Financial dilemma - RE Car & Debts

noz85

Hi all! First post here! :j

Firstly I would just like to thank Martin for all his good work. Hero!

Down to business.

I am 24 years old, living at home. No savings.. 12k of debt 6k on a loan for my car, and 6k to good old Mum and Dad (sad case I know..).

My income is £1450 take home on a flat month (no over time).

Out goings:

Board = £325 (a bit steep?)
Car loan = £189
Car insurance = £97 :mad: :mad: :mad:
Petrol = £120
Gym = £37.50
Mobile phone = £25
Credit card minimum payments total = £39 (don't worry though, these are sorted and as good as settled thanks to ebay)

Total out goings £832.50

Now, I have been a little careless of late, and been haemorrhaging money. But I've entered a 'budget pullback' as there should be enough each month to do some of the things I would like to do, and manage to save some money.

I bought my lovely car on the 25th of July 2008 for a massive £16,000 :eek:

I took out an £8,000 loan over 4 years (3 years left to go).

I want to get myself a house with my better half as soon as is practicably possible. We're probably looking at a 3 year plan.

Now, I haven't saved a bean since I bought my car, however, I have mounted up, and cleared, £5,000 on credit cards (in the last 12months). STUPID!! I have got a lovely Imac now, and... No! Stupid!

So in theory, I could have, and should have saved at least £5,000. Even with the car. Yea?

My dilemma is this..

I like my car and don't mind too much paying £189 a month loan, but don't like it being for another 3 years, as this could make a potential mortgage harder to attain when the time comes. I also HATE the £97 a month on insurance and it isn't set to drop at the end of July (my renewal). I also would like to get my debt to my parents sorted as well.

As far as I can see, my options are as follows:

A) Keep my car, struggle with the insurance and just hammer the overtime as much as possible to save as much as I can, whilst continuing with my new budget pullback.

Sell my car for between £12,000 and £13,000 (more like £12,000) clear my debt to my rents and get a car with the £6K left and continue with the loan.

C) Sell the car, clear all debts, get a banger.

D) Open to suggestions.


Opinions are welcome, but advice would be more helpful.

Thanks

John

Lokolo

So the only thing other than the above you need to buy are;

Gifts and stuff, Food, Bills?

To be fair it would be great if you had some sort of budget planner to see how much you actually have at the end of the day, not sure if you even have a clue?

With £600 extra after rent and debt, you should easily be able to survive.

sillystudent_2

What car is it out of interest? (sry, not that helpful a reply i know, just curious )

Edit: Just realised that, although your budget makes it look like you've got £600 spare every month, what about entertainment (nights out/xbox games etc.) - I'm only a couple of years younger than you, but I go out at least once a week pubbing/clubbing, it soon adds up!

LilacPixie

firstly your board I find to be reasonable.

WHat is happening to the other 600+ a month?? why not hammer the loan over 10-11 months with that excess the have 2 years of saving 800 a month??

Lokolo

Oh yes I have the 'same' dilemna also. A brand new Mazda3 for £10.5k (with £3k off cause of scrappage). And get a £3k deposit down and pay rest on finance.

Or save and meet my savings target.

I currently have a J Reg Ford Fiesta.. so I may need a new car sooner or later!

noz85

Lokolo wrote: »

So the only thing other than the above you need to buy are;

Gifts and stuff, Food, Bills?

To be fair it would be great if you had some sort of budget planner to see how much you actually have at the end of the day, not sure if you even have a clue?

With £600 extra after rent and debt, you should easily be able to survive.

I don't really have food bills as such. I eat at the girlfriends house or at home, and since the 'budget pull-back', I've been taking lunch into work, to stop me from visiting that pesky cash machine!

I should have £600 ish each month after £60 a week 'self' money. But it doesn't always work out like that.

@ Sillystudent - the car's an Alfa Romeo GT Blackline 2.0JTS - Nice machine! :T As for the rest of my budget. I go out once every 2 months, and don't buy too many gifts, and never buy computer games. So I don't know why I'm so skint. However, I will repeat that I've paid off £5k on CC's.

@ LilacPixie - good idea, I have also considered this option. Not a bad one I must say. I will first have to check that my loan will allow me to do this. If not, I will have to get a different loan that allows it I think perhaps?


Perhaps I'm being a bit hasty saying I need to sell my car and wipe the slate over night? It's a bit of a knee jerk reaction I think. I'm a bit like that..

I think I really need to knuckle down and get this budget malarky nailed. Get the over time hammered and see how much I can save and clear the loan and the debt to the rents as soon as I can?

The insurance though, that really winds me up!

Lokolo

Yes at the moment you keep saying you've got these expenses, £600 left over but nothing written down.

You need to put everything into a spreadsheet or a budget planner, to work out how much you can actually pay off.

Early repayment can incur costs... just a warning, read the T&Cs of the loan.

How secure is your job? You might want to have some savings along side, that way if things go wrong you have something to fall back on.

I wouldn't go saying you need to sell your card, I will say you need to work out your income and outgoings properly, and make sure you get everything.

noz85

Lokolo wrote: »

Yes at the moment you keep saying you've got these expenses, £600 left over but nothing written down.

You need to put everything into a spreadsheet or a budget planner, to work out how much you can actually pay off.

Early repayment can incur costs... just a warning, read the T&Cs of the loan.

How secure is your job? You might want to have some savings along side, that way if things go wrong you have something to fall back on.

I wouldn't go saying you need to sell your card, I will say you need to work out your income and outgoings properly, and make sure you get everything.

Isn't there a budget calculator on this site somewhere? I might have a go with that.

I do have a spreadsheet, but it only covers the things I have listed here. So that's board, car loan, car insurance, petrol, gym, CC payment, mobile phone, £60/week for doing things/paying for things.

CLAPTON

try this budget planner
http://www.makesenseofcards.com/soacalc.html

start to keep a spending diary .. i.e. wtiten down absolutely everything you spend for a month or so and find out where all that 600 is going.

is there a way of not having a car.. already its costing you over 300 per month and you haven't included car tax or servicing, RAC/AA costs etc

LilacPixie

And lets face is alfa's are not the most reliable of cars

noz85

LilacPixie wrote: »

And lets face is alfa's are not the most reliable of cars

lol that's original :T
Alfa's are the most reliable cars in the world providing you look after them. Not suitable for BMW drivers, as you need to check the oil etc!!

@ Clapton - the diary sounds like a good idea (I have toyed with the idea of doing that before, but never actually gone ahead with it), and thanks for the link. Very helpful.

Last month I ended up £300 into my overdraft as I had to pay for a couple of things that I hadn't planned for. However I got paid and extra £300 after that due to over time, and now, I get paid in 10 days, with all direct debits paid for and I still have over £300 left. So, in theory, the over time should allow me to save at least £600 a month.

I plan to continue my budget pull back (basic money management), and hammer the overtime and see how I get on. Hopefully, the Alfa is safe.