much. If I do become a more confident person due to this, I'll be going for promotion next time and I know it won't be long to go before the next one crops up.

Good on you. :T

Although you are not getting paid you can look at it as an investment. Like you say the skills and knowledge you can gain from the job could help you be succesfull in a future promotion.