I've seen the light

Knowledge_is_Power_2

Finally after years of money burning debauchery I've just realised I was such a fool.

It's just over half way through the month and I've got no cash left, no money in the bank and my credit card is run up to the max. :eek:

Looking for advice. I need to make a serious change in my life.

I would like to clear this debt by the end of the year, is it possible. Take a look at the figures below.

Debt

Barclaycard £7700 (around 19.5%)
Overdraught £2050

Income

About £2,200 after tax (various but this is an average)

Fixed monthly expenses

Rent £330
Car insurance £70
Credit card Repayments £250 (minimum is about £150 but I always pay more)
Mobile Phone averages ~£200
Petrol ~£180
Food ~£100


This should leave me with just over £1000, and lets say £200 for general spending, that leaves around £800, but it's all gone and more.

How can I stop this happening and make a serious impact on my hole?

Any advice very greatly appreciated.

southernscouser

Wow! £200 for your mobile phone? :eek:

People are going to hunt you down for this! One question really. Why?

OK, now your credit card interest is very high and I assume your overdraft is around the same mark, maybe a bit more.

Whats your credit record like? Are you up to date with all payments? Any late ones? CCJ's? Defaults?

If you think it is good then I suggest you apply for something like the BA American Express card. It's interest rate is only 4.9% for the life of the balance providing you don't spend on it or transfer balances outside the agreed introductory period! Normally 30 days!

£200 for "general spending" is a bit vague. Also do you not have any other bills like gas, water, leccy?

The best thing to do is start a spending diary. Every day note down every single penny you spend and on what! After a month or so you learn to appreciate what exactly you waste your money on!

Kevicho

you are going to have to bite the bullet and cut expenses wherever you can

Obviously mobile bills are very large there, can you cut down on usage!

Normally i wouldnt recommend this but maybe a lower interest rate loan to pay off the barclaycard will save you a fortune

This wont mean however you can rack up the debts again, get that card cut up!

with regards the 800 quid that has disapeared, try keeping a spending diary, then you will see where this cash has gone

There is no magic wand, paying off debt isnt easy, but the rewards are there

Kevicho

lol there is some kind of psychic link going on here

or have we just been on these boards too long (no such thing)

bonnie_2

and £180 for petrol, is that to australia and back.

Kevicho

I hate to sound mean but i think you are literally throwing money away with these high level of expenses!

Ive cut spending to the bare bone in the last few months, if i can do it anyone can!

Good luck!

CLAPTON

first things first you need to fully understand exactly where the money is going. there is no such thing as general spending; it all goes on specific things.
Start with a spending diary, that is a small note book into whcih you write everything you buy...no if no buts everything.

then post a Statement of Affairs so that people can provide informed comment

If you browse the bulletin board you will see examples but the general format is

: statement of income:

: statement of expenditure
this should be quite detailed but excluding debt repayment
: a subtotal to save us all having to add it up

: statement of all debts including
outstanding amount, monthly repayment , APR
a subtotal of the total debt and of the total repayments, to save us having to add it up

also add a brief details of your situation, partner, any children, rent or own property, value of house and mortgage, any special circumstances that are relevant

Knowledge_is_Power_2

Thanks for all the advice. I am implementing it all immediately. Tell me, how do you cut down your spending?

I understand that I really don't know how to manage money. I've never been taught, but I do know I can learn and I am more than willing, so if you have any advice etc... then I'm listening.

To be a little more specific, I'm single, live in a shared house and my rent is all inclusive. I have no children.

I really don't know what a good figure for an everage monthly spend is?

How much is a typical mobile telephone bill? I was hoping to shave a good £150 off my bill, is that reasonable. My mobile is my only telephone. I have no house phone.

roswell

Id sell your car and buy a diesel , if your spedning £180 a month on fuel your either doing some seriouse miles with a lead foot or your petrol tank has a hole in it .... £70 a month car insurance sounds high as well.

I guess you spend a lot of time on the mobile but is this needed, does anyone ever call you or do you only call them .. surely if thsi is for social use all your friends must have similar bills if your call each othere equally, dont fall for the " Im on pay as you go ring me back" after all if they need to call you they should pay for it not you.

Stop spending on stuff you dont need or wont use, dont fall for the glossy adverts for products that dont actualy pay for them selves eg electrical gadgets / late4st mobile phone s etc (after all a phone is to make phone calls on not to take photo`s / videos) (if your a photographer a phone wont suit your needs).

pineapple_beach

Hi there
I am 18 months into my lightbulb moment, I do it each month by allocating myself some cash for incidentals and living (dance class, food out, magazines for me and kids etc) of £150. Then I pay all the bills and loan/credit card at minimum payment. The rest, as my pay alters each month, I overpay my loan. At the end of the month whatever cash I have left I take out less cash the next month, so I always start at £150. I have reduced my debt from £24500 to £6700 in 18 months by doing this. I have to say when you are spending real cash and you can't/will not get any more until payday you doquestion how much you NEED to go out or BUY that item. It works for me! Good luck!
Best thing is you aev found this site and can gain real motivation from other ordinary people all around you doing the same thing. And if you learn the hard way, you will make sure you don't get into this trouble again...
pineapple_beach

nabowla

Knowledge_is_Power wrote:

I am implementing it all immediately. Tell me, how do you cut down your spending?

I understand that I really don't know how to manage money. I've never been taught, but I do know I can learn and I am more than willing, so if you have any advice etc... then I'm listening.

You'll need to set yourself a budget and stick to it. The first month's going to be hard as you've no idea how much you spend at the moment, but set a rough budget and then note down every last penny that you spend. You'll quickly get a good idea about how realistic your budget is.

Things you might need to cover in your budget include:
- food
- set amount for presents
- clothes
- mobile bill
- internet/Sky/DVD subscriptions
- transport costs
- going out
- hair cut

This isn't a comprehensive list and not everything will apply to you, it's just a suggestion to start you thinking. You might not spend money on some things every month (eg presents and hair cut) but you still need to put a small amount aside each month so that you've got enough money to hand when you need to go to the hairdresser or have to buy a present for a mate's birthday. Personally I'm absolutely hopeless at putting money aside in my bank account for things like that so I've got a series of jam jars at home. At the start of the month I take out the monthly amount that I've budgeted for those things and put it into the jam jars - e.g. I know my haircut costs £40 and I go once every eight weeks so I put £20 in a jam jar each month. If you find the temptation of having money at home too difficult, why not set up a separate savings account and transfer hair/present money (or whatever) into the savings account so that you remember not to spend it on other things?

Your grocery bill is probably one area where you can make significant savings - most of us have found that we spent huge amounts of money on random food that we really didn't need. I've cut back to £80 per month including all household stuff (loo rolls, washing powder etc) and still eat really well. This is probably a bit strict for your very first month so why not start off with a figure of c£120 and see if you can stick to it. The following month you could reduce it to £110, then to £100 etc. Have a look at the Old Style board for lots and lots of advice on cutting down grocery bills and home cooking advice (home cooking is much cheaper than buying takeaways!)