New here!! SOA added... please help!

leedsforever_2

Hey guys Im new here but really want some advice...

I owe a little over £5000 in 2 credit cards and my student overdraft which is £1600... !

Its really getting to me that I am constantly in the red in my current account and all I seem to clear is the minimum payment on my credit cards each month (I am cutting them up TODAY)!!

Just wondered what the best thing to do is... continue the way I am trying to reduce my debt by paying minimum payment each month or getting a big loan to pay it all off and pay a set amount each month so I know where I am!!

This debt has got the way it is because Ive only been back to work since january... I was on maternity leave and SMP isnt great so I did go back to work 4 months early to sort it out.. but it doesnt seem to be going anywhere..

advice please... :(

rigger_john

Hi and welcome to DFW.

the 1st thing you need to do is put up your SOA, and I would suggest keeping a spending diary, one you have posted your SOA there will be loads of very useful and helpful comments made on it by the real experts on here

You can find a SOA sheet here

After you fill it in you can use the format button marked MSE and then cut and paste the results here

slig

Hello! Welcome. You have a similar amount of debt to what I had not so long ago (October in fact - see signature). I had a £1800 overdraft, a £2500 loan, and then a load on credit cards. I now have no overdaft :T, I've put the credit card on 0% interest until February, and I'm currently saving to pay off the loan in full.

I don't think your best tactic is either of the things you suggested. Paying the minimum payments will take a lifetime to get rid of your debt (sometimes literally - if you work it out it can take you 30 years or something just paying the minimum :mad:). And consolidation loans are rarely a good idea.

I think what you need to do is downshift your lifestyle to free up as much cash as possible for debt repayments. Then throw everything you can at one debt each month, making the minimum payments on the others. Then that debt will go, and you can throw all your cash at another debt.

It generally makes sense to pay off the debt with the highest interest first, though I chose to do my overdraft first as it makes me feel much better having a current account in the black. I can see exactly how much money I have spare now.

Have a go at putting your finances into this calculator, and the genius people on here will help you work out where you can make savings and which debt to concentrate on first:

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

leedsforever_2

Cheers guys, I think my problem is I do waste alot of money and I really do not more organisation with my money... I will def post a SOA when I have more time... !!

I feel more positive now, even just by posting this and accepting that it IS a problem :)

gettingbetter

hi

it might help you to start a spending diary, even that wee bar of chocolate, write down everything you spend
you will soon see where your money goes

kas xx

leedsforever_2

Im definetly going to start doing that... i really never thought of it before! I bet I will really shock myself

leedsforever_2

My SOA

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 750
Partners monthly income after tax....... 1050
Benefits................................ 120
Other income............................ 0
Total monthly income.................... 1920
Monthly Expense Details
Mortgage................................ 440.8
Secured/HP loan repayments.............. 0
Rent.................................... 257
Management charge (leasehold property).. 0
Council tax............................. 108
Electricity............................. 32
Gas..................................... 35
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 12
Satellite/Cable TV...................... 35
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 80
Petrol/diesel........................... 150
Road tax................................ 0
Car Insurance........................... 20
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 80
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 30
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1639.8

Assets
Cash.................................... 0
House value (Gross)..................... 55000
Shares and bonds........................ 0
Car(s).................................. 4500
Other assets............................ 0
Total Assets............................ 59500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 59000....(440.8)....7.5
Total secured & HP debts...... 59000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Overdraft......................1600......0.........0
Credit Cards...................3600......90........9
Total unsecured debts..........5200......90........-

Monthly Budget Summary
Total monthly income.................... 1,920
Expenses (including HP & secured debts). 1,639.8
Available for debt repayments........... 280.2
Monthly UNsecured debt repayments....... 90
Amount left after debt repayments....... 190.2
Personal Balance Sheet Summary
Total assets (things you own)........... 59,500
Total HP & Secured debt................. -59,000
Total Unsecured debt.................... -5,200
Net Assets.............................. -4,700

Tixy

Hi LF

Just to confirm you have a mortgage and rent - is this a shared ownership property (rather than 2 properties)?

