Light Bulb Moment!

blissfullydebtfreewannabe

Hi everyone,

I'm new here (I've been lurking over the last couple of days and you seem like a good-hearted bunch) so I hope I have posted this in the right place.

I just wanted some help and advice in trying to get out of the vicious circle that I've somehow let happen. I've finally had that light bulb moment and I know that I can pay this off.

I'm currently £6881.93 in debt (not including my student loan), which is made up of the following:

HBoS CC: £695.37, limit £5400 (it is currently at 23.5%) but I have just transferred the balance to a new Post Office CC at 0% until November 2009 today, so with 2.98% transfer fee, the new balance should be approx. £716)

Virgin CC: £3928.35, limit £4000 (at 0% until July 2009, then reverts to 16.6% APR)

Tesco CC: £1008.21, limit £1500 (at 0% until November 2008, then reverts to 15.9% APR

Overdraft: £1250.00 (I think this works out at approx 15.1 APR%)

I haven't found out what my credit limit will be on my new Post Office CC as yet, but I am looking for suggestions on the best way to pay this lot off. I am looking to transfer the Tesco balance to either the PO CC or another 0% balance transfer account a.s.a.p. but do most balance transfer accounts let you pay off an overdraft (I know for certain that my Virgin account does but I am just about at my limit with that one .

What would you do? Any suggestions or advice would be greatly appreciated.

Thanks in advance.

Jade

GeorgeUK

Most credit cards do NOT allow transfers to a current account. Those who do allow money transfers as part of a promotion are known as "super balance transfer" cards, but most would see this as a cash advance and charge a whopping amount of interest.

You could try to pay the minimum to all cards and throw the rest at the overdraft and try to reduce it as quickly as possible.

Hang on - looks like the post office cards are SBT cards. I'd phone them to make sure before doing the transfer, but it looks like it will be allowed. You could phone and ask what your limit is if they haven't told you yet.
http://www.stoozing.com/sbt.php

jenchin66

Post office card will transfer money to your current account and don't treat it as a cash advance

Jesthar

Hi, bliss, and welcome!

Congratulations on having you LBM! :T Sounds like you already have the 0% card switching well under way, so how about doing a full Statement Of Affairs for us to have a look at? It's a sort of useful summary of your overall financial position, calculator is here:

http://www.makesenseofcards.com/soacalc.html

If you fill it out and use the 'MSE' button in the 'Format Reply for discussion board' section near the bottom, the lovely people around here can give it a good going over and see if there is anywhere you could be saving more money to help pay off your debts quicker.

~Jes

blissfullydebtfreewannabe

Thanks everyone. Here is my income/expenditure at the moment. I have already cancelled all direct debits etc that I don't have to pay, and got a travel card to save costs.

I have only included my half of the mortgage payments and property value, and my own salary, as although myself and my partner live together, we keep most of our finances separate. I pay certain things in the house, and he pays others, hence the reason there is no TV licence etc included in this list.

I have also over-estimated things such as hair, entertainment (included in this is an £11.99 monthly cinema pass, and we go and see as many films as possible to save us money) and clothing, and these will be the first to get cut back if I am struggling.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1000

Monthly Expense Details
Mortgage................................ 210
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 30
Council tax............................. 60
Electricity............................. 25
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 15
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 20
Internet Services....................... 15
Groceries etc. ......................... 100
Clothing................................ 40
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 5
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 5
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 40
Entertainment........................... 50
Holiday................................. 30
Emergency fund.......................... 30
Interest on overdraft................... 15
Charity (sponsored child)............... 20
Total monthly expenses.................. 820

Assets
Cash.................................... 0
House value (Gross)..................... 48000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 48000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 30500....(210)......0
Total secured debts........... 30500.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Post Office Visa...............716.......18........0
Virgin Visa....................3928......25........0
Tesco Visa.....................1008......31........0
Overdraft......................1250......0.........15.1
Total unsecured debts..........6902......74........-

Monthly Budget Summary
Total monthly income.................... 1,000
Expenses (including secured debts)....... 820
Available for debt repayments........... 180
Monthly UNsecured debt repayments....... 74
Surplus(deficit if negative)............ 106

Personal Balance Sheet Summary
Total assets (things you own)........... 48,000
Total Secured debt...................... -30,500
Total Unsecured debt.................... -6,902
Net Assets.............................. 10,598

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========

e.g. the number of adults & children in the household, the number
of cars included in the SOA or anything else that may be useful.

