What to do...!

alikelly1912

Well im new to the forum but have used some advice from this website for quite some time. I'm just trying to improve my current situation really but not entirely sure if I'm worrying too much!!

Ill try to keep it brief but I live alone, work part time as much as possible but am also completing a uni degree full time. Ive recently ended a poor relationship but supported two adults on a part time wage for over a year which has left me in a situation I didnt want to be in!

Currently my essential bills (not including food) all come out via direct debit and ive switched everything possible to cheaper alternatives this comes to £926 per month. I bring home from my job between £900-£1200 per month. I have an interest free overdraft of £2500 which is full, an interest free credit card of £5000 which is full and a card I'm paying interest on at £4500. Ive done the budget checker and im spending more then I earn on just my essentials!

My question is this, I know that I have to chip away as much as possible against the card that is charging me interest (ive tried to switch to an interest free, no joy) but as my other card and overdraft are interest free should I be so worried? Once I finish my degree I will get a full time job and start paying back as much as I can afford, but then I will also have to start paying back my student loans etc. I own a house and im at a fixed rate till 2011. All my bills are paid and im up to date on all of them but am just wondering how best to start to pay the £10kish that I owe.

Alison

RAS

Can you take a lodger to increase your income? There is no tax to pay on income from a lodger up to £370 per month and it does not cause problems with the mortgage like renting does.

And it would be a good idea to post up you SOA.

alikelly1912

This is where I look stupid...whats a SOA?!!!

laura2481

SOA = statement of affair
Here is a link

Basically it's all your incomings and outgoings so you can see how much you can (or can't!) pay off your debts!

Then we can all give lots of helpful advice

gfplux

Hello alikelly1912,

Start a spending diary TODAY to find out exactly where your money goes. That knowledge will give you power.


Looking forward to your SOA
Good Luck

BeautyandtheBeast_3

Hi and welcome!

Katie-Kat-Kins

Do you have student loans? Although debt isn't normally the answer a student loan might get you cheaper debt and a break from repayments.

Getting a lodger does sound like an excellent solution, communal living is what being at uni is all about and there will be plenty of students looking for a place come now to start in september.

Your uni might also have a hardship fund that you could apply to for some extra help.

In the meantime while you have switched providers you need to examine whether you can reduce your expenditure further. Post a SOA so we can see where the money is going. Consider reducing your utility bills by using less, reducing your food spend by visiting the old style board for help. Do you have mobiles, internet packages, sky tv etc that you could reduce/stop?

Do you have a car? If so do you need it? Could you sell it to pay off a loan and reduce your expenses?

Can you get more hours at work or a second job? Could you do something like avon or betterware for more cash? Or take in ironing or type final year students dissertations up for pocket money?

There is a lot you can do to get out of this but you need to post a full soa and start a spending diary.

Fire_Fox

You don't mention any student grants or loans, are you not getting these? Are you claiming council tax exemption? Can you let out a room in your home? Do you have a car you could sell (students get cheap public transport!).

alikelly1912

Well here it is!

VNumber of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1000
Monthly Expense Details
Mortgage................................ 598
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 32
Gas..................................... 32
Oil..................................... 0
Water rates............................. 34
Telephone (land line)................... 17.5
Mobile phone............................ 35
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 18
Groceries etc. ......................... 150
Clothing................................ 50
Petrol/diesel........................... 40
Road tax................................ 120
Car Insurance........................... 25
Car maintenance (including MOT)......... 50
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 33
Buildings insurance..................... 20
Contents insurance...................... 20
Life assurance ......................... 23
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1384.5

Assets
Cash.................................... 0
House value (Gross)..................... 120000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 123000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 107000...(598)......0
Total secured & HP debts...... 107000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................5000......25........0
credit card....................4500......70........15.9
overdraft......................2500......0.........0
Total unsecured debts..........12000.....95........-

Monthly Budget Summary
Total monthly income.................... 1,000
Expenses (including HP & secured debts). 1,384.5
Available for debt repayments........... -384.5
Monthly UNsecured debt repayments....... 95
Amount short for making debt repayments. -479.5
Personal Balance Sheet Summary
Total assets (things you own)........... 123,000
Total HP & Secured debt................. -107,000
Total Unsecured debt.................... -12,000
Net Assets.............................. 4,000

Obviously I dont pay road tax every month!

I should have mentioned im a mature student, im actually 30 this year! I dont have any students loans etc yet because I have another year before I finish my degree, I estimate Ill have about £16k when im done but dont start paying that back till im earning £15k or so. I dont pay council tax because Im in full time education which saves me £90 a month! I have thought about a lodger, but it is difficult when you've lived on your own so long and have OCD!! I dont use my car often because I like to cycle so ive cut back alot on petrol costs but am keeping it because once I finish my degree I will need a car for my new job.

QueenBeruthiel

Sell the car.

Fire_Fox

alikelly1912 wrote: »

I should have mentioned im a mature student, im actually 30 this year! I dont have any students loans etc yet because I have another year before I finish my degree, I estimate Ill have about £16k when im done but dont start paying that back till im earning £15k or so. I dont pay council tax because Im in full time education which saves me £90 a month! I have thought about a lodger, but it is difficult when you've lived on your own so long and have OCD!! I dont use my car often because I like to cycle so ive cut back alot on petrol costs but am keeping it because once I finish my degree I will need a car for my new job.

I am a mature student too, I am 36. Don't you get a maintenance grant? You should as you will be classed as independent living alone. Did you take out the maintenance loans or just the tuition loans? The loans will be at 0% from this year so take it all and put it in a savings account or pay off your credit cards! I didn't take the loan in the first year as I didn't want any debt, but I regret it now. My maintenance loan is all in my savings account for an emergency ... and I will only have to pay it off at an affordable rate and only if I am in employment (I have been ill before).

You would be better off selling the car and buying another when you graduate if you need one. It is depreciating and costing you a fortune in tax, MOT, repairs, insurance and petrol.

Gas and electricity could be cut a bit by either switching supplier or watching your usage. Household insurances could be combined and switched and the groceries could reduce to about £100 a month. Other than that it looks pretty good!! :T