My first post on DFW, need advice - SOA included

Flipped27

Hi,

I don't think I have posted on here before, but we have finally come to the point where we can't carry on burying our heads in the sand and spending on credit cards - mainly because we can't get anymore credit (finally, this is my kick up the bum)

so I know that the idea is to pay off the one with the most interest first but I am thinking that paying off our pverdraft asap would be more beneficial to us....oh doesn't agree - what do you all think?

My highest credit card is £5000 and 21.9% and our overdraft is £2000 and 18.9% but we go over the limit pretty much every month so get charged £50 :mad: (I have now done a detailed budget and so this hopefully shouldn't happen again...) but its so hard to keep track of our "money" in our joint account as we are always in the red so I think we need to pay that off frst so that we can see where we are...

Am I being daft?

GeorgeUK

I think before you look into what to pay off first, you will need to see why you are going over your limit and try to budget for this. Post up a statement of affairs and we'll see if there is anything you can do to reduce costs. If you don't have the amount left at the end of the month that the SOA says you should have, it may be worth keeping a spending diary to see where any extra cash is going.
http://www.makesenseofcards.com/soacalc.html

It is usually best to tackle the higher interest cards, but if you have any with a low balance, you may be able to clear these then ask if they have any balance transfer deals on. This way you will be paying less interest overall.

Scarlett1212

Hi there,
I'm not an expert, I had my LBM 3 months ago, and we were in the same situation than you with bank charges and going overdrawn, we also have high APRs on our 3 credit cards and basically we are tackling the CCs first. The reason being that I don't trust myself with "spare" money in the bank account - when I start paying off my overdraft I will get it lowered as I go along. I am also much more careful with my money, knowing that if I mess it up it will come back and bite me!

Some things i did..

1. Make sure you don't go overdrawn again - sign up for internet banking if you don't already have it - check your account everyday if required.

2. Put a reminder on your phone a couple of days before any dd's are due so you can ensure the money is in the bank.

3. Budget and use cash (take it out the bank every week).

4. Cut up your credit card (scary i know but it is at its limit anyway).

5. Check your credit rating online - Going overdrawn with your bank account can adversely affect it. You can do it free with Credit Expert.(but remember to cancel it before the free trial month ends). If your credit rating is bad with missed payments/ going overdrawn (mine is terrible!), make an effort over the next six months to clear this up. You will then be in a better position to apply for another credit card with lower apr to do a balance transfer. If your credit rating is good at the moments apply for a CC with better apr now.

6. Apply to reclaim your bank charges - theres loads of information on this website and although it looks as if it may take some time to get anywhere it helped me realise just how much money had been wasted on charges. Don't give the banks any more of your hard earned cash.

Anyway good luck with it all

Scarlett

Nargleblast

Some good advice there, Flipped. Don't worry, we have all been ostriches at some time. Now you are starting to take charge of things. Good luck.

natsplatnat

Hi!!

When I had my LBM, I decided that I wanted to tackle my overdraft first.... mainly because I was over my limit regularly and it was costing me a fortune in charges. My reckoning was that as I was making all my payments to my cards and loan (only minimum but they were covered) if I could claw my way out of my OD then I would stop incurring charges and then have more money to throw at my other debts! It's a work in progress - but it made sense to me to do it this way!!!

All the best, Nats x

Flipped27

Thanks to you all for your advice - I will do an SOA but I am on maternity leave and go back to work in May so from then my income will change but I have no idea to what as its all dependant on Tax Credits.....

I will post back later with my SOA based on my income now, thats all I have to go on and we have to start somewhere! - Thanks all!

Scarlett1212

Hi Flipped,
I'm sure Tax Credits have a calculator which will tell you how much money you are due - if you know what your salary will be. Might help you forecast your future income. You will be fine just take it one step at a time.
Scarlett

Numpty_Monkey

Have a look at http://www.entitledto.co.uk/

Flipped27

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 571
Partners monthly income after tax....... 1493
Benefits................................ 488
Other income............................ 190
Total monthly income.................... 2742

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 775
Management charge (leasehold property).. 0
Council tax............................. 186
Electricity............................. 40
Gas..................................... 54
Oil..................................... 0
Water rates............................. 69.5
Telephone (land line)................... 15
Mobile phone............................ 35
TV Licence.............................. 11.95
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 368
Clothing................................ 0
Petrol/diesel........................... 60
Road tax................................ 18.33
Car Insurance........................... 22.47
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 12.77
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1778.02


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 3000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
cc.............................5000......93.62.....21.9
CC.............................6000......100.......18.9
CC.............................3102......67........14.9
Family Loan....................0.........200.......0
LOAN...........................8000......154.2.....7.9
LOAN...........................19000.....234.1.....7.9
CC.............................2000......35........0
CC.............................1024......23........14.9
Total unsecured debts..........44126.....906.92....-


Monthly Budget Summary
Total monthly income.................... 2,742
Expenses (including HP & secured debts). 1,778.02
Available for debt repayments........... 963.98
Monthly UNsecured debt repayments....... 906.92
Amount left after debt repayments....... 57.06

Personal Balance Sheet Summary
Total assets (things you own)........... 3,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -44,126
Net Assets.............................. -41,126

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

Ooh er have I done that right?

Flipped27

I haven't said how much the family loan is as I am not sure but I think its about..gulp....£49000....

My family doesn't know about my other debt, and I don't want them to (by family I mean parents) I need to deal with this myself without them knowing and offering to bail me out again.

I am so ashamed that I owe them so much money. My plan is to pay my debts off asap so that I can give them a big amount every month - as much as I can afford.

My loans finish: 154.20 in 2012 and 234.17 in 2014.

Flipped27

Oh and I have put "entertainment" as £50 as me and dh have £25.00 a month cash for anything like haircuts, going out, lottery tickets, coffee at work etc and we take £50.00 for the kids - school extras, shoes, clothes etc.