Student Debt, Painful.

badger._2

OK, call me silly, stupid, pathetic, or most offensively, a student, but I need a bit of help. I'm attempting to get into the habit of moneysaving, but the large shadow that is my debt stops me from beginning. I'm wanting to start off on a clean slate, so to speak. (Ideally for the beginning of September)

Here's my situation:

HSBC Student Account, - £1141 Overdrawn (Overdraft exceeded due to double charge by phone company, no charges applied)

First Direct Current Account - £200 Overdrawn (Wish to reach £0, and close acc)

Student Barclaycard - £500 in debit.

HSBC Credit Card - £200 in debit.

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Where do I start. I've got my loan coming in on the 28th, £1067, by the way. Now where do I start? My student loan comes in on the 28th, with a monthly wage of £700-800 due to be paid June - September.

Help!

Bunnie1982

What are your monthly payments on your cards?

Do you have any other outgoings like rent, utilities etc.?

sweetmoneysaver

No you're not stupid or pathetic! We all start somewhere. You mention a monthly wage (looks like summer months only), do your studies allow you time to do some work during term-time as well. Obviously you don't want to jeopardise your studies but this will help you get towards your clean slate. Do you have a SOA written out so that you can see where you monthly expenditure is going?

lynzpower

Badger, No one is going to call you names here!

Just to say, that great for you trying to make efforts to cut back when a student, its one thing I never did and Im still paying for it now, 6 years on.

:T

badger._2

Bunnie1982 wrote:

What are your monthly payments on your cards?

Do you have any other outgoings like rent, utilities etc.?

At the moment, minimum payment. They're both incurring their interest as of this month. HSBC was interest free up until now. As you can imagine, the interest I pay is mental, being a student card.

Monthly outgoings:

Monthly Expenses
- Rent - circa £75pw (August 2006 onwards-)
- Phone Bill - £25 pm (April - April)
- Travel Expenses. Hardly essential I know, but long term relationship and that brings total to £100pm.
- Shopping, petty expenses - £100 pm

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Exceptional Expense
Tuition Fees - due September 06 - £1200.

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Total (During forthcoming term time (September)) - £525.
Total Monthly Expenses (From Today - September) Phone Bill - £25.

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Total Incomes - (From Today - September)
Employment - Varied, but avg. £700pm.
Student Loan - £1000 (28/4), £1000 (28/9)

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sweetmoneysaver wrote:

No you're not stupid or pathetic! We all start somewhere. You mention a monthly wage (looks like summer months only), do your studies allow you time to do some work during term-time as well. Obviously you don't want to jeopardise your studies but this will help you get towards your clean slate. Do you have a SOA written out so that you can see where you monthly expenditure is going?

I can work term time indeed, and i'm in the process of organising a transfer to the nearest branch (Newcastle, where i'm at uni). This will bring in approximately £250pm. Months - May, September - December, January - May.

lynzpower wrote:

Badger, No one is going to call you names here!

Just to say, that great for you trying to make efforts to cut back when a student, its one thing I never did and Im still paying for it now, 6 years on.

A Business Finance student at that....

Hope this helps...:D

muddled_midget

I'm assuming the HSBC student account is 0% interest, and the HSBC credit card and barclaycard are around 17% (I think that's what mine are anyway). What I would do is get my student loan and work out exactly how much I need to live on between now and first wages from job, plus a little extra from emergencies. Then I would pay off the highest interest charging debt with what remains. Over the summer, if you're serious about paying off your debts, live frugally, and put as much towards them each month as you can. Once you've cleared the cards, pay off around £200 of the HSBC overdraft to give you a buffer zone, and then start building up your savings in a high interest rate savings account, making sure it's easy access. This has two benefits, number 1 you're earning interest on your savings, and number 2 it's much easier to budget as a student if you pay all your student loan into a savings account and drip feed it back at a rate of around £200/month over the year. It avoids that feeling of having loads of money at the start, and none at the end of the month. Also only having £200 left on your overdraft encourages you to think more carefully when you spend money, rather than thinking you've got £1250 to spend!
Anyway, these are just my ideas, someone else might have some better ones!
MM

badger._2

I see your point there...just to confirm it, my overdraft is 0%, and the Barclaycard, i'm sure is 17.3, with the HSBC lower, as it is pre-student days. I've got an miniISA, also from pre-student days, which could act as the saving account, purely for simplicity reasons (although i'm sure someone will recommend a high interest account somewhere...)