No children (yet, which is one of the reasons I want to be debt-free), one cat. Work is a bit of a walk (around 50 minutes), and while I didn't mind it in summer, it's far too cold just now.

Again, any ideas on cutting back etc would be greatly appreciated.

Thanks!

Jesthar

Right-i-ho, let's have a look!

blissfullydebtfreewannabe wrote: »

Thanks everyone. Here is my income/expenditure at the moment. I have already cancelled all direct debits etc that I don't have to pay, and got a travel card to save costs.

I have only included my half of the mortgage payments and property value, and my own salary, as although myself and my partner live together, we keep most of our finances separate. I pay certain things in the house, and he pays others, hence the reason there is no TV licence etc included in this list.

I have also over-estimated things such as hair, entertainment (included in this is an £11.99 monthly cinema pass, and we go and see as many films as possible to save us money) and clothing, and these will be the first to get cut back if I am struggling.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1000

Monthly Expense Details
Mortgage................................ 210
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 30
Council tax............................. 60
Electricity............................. 25 - Is this half the bill or all of it? If half, have you checked changing supplier?
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 15
Mobile phone............................ 25- if this is contact, can you lower the tarrif? Of go PAYG, maybe? Depends on how much you need to use it, I guess
TV Licence.............................. 0
Satellite/Cable TV...................... 20 - if OH is willing, this could go - Freeview isn't so bad!
Internet Services....................... 15 - you may be able to get a better deal here
Groceries etc. ......................... 100 - is this for just you, or both of you? If both, OK. If just you, this can come dow a good bit - I'm single living on my own, and last moth I spent about £50 on food - and I don't buy Value brands, and eat very well!
Clothing................................ 40 - you could ditch this for a few months, or cut back
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 5
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 5
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30 - you could reduce this, I think
Haircuts................................ 40 - prime target! Though I know you over budgeted for this, there are many ways to pay less for haircuts
Entertainment........................... 50 - another prime target for cutbacks - sneak your own snacks into the cinema, maybe? Or sneak in less if you already do?
Holiday................................. 30 - could be dropped for a while if you wanted
Emergency fund.......................... 30 - could be better spent paying off your debts for now
Interest on overdraft................... 15
Charity (sponsored child)............... 20 - some people would say drop this, but youdo have a surplus so you could keep it going
Total monthly expenses.................. 820

Assets
Cash.................................... 0
House value (Gross)..................... 48000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 48000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 30500....(210)......0
Total secured debts........... 30500.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Post Office Visa...............716.......18........0 - Really 0% APR?
Virgin Visa....................3928......25........0 - Really 0% APR?
Tesco Visa.....................1008......31........0 - Really 0% APR?
Overdraft......................1250......0.........15.1
Total unsecured debts..........6902......74........-
Just checking on the APRs

Monthly Budget Summary
Total monthly income.................... 1,000
Expenses (including secured debts)....... 820
Available for debt repayments........... 180
Monthly UNsecured debt repayments....... 74
Surplus(deficit if negative)............ 106 Yay! Surplus already! You need to throw this at the highest APR debt until it is cleared whilst still paying the minimum on the rest, then move on to the next highest APR etc.

Personal Balance Sheet Summary
Total assets (things you own)........... 48,000
Total Secured debt...................... -30,500
Total Unsecured debt.................... -6,902
Net Assets.............................. 10,598

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========

e.g. the number of adults & children in the household, the number
of cars included in the SOA or anything else that may be useful.

No children (yet, which is one of the reasons I want to be debt-free), one cat. Work is a bit of a walk (around 50 minutes), and while I didn't mind it in summer, it's far too cold just now.

Again, any ideas on cutting back etc would be greatly appreciated.

Thanks!

You seem to be doing quite well, really, though there are certainly plenty of areas where you could make some savings. You apparatly have a good monthly surplus, so the most important thing is to start throwing all your spare cash at your debts - check out the Snowball Calculator for help on how best to do this, and how much quicker you will pay things off if you do:

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

If you have a surplus on paper, but can't seem to find it, try keeping a spending diary and writing down EVERYTHING you spend - it will soon help you see where the pennies escape.

