Working hard to pay my debt off, but is there a better way?

talltomthepom

Hi guys, this is my first post so please bear with me! I've been browsing the forums for a few weeks now and receiving the weekly emails for months. Anyways, the time for chit chat is later, i'm going to get straight to the point

My debt:

I have 1x Mint Card @ £3100 (will be £2900 later today)
I owe my Dad £4500

I do switch my Card over to take advantage of the interest free balance transfers.

My monthy income:

£1,109

My monthly outgoings:

Credit Card repayments: £200
Dad Debt: £210
Car Insurance: £67
Petrol: £200 approx (it varies on where I go, plus petrol costs keep rising!)
Mobile: £50
Rent: £160
Work Lunch: between £60-80 a month

Situation:

Ok, I love at home with my parents. I spent a year travelling around New Zealand which is where most of my debts came from. When I came back it took me about 6 months to find a job. I was doing cash in hand work inbetween but it wasn't regular and so I added to my C/C debt. When I got my job I had to buy a car which my Dad stumped up for (£1,300) and added to what I owed him. As you can see I pay my debts of at £400 a month, never any more, never any less. I have no savings so if anything goes wrong (ie car)I use my C/C. I've just been told that my parents intend to sell the house (they're splitting up) and I have to sort out a place to live. I know I could live with either one of them but I don't view that as an option because it would cause too many problems (although it would be easier for managing my debt). I can't get on the property ladder with no deposit (my parents are looking into if it's possible to give me an advance on my will for a deposit). Now I think that leaves me with no choice but to rent a room or a house with friends. To do this I need to reduce my debt payments (in my opinion).

Should I look at getting a loan to pay off all my debts and reduce my monthly debt repayments so I can save a bit of money for when I start to rent? Or should I continue paying them off as I am for the time being and deal with the rent issue when it comes?

Also can anyone advise me how my parents can go about looking into giving me an advance on their will? I need to give them a kick up the backside!

I'm aware that I spend too much (ok far too much!) money at work and I'm trying to get into the habit of making a packed lunch to take with me. This would save me £60-80 a month. The remainder of my salary goes towards keeping my life as sane as possible whilst living with my parents!

I recently screwed up on my mobile phone contract and got tied into an 18 month contract with very poor text and minute rates. It really was a schoolboy error, especially after I had read what was on this site!

.............

So I've just read through this and it's not as clear as it could be, sorry! I hope someone has managed to read this far as it is a mammoth essay, if you have, thank you! If you have any questions please ask!

Take it easy,

Tom

ms_london

talltomthepom wrote:

My debt:

I have 1x Mint Card @ £3100 (will be £2900 later today)
I owe my Dad £4500

I do switch my Card over to take advantage of the interest free balance transfers.

My monthy income:

£1,109

My monthly outgoings:

Credit Card repayments: £200
Dad Debt: £210
Car Insurance: £67
Petrol: £200 approx (it varies on where I go, plus petrol costs keep rising!)
Mobile: £50
Rent: £160
Work Lunch: between £60-80 a month

Hi Tom!! Welcome to MSE.!! Firstly, I dont think that your parents should give you an advance on their will - I think you should stand on your own two feet & get yourself out of this mess!! It sounds as though they have enough to deal with at the moment, so I would be more concerned about making sure theyre ok!!

Do you need to buy a place of your own? Can you not just moved into a shared house/flat for the time being? Even with what you have listed above, there should be another £162 floating around..

Do you only have the one cc? What is the APR? £200 on petrol each month is extortionate? Is this personal use or work? I presume personal - are you a boy racer? (you know the type) - couldnt you find a more cost effective hobby? Could you share lifts with friends? Even if you could halve it it would make a difference!

I admire the fact that you went travelling - I go in Aug - but I WILL NOT come back with debt - if anything, I'll have some money put aside so that I dont have to start from scratch - I WILL NOT be moving back in with my parents thats for sure :0)

I hope this helps.xx

talltomthepom

I agree with standing on my own two feet. But being honest, if your parents offered you the chance of a deposit on a house to get you on the property ladder would you honestly turn it down?

I don't have to buy and renting is possible. However it is the age old debate of 'is renting dead money that could be used to pay off a mortgage?'

Yes I only have one CC. I don't pay any interest on it at the moment and will be switching to another interest free CC when this one expires.

My petrol bill is so high because I commute 300 miles a week to and from work! I'm in no way a boy racer! I have a little 1.4 VW Golf which is my pride and joy because I love VW's. I occassionaly head up to Doncaster to see my 2 nephews but this is only every other month.

