Your advice is needed - complete newbie, stuck in a dead end!

MajicMOLE

Hello all

First of all, I do appologise if I have posted this is the wrong forum! Wasnt sure if it should be here, or the debt free section!

Please be very gentle to me, I'm new! Its a new year, and I need to start progressing in life as its starting to get me down!

Heres my situation

I am male, 24 years young, in a relationship with my partner of 5 years. We both live with my parents, and we now need our own space! Desperately!!!!

We would love to get onto the property ladder more than anything, as I am a believer that renting is dead money, however given the current economical state, and my situation, you may suggest that renting is a better option for me.

I am a store manager, earning £22k, and my partner is a Shop supervisor earning £15k

However I have debt

I have a loan which I have had for 3 years which I needed to buy a car and pay of credit card debt. Their are 62 repayments left at £301 each month, totaling £18662 still to pay. This loan was the biggest mistake of my life, and what is holding us back, but unfortunately I cant turn back time.

I also have a credit card with £4000 outstanding on it.


My partner is very good, and has no debt!

We have virtually no savings, and I just don't know what to do

Your advice is appreciated!

Kez100

Do a budget showing your income and expenses and find out how much you have spare each month.

Join Debt Free Wanabee forums and see where you stand in terms of moving forward in life (you need to repay debt, perhaps find a place to rent and to build up savings)

Indeed you cannot turn back time but you can face up to what is ahead of you (which you are doing) and hopefully stop your overspending and stop things getting worseand start to move forward.

poppysarah

Ouch. Expensive car.

You've got to sort your debt out. It'll be a long hard slog.

hethmar

My goodness, that was an expensive car. Can you not change the loan somehow? Ask about that on the debt free board. (Ah, just seen it wasnt just for a car, you also had credit card debts aswell)

The big thing is that you have realised you need to sort yourself out - well done. And yes, you should rent for now - good luck

MajicMOLE

Thanks for your replies

We have already done a budget planner from MSE as honestly as we could based on our lifestyle if we had our own place, and it shows we have a spare £1140 per month, which makes me think can we buy and maintain a house? This obvusly doesnt include and morgage repayments, tax, water, gas, etc

However at the moment we are going out more often, too often, just for some own space - so we don't see all of that £1100 each month. However one of our resolutions this year is to cut back on going out.

The car was £12250, but their was also a CC for £5000 so i ended up borrowing £18000 at the time.

zaphod_beeblebrox_2

We where all young once and made many mistakes, unfortunately that’s sometimes how you learn

I did the same when I was 22, bought a brand new showroom car and regretted it for a long time. I sold the car for the best price that I could and paid of a chunk of the loan, this was all around the time of the Thatcher / Lamont crunch (bless em)

I/we where desperate to get on the housing market as prices where falling but decided to rent instead and concentrate on paying of the debt before getting married and having children et-al

All our circumstances differ, you may need the car, I/we didn’t

As hethmar says, at least you are aware of the problem and not burying your head in the sand

I would rent if I was in your situation for at least 2 years then between your 2 salaries you should have cleared a fair bit of that debt and the house market will have dropped enough for you both to have benefited from the property slump, so really it isn’t all that bad as house prices are predicted to fall some 30% ++

Life’s a beatch, take it on the chin and deal with it!

Squish_21

Is the car worth v.much now? If its still worth a few bob you could sell it and pay off your loan. Then get a cheaper car for a couple grand.

MajicMOLE

Thanks for your replies

We have already done a budget planner from MSE as honestly as we could based on our lifestyle if we had our own place, and it shows we have a spare £1140 per month, which makes me think can we buy and maintain a house?

However at the moment we are going out more often, too often, just for some own space - so we don't see all of that £1100 each month. However one of our resolutions this year is to cut back on going out.

The car was £12250, but their was also a CC for £5000 so i ended up borrowing £18000 at the time.

piggeh

How much of a deposit do you have? I think you need to prove to yourselves how much you can keep spare before you commit to that amount each month.

tinypawz

In my opinion, you would probably be better renting for a while. This will allow you 2 to get used to running a house. It costs alot more than you think , well it certainly did for me. It took a few months before I got myself sorted.:o

If you do decide to buy, have you looked at getting a mortgage with your amount of debt? Have you found how how much you and OH can borrow? Is that enough to buy in your area?

Either way, best of luck

Kez100

Spend six months, at least, proving you have 1140 spare and that should pay off your credit card in full and give you a couple of thousand in savings to throw at the loan (subject of course to debt rates and early loan repayment fees).

Six months will go in no time and gives you a short term challenge. Then you could think about renting in the summer.