SOA! Before i apply for loan!

Mightyowl

TotallyBroke wrote: »

Ok I'm going to be straight with you and give you some advice that I wish I had taken myself many years ago. But first some questions.
Will you sell the car when you get the bike? If yes could you sell it before and use the money to buy the bike. If No, why not?
Do you pay your car insurance yearly or monthly?
Do you pay your parent's cash or into their bank?

This is my suggestion to you. Two days after payday have a direct debit that pays your parent's their rent money and another that pays £700 into the savings account. This will leave you £500 in your account for mobile, clothes, insurances, road tax and going out. If you pay car ins & road tax yearly then transfer the monthly amount into the savings account, then it is there when you need to pay it.

You'll soon be able to buy the bike and not get into the debt trap. Because the fact you say you are struggling to save £50 per month rings alarm bells to me. The quicker you sort this out the better.

I have taken your advice and just set up a e-saving account with Barclays and just transfered £100 into it. I didn't know it would be that easy to be honest so thanx again

CLAPTON

start to keep a spending diary.. i.e. a list of absolutely everything you spend

and also work out all the annual or one off costs like car tax, servicing, AA/RAC, holiday and presents and xmas cost and divide these by 12 to get a monthly amount... get used to actually saving for these annual costs so you have the money saved up when needed.

once you done that have a review of your spending and then you can make choices about running up debts for things or learn to save up for things you want
who knows you may want to move out of mum and dad's house and live independantly; then you will be pleased to have saome savings.

talana

Mightyowl wrote: »

£50 a week i save!

Yes, but that's the problem you need to address here, don't you see?
Because according to your SOA you should be saving £747 per month(actually now £719).
You say you're saving £50 a week (or about £220 a month).
So where is the other £500 of this going? Right now it seems to be disappearing into a black hole!

Either your SOA is completely unrealistic or you have £500 every month going missing. Either way this is something you need to get to the bottom of before going any further.

TotallyBroke

So you are struggling to save £200 per month.
You are going to buy a bike but keep the car, so will have 2 car insurances, 2 mot & servicing costs and 2 road taxes to pay.
So let's look at this logically this will be your new soa

Mightyowl wrote: »

Monthly Income Details[/b]
Monthly income after tax................ 1300
Total monthly income.................... 1300

Monthly Expense Details
Rent.................................... 80
Mobile phone............................ 40
Clothing................................ 100
Petrol/diesel........................... 60
Road tax car........................... 11
Car Insurance........................... 17
Car maintenance (including MOT)......... 10 Because you will need this

Bike road tax............................. 11 Based on same prices of car
Bike Insurance............................ 17
Bike Maintenance...................... 10
Haircuts................................ 10
Entertainment........................... 200
Total monthly expenses.................. 566


Unsecured Debts
Description....................Debt......Monthly...APR
Next...........................644.......61........0
Argos..........................140.......2.........0
Loan...........................5000 300 ?
Total unsecured debts..........5784.......363........-


Monthly Budget Summary
Total monthly income.................... 1,300
Expenses (including HP & secured debts). 566
Available for debt repayments........... 734
Monthly UNsecured debt repayments....... 363
Amount left after debt repayments....... 371

You will not be able to manage a loan, you are unable to save the £200 per month. A loan will be more than that each month.

I don't want to put a dampner on your spirits I'm just trying to show you how not to make the same mistakes that so many of us do. Remember too, if you were to be made redundant what would you do?

Look through the last 12 months of bank statements and see where exactly you spent your money. Then see if you can find that missing surplus, factor in the added costs of running the bike and car and go from there.

Mightyowl

I have been wasting most of the £500 spare each month on crap!

I have been spending £80 a week on vinyl for the last twelve months, plus the clothes i spend money on. I have now stopped buying records and that will be evident to my bank as transfer £100 a week into the savings account.

talana

Ok, so really at the moment your SOA should read:
Entertainment........................... 700 !!

As others have said then, you don't need a loan.
£500 a month on crap or £500 extra every month towards the bike?
Seems an easy choice.

Mightyowl

Not very good is it? 700 quid on enterainment is just ridualous.

Thanx for opening my eyes!

TotallyBroke

You are more than welcome. I wish I had found this site and had this advice when I was your age.

Although, I was given the same advice that I have given you and I achieved it. I managed to buy a decent second hand car after a few months.
I then had bad choices in men and from then I have been chasing my tail and the debts accrued.

I'm now here and clearing my debt and saving for debts that I know will happen and need paying. It's taking me longer to be debt free but with the help of others here it was the best decision to pay off existing debt slower and save so no extra debt, rather than paying off a debt and then have to take another debt on further down the line.

You can have so much fun on the cheap. I can go out on £20 and have the best night, I don't have to drink loads, then pay for the kebab because I'm drunk and hungry. I now eat before I go, meet up with everyone a bit later and relax and enjoy.