Regarding food, check out the Old Style Moneysaving forum here - you won't BELIEVE how far some of their regulars can stretch the pennies out food-wise!

Hope that helps,

~Jes

GeorgeUK

If you don't have 106 left over at the end of each month, it may be worthwhile keeping a spending diary so you know exactly where your money is going.

If paying council tax over 10 months, ask to pay it over 12
Electricity - check the comparison sites to make sure you are getting a good deal. Also make sure everything is turned off at night and use energy saving bulbs.
Satellite, phone and internet - is this a package deal?
Groceries - try mealplans so you don't buy whatever looks tempting at the supermarket. Also possibly move down a brand (shops own)
charity - right now you are actually borrowing money to pay for this.

blissfullydebtfreewannabe

Thanks so much for that. I can't believe it has taken me so long to find this board. It's great to have some impartial advice. Amazing! :A

Electricity is my half, on average over the year, so I will definitely check this out.

Mobile phone - I'm on contract, £15 per month, it usually comes in at under £20, but I budget £25 to be on the safe side! I'll look into PAYG though

Satellite/Cable TV - I wish I could get other half to give this up. It's the Virgin XL package, with phone and internet, usually around £55 per month in total

Groceries etc - lol, yes just my half, and food for the cat, and I know I can cut this back. My eyes are bigger than my belly, and I definitely waste too much. Looking to start making batches of food for dinners and lunches at work

Clothing - getting ditched for a couple of months, I don't care what I look like!

Presents - unfortunately, I have a large family, but I'm looking into Bootsing, using my Tesco clubcard for deals etc

Haircuts - I'm going to try my local college to see if a trainee can do it. I hope they do highlights too!

Entertainment - yep, more nights in for us, we already sneak out own snacks in to the cinema. Shhhh!

Holiday - unless OH wants to pay for it (which I doubt very much!), this is out the window for the forseeable future

Emergency fund - thanks, will use this to pay off debts first

Charity (sponsored child) - I've already cancelled all other contributions, and I just couldn't bring myself to cancel this one


Yep, those three credit cards are 0% on balance transfers, and I don't spend a single penny on them. My other credit card is now cleared, so I'm just away to cut it up so I don't spend another penny on it.

I'll definitely check the link out, and have started a diary too. No money spent today. Good start!

Lol, I've already checked out how some stretch their money out for food. Amazing, now I'm armed with some great tips!

Thanks for all your help Jes. You're a star!

GeorgeUK

Don't throw away that card you just cleared. You may be able to get a 0% for 6 months or low interest life of balance offer as an existing customer - incase you need to transfer funds when one of your other cards stops being 0%.

Jesthar

blissfullydebtfreewannabe wrote: »

Yep, those three credit cards are 0% on balance transfers, and I don't spend a single penny on them.

Fantastic!

If you manage to balance transfer your Tesco card (hope you can!) that would make your first target your overdraft. If you manage to cut your outgoings so you have a £200 surplus a month rather than a £100 (which you should do easily; you might even hit £250 on a good month!), you might find your overdraft all gone in about 6 - 7 months. Or perhaps sooner if some extra cash comes your way!

If you can't transfer the Tesco card, then that is your first target due to the slightly higher APR - again, that should take about 6 - 7 months to clear, I think? You might also want to consider creating a small 'cushion' in your overdraft if that is at it's limit (maybe paying £20 extra off it for a few months), as the APR isn't much lower than the Tesco card, and you don't want to get stung with over limit charges and the like.

Speaking of which, if you have ever had any charges applied to the cards, you can claim these back - they've been ruled unfair by the courts! See the 'Reclaim 1000s' section of this site for all the info.

Good to see you know the end dates of your 0% deals - don't forget to plot ahead for 0%/low interest rate balance transfer deals to switch to when these are about to run out, but you seem to have that well in hand anyway!

Let us know how things go, hey? We want to cheer you on!

~Jes

doodledo_2

Hi and welcome to the forum.

Good luck with your debt free journey.

Do you have any way to increase your income such as overtime etc.

Do you have anything you could sell on Ebay/Amazon etc to raise some extra pennies to chuck at your debts?