Travelling was an incredible experience and it helped me grow up. Yes I came back in debt but i'm glad I did it. If I had the chance to do it again, I would. But i'd try to do it without the debts! However that is not the case and now I have to deal with it.

Where are you going travelling and for how long? Whatever you do, I bet you end up living with your parents for a short while on your return, just don't get stuck in the rut! Enjoy it, you'll have the time of your live!

Cheers.

ms_london

talltomthepom wrote:

I agree with standing on my own two feet. But being honest, if your parents offered you the chance of a deposit on a house to get you on the property ladder would you honestly turn it down?

I don't have to buy and renting is possible. However it is the age old debate of 'is renting dead money that could be used to pay off a mortgage?'

Yes I only have one CC. I don't pay any interest on it at the moment and will be switching to another interest free CC when this one expires.

My petrol bill is so high because I commute 300 miles a week to and from work! I'm in no way a boy racer! I have a little 1.4 VW Golf which is my pride and joy because I love VW's. I occassionaly head up to Doncaster to see my 2 nephews but this is only every other month.

Travelling was an incredible experience and it helped me grow up. Yes I came back in debt but i'm glad I did it. If I had the chance to do it again, I would. But i'd try to do it without the debts! However that is not the case and now I have to deal with it.

Where are you going travelling and for how long? Whatever you do, I bet you end up living with your parents for a short while on your return, just don't get stuck in the rut! Enjoy it, you'll have the time of your live!

Cheers.

Hello!! Sorry for sounding like a cow in my original post :rotfl: :rotfl: !!

I totally disagree with the whole will thing anyway - and kids expecting parents to leave them X, Y, Z & relying on it (not saying you - just in general!!). I would rather my parents enjoy their money than worry about leaving it for us.!!

Could you move closer to work? That is a long commute!! Or could you work closer to home? I suppose if you buy a place you have to take into account where you want to be living & what you can afford in that area etc etc. £200 is an awful lot to be paying out!! And that doesnt take into account car insurance/tax/mot/servicing....!!

Granted - you probably did a better thing by getting in debt my going travelling (and you dont even owe that much) than me, who basically just wasted £19,000 on who knows what!! But I have learnt from that, and I dont want to be in debt at all - ever!!

I can assure you that I WILL NOT be moving back in with my parents - there is no way on earth (no offence parents!!). That is one thing I am sure about. A village in the middle of nowhere? No thanks!! I'll move straight back to London (if I come back that is!!) ;0) - Am going to Oz for 12 months, then NZ for 12 or 23 months and then wherever I feel like on the way back.....

I think you need to set out a budget & stick to it. Is your dad happy with that repayment each month or do you plan to increase it? Could you start putting a set amount into savings? Is there chance of an increase of income?

xx

Imelda

Hi Tom,

I have just read through your post and it seems to me that you are being a little unrealistic about buying your own place (I know I was!). It's not just the cost of the deposit and mortgage, there is also the solicitor's fees, stamp duty (if applicable), council tax, electricity/gas, water, tv licence, insurance, food.... I bought my flat last september, I thought I would be ok as I had been saving the equivalent of my mortgage each month towards a deposit, I was very wrong. Only 6 months later I was £6000 in debt, I was lucky that I got a payrise and bonus which has cleared most of it.
My advice is: be grateful that your parents have been able to help you out, stay at home until you have at least cleared your debt (which at the rate you are going will be soon) and then start saving for when you do move out. I know it is hard returning to the nest (I have done it twice!) but it's not forever!

lynzpower

I actually think things are not that bad at all here TBH. You are paying off debt to the tune of 410 a month at the mo, and if you take lunches and save a bit of your petrol ( just cut out the unneccasary journeys) you therow the rest at your debts you will be paying off 500 a month. Not bad going in fairness.

re- your mobile You could call them after 6 motnhs and downgrade to a smaller/ better package, thats not a problem really.

IM reckoning your parents arnt trying to get you out just yet, and even if they put the house on today, you wouldnt have to leave for at least 2 months....

How much more debt do you have to pay off?

talltomthepom

Haha! You didn't sound like a cow, you were giving your opinions!

I can see your point about people relying on their parents. However some people have no choice. I do have a choice but it'll take me another year or 2 to become debt free, then another year or 2 to save a deposit! That is working on having no pay rises in that time (fingers crossed that isn't true!).

Moving closer to work has crossed my mind but at the minute I've just had my contract extended by a further 6 months until October. I don't want to move until I have made my position permanent or found a new job!

