Your advise please

gouldilocks

Hi everyone,

I'm hoping someone will be able to help me please, I am in debt by £5000, this might not sound alot having read other peoples threads but it is worrying me because I'm not quite sure how to clear them and don't want them to spiral.

I wanted to get a loan out to consilodate the amount but having read previous threads am not sure whether this is the best thing to do.

My income is £1400

My outgoings are:

Mortgage: £458.00
Council Tax: £94.00
Gas/Electricity: £30.00
Water: £22.00
Contents Insurance: £11.69
Life Insurance: £16.16
American Life Insurance: £6.95
TV Licence: £10.54
Mobile: £45.00
Landline: £18.00
Broadband: £17.97
Laptop: £12.00
PC World plan: £9.99
Currys (warranty for oven): £2.99
Petrol: £200.00
Food: £200.00
_______
£1155.29

Debt:
Natwest Current Account overdraft: £3500
Egg CC £500 (repay £100 pm)
Tesco CC £1000 (repay £100 pm)
_____
£5000

I have just opened Tesco CC because it is interest free so transferred all but £500 over from Egg CC, should have done it all but didn't know what they would set my credit limit to be and since reading MSE have realised that if I did it now it would not be interest free but at balance transfer rate so have left it with egg but am not spending on it.

I intend to cancel PC world policy and possible Currys policy which would save me £13.00pm.

My food bill is unbelievable and I had no idea I was spending this much, this does include cleaning products as well and also most toiletries, hoisery for work and birthday cards! Sometimes I get food at work as well which can work out expensive and as you can see I have put no expenses down such as cash withdrawals and clothes etc as this changes each month, I'm not very frivilous with clothes anyway and rarely go shopping.

By putting this all down on paper has really made me open my eyes, I need to cut down on mobile phone bill especially even though I don't think I use it excessively other than texts and I get 200 free a month.

What I need help with please is how to pay off overdraft, is it best to move it over to a credit card or loan or leave it where it is? By leaving it where it is it never seems to go down, is it best to pay off Egg completely in next few months, say £200pm then cancel it and then concentrate on paying off Tesco card?

Sorry this is so long, it was only because I wanted to buy a new car that I thought I better work out my finances and thankfully I did otherwise this would get worse! Have decided not to get car yet but to run it into ground or else wait until finances are sorted before getting it.

Any help from you experts would be so much apprecitated.

H x

P.S. Have decided to write down everything I spend and check all statements with receipts from now on which is a start!

Locana

Well congrats on seeing what is happening with your debts before they get on top of you. Unfortunately I can't offer any advice, except don't go for a consildation loan. Other people will be along shortly to offer their valuable advice, but just to let you know we will all support you!!!

KatrinaC_2

gouldilocks wrote:

Hi everyone,

What I need help with please is how to pay off overdraft, is it best to move it over to a credit card or loan or leave it where it is? By leaving it where it is it never seems to go down, is it best to pay off Egg completely in next few months, say £200pm then cancel it and then concentrate on paying off Tesco card?

What to do next depends on what the interest rates are.

Clear the highest interest rate debt first - this way you pay the least interest in the long run. It's likely to be one of the credit cards, but check the statements or call the companies involved to be sure. If in doubt, use the snowball calculator on http://www.whatsthecost.com/snowball.aspx to see what is the most cost effective way to pay off your debts.

Get rid of the overdraft by asking the bank to reduce the overdraft limit by say £100 at the start of every month. You cannot use a facility that you do not have.

Kat

gouldilocks

Thanks so much, it helps to know I'm not alone... its just knowing what to do!!

Have to say people on these boards are a great inspiration

H x

gouldilocks

Thanks Katrina thats a great idea, my limit kept going up even though I never asked so I just kept spending over the years, will call bank tomorrow. Was also thinking of moving my current account to A&L because of there brilliant overdraft but as been with Natwest for almost 28 years feel weird leaving!! Have got forms here for A&L but not got round to signing them....

Thanks again

H x

inkie

Welcome to MSE Gouldilocks - you will receive huggins of advice here to help you sort your way through this. As you state, the thing that needs looking at is the mobile bill - I am on PAYG and with this 200 texts per month would cost me £8.00.

£200 seems a lot for food (I am assuming that there is just you) - look on the Old style board for ways how to slash food bills and eat more healthily into the bargain.

Although it's only £2.99 - do you really need the cooker warranty? Two lots of life assurance??

Are you in a position to take in a lodger - this would enable you to throw extra cash earned from this at the debts.

Just my initial offerings - no doubt folk who are more expert than me will be along soon to offer their advice
.

KatrinaC_2

gouldilocks wrote:

Was also thinking of moving my current account to A&L because of there brilliant overdraft but as been with Natwest for almost 28 years feel weird leaving!! Have got forms here for A&L but not got round to signing them....

Thanks again

H x

Instead of feeling weird and disloyal, just think about the amount of money you've given them over the years! You've probably paid them enough

Kat

gouldilocks

just looked at snowballing website posted above and looks great, will go into it in more detail tomorrow.

Defiantely need to sort out mobile, its up for renewal in April so will see what deals are around.

I live in a 1 bed flat so definately no room for a lodger!! Will look at food advise cos could definately do with losing a few pounds where thats concerned....

One of the Life Insurances is for female cancer, I got talked into a few years ago but will probably cancel it and the cooker.

Thanks everyone for your help

H x

CLAPTON

just to confirm :
your income is £1400 per month
your expenses are £1155 permonth
leaving £ 245 per month to service cc debts of (3500+500+1500)=£5500
now cc debt of 5500 require serving at about 110 to 150 per month(i.e about 2% to 3% mimimun payment. therefore after expenses and minimun cc payments you have spare about £100 per month to reduce your debts....is this actually true? I doubt it ... as you you never go out, never buy anyone any presents,
The most vital thing is to understand exactly where your money is going....do you have £100 spare if not why not...keep a spending diary every day to track exactly what you actually spend...forget about managing your cc debts for a moment and understand where you spend your money.

gouldilocks

Thanks Clapton, started writing down everything I spend as of 1st March.

zippygeorgeandben

Hi Gouldilocks.

I'll try and help you as well if you want!

Ben
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