My first post about me and my debt!

Molanole

I've been browsing this site for a while now and now, thanks to all of you, I feel confident and inspired enough to post with my situation. Sorry if this is a little self indulgent but I'm thinking that by making my debt situation public I will just have to confront it rather than hide away from it.

I've just sat down and worked out how much I owed at my worst, how much I now owe and did the snowball calculator to see if I can make an improvement. I am staggered that I owe so much but thankfully I have a reasonably well paid job so can just about cover my monthly repayments. I'm also due a pay rise next month as I'm being promoted so that should help to speed things along a little.

At my worst point my debt was over £40K. Eight months later I have managed to get that down to £31K but I do pay out about £850 a month. Anyway, here's my SOA:

Incoming (after tax, NI and travel card loan): £2188 pcm
Outgoings:

Rent: £550
Bills: £200
HSBC Loan: £200.00
Egg Loan: £547.00
Credit Card: £100 (should have this paid off in a couple of months - have expenses to claim!
Student Loan: £100 - overpaying a bit so can pay off quicker
Internet: £30 - I know this is expensive but I'm tied into a contract for 12months
Contact Lenses: £10
Petrol: £15
Food Shopping: £150
Mobile Phone: £50 (just changed contract as was paying WAY too much)
Gym: £57

My main worry is that I tend to pay for things like car tax, insurance and servicing in a lump sum and I don't have much to spare once everything has gone out each month. I also don't have anything to cover other one offs like peoples birthdays and big things like Christmas. But I'm sure that this just sounds like whinging to those of you in more difficult situations than I.

Anyway, sorry for the long winded explanation and thanks for your patience if you have got this far. Truly, you have all been a real inspiration to me to grab the bull by the horns and deal with my debt problem.

Thank you!! A round of applause for you all :T :T :T :T :T :T

jesster_2

Is your food budget just for you? £150 is a bit high. You can get that down to £100 no probs, with meal planning and sticking to a list when you shop.

Also - why are you overpaying on your cheapest debt? (student loan). Overpay on the most expensive debt, whether that's your credit card or loan.

And can you reduce your gym by changing to a local authority one? they're actually not that bad these days! That could save you twenty odd quid a month. And your phone looks quite high - have you looked through the phone guide on here about how you can get cheaper / free calls?

I think one of the key things is to stop looking at tax, insurance and MOT as 'emergency' or 'one off' expenses. they're no surprise, you know they're coming! You need to put aside a little bit each month, even if it's only £20, it'll take the pain out of those months where it hits.

jesster_2

Just realised that last post sounded rather bossy and harsh! Didn't mean it to at all! Welcome to MSE, well done for posting, and if you stick around you're bound to get loads of helpful advice.

Old_iron_balls

Gym £57 :eek: whos that with ?
I hope they hand dry you with a towel after training.

I sell gym memberships for a living so its the main thing that sticks out on your SOA.
£57 p/m is £684 a year ouch !

If your not tied in to a contract id cancel straight away.
As Jester suggested try a local authority gym.
Nowadays on the whole they are ok.
We charge £28 p/m for a peak memberhip and £20 p/m for an off peak package.
Thats Gym, Swim, Sauna, classes.

£57 p/m really is very steep.

oh and welcome to MSE & good luck

Molanole

Hi, thanks for your reply. The food budget is for me and the OH. He earns a lot less than me so invariably I end up paying out for a higher proportion of all of our living costs - incluing rent, bills and shopping.

I'm only over paying by £7 on my Student Loan. It was some odd amount like £93.77 so I thought I would round it up to make it easier to remember. Rest assured, my plan is, as soon as I pay off the credit card (my most expensive debt) I will start overpaying against my Egg Loan (just like the snowballing thingy recommended).

The gym is a wasted amount. I'm so shattered by the time I get home from work (slogging my guts out to get this promotion!) that I rarely go. I might see if I can suspend it for a while.

I'm with Orange on the mobile and I'm stuck in a contract for another five months. I changed tariff last month so have yet to see how much improvement I make. £50 was me overbudgeting so I don't have any nasty suprises when the bill comes. I WILL be leaving Orange at the end of my contract though as they seem to be so much more expensive than the other providers (plus I have no reception at home!)

Thanks for all of the advice though. I'm going to keep at it.

Molanole

Thanks Iron Balls.

The gym is expensive and even that's a reduction as I've got joint membership with the OH. That's West London for you I suppose. I thought about a community gym but my nearest would be the dive in Acton. I think I may cancel and go for refreshing walks around Ealing Common!

Thanks for the advice.

CLAPTON

if you really want to get on top of your spending then you do need to do a detailed budget...that is everything you are going to (or likely to ) spend over the next 12 months. This is essential for two reasons, first because its the only real way of your knowing what the total spending will be and hence allows you to see how much is left for debt reduction but also so you can prioritise your spending and see where you can reduce. By adding all the spending..including yearly quarterly one offs etc. it allows you to 'save' in the months where spending is light and to use the savings when you have the heavy bills. in practice of course, as you are in debt, there is no point in having real actual savings (better to reduce debt and hence the interest) but it shows exactly where the money is going.
also, dont use grouping like 'bills 200' but break them down into elect, gas etc so again you can see what is actually spent and ask how essential it is.

at the top of this page there is a very worthwhile section called 'budget planner' ... well worth using

Reya

With regard to the large lump sums like the car tax, why not get an instant access savings account with your bank and transfer one twelfth of the total yearly cost into it each month? I do that online for my utility bills, rather than pay them monthly. My instant access account is with HSBC, and I just added together my last years-worth of bills, divided them by 12 and now put that amount over into the savings account as soon as my monthly wages go into my main account. That way it also earns me a bit of interest, and as soon as the bills come in I can either pay them directly from the savings account, or just transfer the amount I need back into the main account and pay them from there.

That method might also work for things like gifts etc. Just as you'd collect a couple of pounds in stamps from Tesco etc to help pay for Christmas food, why not put a fiver aside into the savings account to pay for gifts and the like, if you can afford to?

moxie_2

Which gym are you with? I live in West London (Acton) and used to belong to Virgin. Lovely place but sooo expensive, it had to go! Now we go to Acton pool now and again - not brilliant but OK for aqua aerobics etc. My daughter goes to some of the classes too which are good, and of course it's much cheaper.

Molanole

It's Holmes Place in Ealing. Thanks for the advice about Acton Swimming Baths. I guess I've always judged it from the outside!

Molanole

Reya wrote:

With regard to the large lump sums like the car tax, why not get an instant access savings account with your bank and transfer one twelfth of the total yearly cost into it each month?

Thanks Reya, whilst it goes against the grain with me to have any kind of savings when the interest on my debts is so high I can see the logic of saving every month for the one offs so that they don't hurt so much - I'd only end up paying for them on the credit card that I'd worked so hard to clear. I've taken your advice and set up an account so that I'm putting a little aside every month and won't notice is as much. It's an account where I have to give notice if I want to withdraw funds as well, that way I can't dip into it if I see some CD's that I want.

Thanks for the advice (where's that thanks button eh?)