Living frugally is easy for me. Having no life is generally an advantage, with the girlfriend being the only expense, (mentally and financially...)

OK, say I clear my bad debts (Barclaycard, HSBC CC) with my next loan. That's a total of £900. Leaving my overdraft at £841.

My next wages, of around £200 (for misc. easter work) will pay off the First Direct Overdraft (10.9%) in its entirety.

Phone bill comes out, leaving me £866 overdrawn. Term ends.

Phone bill continues to come out of overdraft, and is covered by preceding wages.

Wages for May, June, July, August and September put into ISA or HISA, with bits left over to fund Overdraft Buffer.

Just some more ideas, I guess...

I just realised, there's a housing deposit of £160 coming out on the 28th April, coinciding with Loan.........

nicola1982_2

As someone who is just about to finish university my best advise would be to maintain at the moment. When you graduate you'll be able to really get into repaying your debt and your frugal living style will assist you in doing so. Holiday jobs are the best time to do any debt clearing, but in term time concentrate on your studies. If your overdraft is interest free then don't worry about it, upon graduating you'll be able to repay it at 0% gradually. This is when you'll need to be strict with the overdraft.

Student debt is inevitable for most and if you look at my sig you'll see that your's is no so bad at all!!

badger._2

nicola1982 wrote:

As someone who is just about to finish university my best advise would be to maintain at the moment. When you graduate you'll be able to really get into repaying your debt and your frugal living style will assist you in doing so. Holiday jobs are the best time to do any debt clearing, but in term time concentrate on your studies. If your overdraft is interest free then don't worry about it, upon graduating you'll be able to repay it at 0% gradually. This is when you'll need to be strict with the overdraft.

Student debt is inevitable for most and if you look at my sig you'll see that your's is no so bad at all!!

Hehe, thanks Nicola. Please note that i'm living with probably the richest student in Britain, my perspective of things can get a little warped at times... Is your debt not inclusive of your loan, too?

Hopefully i'm looking, in the long term, to leave university with as little debt as possible. I know it's silly, but if I keep telling myself this, i'll hopefully progress a little. I've got some pretty crazy career plans in my head, most of which require me to hit the ground running so to speak. A placement in my 3rd year so go some way to helping me.

Optimism is lovely.

scottishspendaholic

lynzpower wrote:

great for you trying to make efforts to cut back when a student, its one thing I never did and Im still paying for it now, 6 years on.

:T

Ditto! Badger, you are doing really well. I am still paying for mistakes I made when my OH and I were students and for years after we graduated, consolidating to buy clothes, go on holiday, then again to buy furniture, new kitchen etc etc. You name it.

I think what you are trying to do is very commendable, but please don't beat yourself up - being a student is not all fun and sometimes your earning power is not fantastic either so its the most you can do to keep your head above water.

Saying that though, if you are willing to try, give the repaying debts a go. Please speak to your girlfriend and let her know what you are trying to do. She might be more understanding about you not being able to do things or help you by not demanding things from you. I know some relationships have broken up over misunderstandings over money and expectations.

scottishspendaholic x

jesster_2

I sympathise with you, living with the richest student in the world. Honestly, some students just don't have to live on this planet.

But you're actually doing ok, and in the summer hols you'll be able to work your butt off and get some cash in the bank.

Although it's important to concentrate on your studies, if you CAN work a couple of evenings or afternoons or whatever a week then it honestly makes all the difference. Earning just £30 or £40 a week means you can live day to day on your earnings rather than digging a £40 hole further into your debts each week. I worked right up until the last term, and the way my debts accelarated that last term really brought it home to me what would have happened had i not worked.