Satellite /cable £35 does this also include landline and broadband? if so that isn't too bad a price, if just TV then you could look at reducing your package or even just phone them up and say you are thinking of leaving (they sometimes offer substantially reduced price for 6months)

Groceries for 3 could probably be reduced a bit to say £150. Have you tried Martins drop a brand challenge (can save 20% or so), also over on the old style board there is loads of advice for eating cheaply and healthily and about cooking from scratch, batch cooking and meal planning.

Clothing - can you cut down for the adults for a few months, just buy essentials for the child.

Petrol/diesel - this is a lot, are all journeys essential? Again Martin has an article on driving as cheap as possible and you can save as much as 30% if you employ all the tips - http://www.moneysavingexpert.com/travel/cheaper-fuel
even with just some you may be able to make 15% reductions.

No road tax?

Entertainment - look out on MSE for any special offers, vouchers etc & sign up for the email if you haven't yet as you get to find out all the best deals. Otherwise try to keep entertainment as low as possible, consider if there are cheaper options if you are having a family day out.

So at the moment you are showing a surplus of £190- that's good news - you need to find out where that is going - the spending diary suggested earlier is the key to this. Everytime you buy something - think do I really need this and is it good value?

If you can spend the £190 surplus and maybe an extra £60-70 from cutbacks on repaying your debts you will make big inroads to your debt.

Is your overdraft really 0% or do you not know the APR? If its higher than 9% then focus on paying that off first rather than the card (just make minimum payments to the card). It can seem harder to reduce an overdraft as it is a case of not spending rather than making a payment across to a debt but try and aim for the o/d balance at the end of the month to decrease each month, then after a few months ask the bank to reduce the overdraft limit (to say £1000) so you can't spend it again.

Good Luck, hope some of my suggestions are useful.

leedsforever_2

Thanks so much for your time in replying

Yes it is a shared ownership property and we are probably in negative equitity .. our mortgage is so high for our small mortgage! We get charged £330 interest a month

Yes the £35 includes landline and internet so Im pretty happy with that

Groceries can definetly be reduced and have began to shop online... found it so much easier to budget and stopped impulse buying..

I will definetly cut down in buying myself and OH clothes.. I dont need anything I will just make do! my LO being 8 months has just gone up a size so Im selling all her other clothes and buying some bits on ebay... SO should have done this all along! The amount Ive spent on her is ridiculous

Yeah we do seem to spend no end in petrol.. I think its because we only have 1 car between us sometimes we have to double the journeys like he will have to come out and pick me up from work etc.. will try and be more wise!

I dont know my APR on my overdraft, it is a student overdraft though and they reduce the interest free bit every year... so it was interest free up until last september but now £1000 is interest free but I pay interest on the £600... about £6 per month. I think I should concentrate on paying my credit cards first and once they come down will definetly start leaving a bit of money in my a/c each month so I could look to decreasing the limit!

One of the credit cards I hold is interest free for now (Tesco) and I owe £2,100 on that one... idea was to transfer the whole balance but didnt get a high enough credit limit to do that! So My aim is to pay off my natwest one first as thats the one with the interest.. currently about £14 per month.. alot better than the £30 it was before I did the balance transfer!

Thanks again!!

Fire_Fox

Leedsforever wrote: »

I will definetly cut down in buying myself and OH clothes.. I dont need anything I will just make do! my LO being 8 months has just gone up a size so Im selling all her other clothes and buying some bits on ebay... SO should have done this all along! The amount Ive spent on her is ridiculous

Dont beat yourself up about it, what's done is done - a lot of people go a little made with their first child! The important thing is that you have nipped this is the bud and are taking all the right steps to pay off your debts whilst they are still relatively small. :T

Tixy

It sounds like you have already started making some good changes and have changed how you think - i think you'll be good at Money-Saving!

If you are shopping online for groceries keep an eye out for free delivery codes (on the discount codes board)

As FireFox says its normal to go a bit over the top on clothes and things for your first little one. Selling and buying on ebay is much better, you'll find most baby clothes for sale are in excellent condition. Also on freecycle there are often baby and childrens clothes for free (sometimes very good quality brands).

If you ever find your motivation lacking (or if you just want to pick up tips) look at the challenges on DFW, some are for saving, some for spending less and some are for reducing debts -see which ones might help you best.

A big thing for me was making sure I had all my accounts (bank and CCs) online so I can monitor each account and make extra payments as and when needed.