Same scenario as me, I live in a village in the middle of nowhere! Luckily I have a few friends in surrounding villages and a local football team to keep me occupied!

Didn't do Oz, but New Zealand is beautiful. I could give you advise on where to go and what to see but I prefered finding that out for myself. Needless to say I plan to move out there before I'm 30 (another reason why I want to be debt free and get onto the property ladder!).

I think my Dad is happy with the amount of repayment each month. If I really do budget myself, I think he would prefer me to clear my own CC before paying off his debts (he has been really good to me). I could start to save but is there really any point? As Martin says, savings are best used to pay off debt in this situation.

I don't know... It's hard to imagine myself being debt free. I can't believe you did it from £19,000!! :T

talltomthepom

Imelda - The only way I would be able to buy a house is if my parents could help me out with a deposit. Even then it would be tough. I probably wouldn't be buying on my own. My friend is in the same scenario and we would look at buying a house together. We also have another friend who would be interested in renting but that then brings into play a whole new set of laws regarding landlords and tennants. I'm not going to do anything rash, but my parents are definately selling this year so I want to be as best prepared as I can.

Lynzpower - I owe £7400 in total. I think it's realistic for me to pay off more than £400/month and will look into it during this weekend. I often do some cash in hand gardening work at the weekend and I'm contemplating using this as my 'disposable' income for going out, etc so I can pay off even more on my debt.

Thanks for all the advice so far - I really should do some work but this place is so addictive!!

lynzpower

Oh, OK, 7400 is quite a bit, sorry I missed that.

ms_london

talltomthepom wrote:

Haha! You didn't sound like a cow, you were giving your opinions!

I can see your point about people relying on their parents. However some people have no choice. I do have a choice but it'll take me another year or 2 to become debt free, then another year or 2 to save a deposit! That is working on having no pay rises in that time (fingers crossed that isn't true!).

Moving closer to work has crossed my mind but at the minute I've just had my contract extended by a further 6 months until October. I don't want to move until I have made my position permanent or found a new job!

Same scenario as me, I live in a village in the middle of nowhere! Luckily I have a few friends in surrounding villages and a local football team to keep me occupied!

Didn't do Oz, but New Zealand is beautiful. I could give you advise on where to go and what to see but I prefered finding that out for myself. Needless to say I plan to move out there before I'm 30 (another reason why I want to be debt free and get onto the property ladder!).

I think my Dad is happy with the amount of repayment each month. If I really do budget myself, I think he would prefer me to clear my own CC before paying off his debts (he has been really good to me). I could start to save but is there really any point? As Martin says, savings are best used to pay off debt in this situation.

I don't know... It's hard to imagine myself being debt free. I can't believe you did it from £19,000!! :T

I think that you could be debt free a lot sooner than a couple of years if you put your mind to it. Also, if you hope to move to NZ before you are 30 - unless you are using the property to make a deposit - wouldnt you rather just build and build on your savings to go out there with?

I dont think it would hurt to save - as Lynzpower says - you are still paying an adequate amount off each month, so its not too bad!! You just need to decide where you want to be & how you want to get there!!

I cant believe I did it from £19,000 either - :eek: !!

What do you mean that some people have no choice but to rely on their parents?

My parents were horrified when they found out about my debt & couldnt have helped me out even if theyd wanted to (but they didnt want to!!) and if they hadnt have done the "tough love" thing (and sent me to live with my nan & gdad - at the age of 22, yes i know!!) I dont think I would have been quite so eager to get myself sorted & get myself into London where the money was (plus I always wanted to move here, so it made sense!!) - they wont be able to help with a deposit on a house or a wedding - but it doesnt matter to me, and I dont expect it - some people do which I think is wrong!!

I agree about wanting to see whether your position is made permanent first.

Are you over the travel thing then for the time being? As having a mortgage can tie you down. Sure you can rent it out, but it makes it more difficult...

xx

surfcat

talltomthepom wrote:

I don't have to buy and renting is possible. However it is the age old debate of 'is renting dead money that could be used to pay off a mortgage?'

The age old debate is dead in the water I'm afraid. In many parts of the country there's such a supply of rental property (all those BTL) that monthly rent is cheaper than the INTEREST-ONLY portion of a mortgage. When you consider you could rent with 2 or 3 others, you could really save a massive amount of money towards a deposit for a few years' time.

Plus in many areas of the country where prices have risen most dramatically (the north), bad areas in the south, the impending price crash will really make things go tits-up. (Interest rates are only going to go up in the next year so).

To be honest, on your salary, I think you'd be a fool to consider buying.

see https://www.housepricecrash.co.uk for more info.