Newbie in debt and worried

CHRIS79

Morning all,

Ive been in debt since i was 18 and sent my first credit card, then 29% finance on car tyres, car stereo finance, the list goes on.

Currently, im approx 26k in debt, 12k of that was a car loan 18 months ago

Nothing on credit cards but only £1k in savings for rainy day

Only earn 21k per year, down from 38k a few months ago, but due to redundancy (im a Quantity Surveyor in construction industry) im finding it hard to not spend like i used to

Be glad to get some support/advise off here to help clear these loans asap

Got 2 loans, Lloyds and Sainsburys, 12% and 9% so not the best rates

Out of my £1400 monthly take hom, I spend £560 just on loans

Luckily i havent moved out of parents yet but having these loans isnt helping at all

Ive owned old cars in the past and are nothing but trouble, so buying my 1 year old 12k SEAT Leon was a blessing, its diesel too.

Chris

josephine82

Hi Chris

There will be some more helpful people along to reply in a minute but most people will suggest you fill in a Statement of Affairs through this link, and then post the result. It will help us see your debts, incomings/outgoings and offer some advice.

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

Jo

slig

Can you post your SOA using this link? Make sure to format it for MSE. http://www.makesenseofcards.com/soacalc.html

It looks like you've realised what the problem is - spending like you're still earning £38k. You just need to work out how to adjust to a new lifestyle, one that allows you to live within budget and have an excess to throw at your debts. The good news is you're living at home, which is a huge help.

It looks like cars is your weakness, so maybe you need to think of a strategy to limit your spending in this area? You could set up carholics anonymous? I'm sure there are lots of other carholics about.

Unless you're likely to be made redundant again, I would suggest you use most of your £1k savings towards your debts.

misspoppy

Hi

I'm in a similar position to you in that I can afford my out goings but I know i'm spending too much. Last week I set up a spending diary whch is a real eye opener. It has made me think twice about how much I'm spending in my danger area, eg clothes and my case craft stuff for my hobby.

Seeing how much I've spent in the past week on crafts has disgusted me, but, because I know how much I've spent I have not bought anything else and I've set myself a budget for July.

CHRIS79

Here we go

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1367
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1367
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 10
Internet Services....................... 0
Groceries etc. ......................... 50
Clothing................................ 0
Petrol/diesel........................... 50
Road tax................................ 12
Car Insurance........................... 35
Car maintenance (including MOT)......... 45
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 7
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 354

Assets
Cash.................................... 1000
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 10000
Other assets............................ 0
Total Assets............................ 11000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Lloyds TSB car loan............10000.....256.......9.9
Sainsburys Loan................16000.....302.......0
Total unsecured debts..........26000.....558.......-

Monthly Budget Summary
Total monthly income.................... 1,367
Expenses (including HP & secured debts). 354
Available for debt repayments........... 1,013
Monthly UNsecured debt repayments....... 558
Amount left after debt repayments....... 455
Personal Balance Sheet Summary
Total assets (things you own)........... 11,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -26,000
Net Assets.............................. -15,000

mummy2mygirls

im no expert but would say that ou should write a spending diry - might help you notice how much you are spenidng and maybe stop you from spending so much!

ou have £455 left each mth so could clear your debts in no time if you really try. Maybe se you self a amount for spending each week and try and stick to it?

good luck im sure you will be able to clear it.

*louby_lou*

Hiya
just looking at your SOA, don't you pay board at home?
I think a spending diary as sugested would be your best bet as you should have lots of spare cash based on your SOA but you say you don't.

Its a real eye opener, i was shocked when i did mine, the amount of little things that add up each month.

Hopefully the experts will be along to help you out.

CHRIS79

Thats a great idea. Dont pay board at home yet, altho Im 29, but was off work for 3 months, only been working a month now, this bloomin recession!

Will start today! thanks

josephine82

SOA looks good, as others have said, try to ascertain where that left over £455 is going. A spending diary will be good, or go through your last months statement, adding up everything and make a list of where it goes.

If it were me, I would keep the 1k in savings and try to add to it. Paying that money off the loan will only reduce the term I think and not the monthly payments- someone else might comment here.

Might also be worth looking at your car insurance to see if you can get it a bit lower- If you do it in one payment it might be significantly less over the year (you could use the omney from your savings) and then you could save more in the long run.

You should try all the tips on here, like the spending diary, having No spend days and maybe see if there is anything you can sell on ebay or Amazon??? Loose change as well...

Good luck!

GeorgeUK

If you aren't sure how much you spend on some things, try to remember what you spent last years and use that figure as your annual amount, then divide by 12 - i noticed you don't have anything for presents. There may be other things in the list that you can add to.

If you don't have £450 left at the end of each month after paying the minimum on debts, then a spending diary should definately help. You have £50 for groceries, but does this include lunches at work, coffees etc? Do you buy papers or magazines?

Is there a fee for membership of any professional body?

Check if you are able to make overpayments to the loans and if not, put a certain amount each month away into a high interest savigns account. You may be able to settle the loans early after you have enough saved up. There may be an early settlement charge, but if you have this amount available at the end of each month, you could be debt free in about 2 years - even less if the loan amounts were the original rather than current balances.

CHRIS79

Yeah I do buy quite a few magazines, and am a gym member, which i wont cancel. Lunches are made at home.

Will start this spending diary today and go from there

Thanks all

Chris