Newbie just realised how much debt (Long)

Hippychick

Hello,

I have just joined after getting upset about how much I owe. I have prepared an SOA, sorry this is VERY long.

Monthly Income Between £1340.00 and £1400.00 dependent on bonuses (I’m using £1340.00 as a general guide)

Debts

Nationwide loan £276.99 pcm (6.9%apr and I have payment protection, this is needed I’ll explain later) loan is due to end November 2009. £11633.28 current balance)

Barclaycard balance outstanding £5515.00 (apr 14.9%)

Mint balance outstanding £3215.53 (apr 13.1%)

HSBC Overdraft £1300.00 not sure on interest rate on this one.

Basically total debt £21663.58 OMG (first time I have faced the actual figure)

Monthly outgoings

Joint account with my husband £500.00 (this covers all of our bills and food as we both pay into this account)

Car Insurance and Breakdown Cover £66.00

Mobile Phone £25.00

Petrol roughly 2 tanks per month £80.00

What I am doing to find a way out of this mess.

1. I have switched my current account to Alliance and Leicester I have not transferred my overdraft so this account can only ever be in credit and will give me more control of my finances rather than my salary always being swallowed up by my overdraft.
2. I have applied for an Amex red card to transfer the balance of my Barclaycard, the apr is a life of balance apr of 5.9%
3. If I can get it I am going to try and get the longest 0% balance transfer for my Mint card.
4. I am going to pay £200.00 pcm to Barclaycard/Amex debt.
5. I am going to pay £100.00 pcm to mint debt.
6. I am going to pay £50.00 pcm back to overdraft.

Overview

Incoming £1340.00

Less £276.99 (Nationwide)
£200.00 (Barclaycard)
£100.00 (Mint)
£500.00 (Joint account)
£66.00 (car Insurance and Breakdown)
£25.00 (mobile phone)
£80.00 (petrol)
£50.00 (overdraft)

Total outgoings £1297.99

Left over each month £42.01 (not much I know) anything left over each month I would like to put back into repaying the credit cards.

I hope to be clear of debt by December 2009.

Is this plan realistic, could I be doing it better?

Basically I took out payment protection when I took out the loan in Nov 2004, since then I have been diagnosed with Rheumatoid arthritis and run the risk of having to go long term sick (not if I can help it though) if I switched loans any new payment protection plan would not cover me for my condition.

Basically the reason I have got into trouble and I could kick myself for this is I got married and got a little carried away with the wedding plans, I also got sick when I got RA (I basically couldn't walk for about a month, am on medication now which means I can work full time) and had slight depression because of this which meant I turned to comfort spending. Not really an excuse I know but writing all this down has really made me realise how foolish I have been and how I need to get out of it.

The good thing is I have never missed any repayments and have a good credit score atm.

Well if you got through all of that without switching off well done!

Any ideas on how i could clear this debt quicker or is this plan realistic?

thanks

lynzpower

Welcome to you,

Seems all good from me, but I will say, what does the joint account cover?

Lynz
x

Hippychick

thanks,

basically £1000.00 goes into that each month

£625.00 rent
£112.00 council tax
£40.00 phone and broadband
£35.00 gas
£35.00 electric
£21.00 sky
£10.99 tv licence
£40.00 water bill
£120.00 food

basically thats the 1k swallowed up, i know we can make some cuts here so am going to look into that.

Little_Miss_Winner

Hi Hippychick,

Seems you are making in roads into your debt at the moment, though will agree with Lynz, you could do with listing what the £500 x2 covers in your joint account.
I am sure if theres any savings to be made perhaps your husband wouldn't mind you paying less in, even if it's only say £50 saved, it would be better off thrown at your debts?

Kepp posting
pot

Little_Miss_Winner

Sorry our posts crossed!....I need to type a little quicker!

Ali-OK

Hi and welcome.

Take a look at https://www.whatsthecost.com - there is a snowball calculator to tell you in which order to pay your debts off (highest APR first). You input how much you can afford each month, each debt, it's APR and whether you pay a fixed payment (the loan probably) or a percentage (cc's). It will tell you which one to overpay first and so on, thus saving you interest and will give you a DFD (debt free date).

If you do it now, then again once you've got your LOB and 0% cards, you'll start knocking months off that DFD - a great motivator.

Make sure you're getting the best cards by looking at Martin's CC section - BA Amex at 4.9% LOB or IF at 4.95% LOB would have been my suggestion instead of Amex Red, but I'm not knocking it because 5.9% is much better than some of the rates you've already got! With your overdraft, if you can get an SBT card (Super Balance Transfer card) you can SBT to your bank account, so putting your overdraft onto a credit card. You can do this with Egg Green cc, but check out the BT fees.

I know your debt seems huge now you've got a total figure, but hopefully we'll inspire you into some great money saving ways, you'll be able to overpay more each month and see the debt go down quicker.

You've made a good start already, so well done!

sarah0404

Hi, it seems as if you are doing all the right things. Have you had a look at http://www.whatsthecost.com/snowball.aspx ? If you enter all your debts, the APRs and how much you can afford to pay each month, it works out the best order to pay them all back.

You might want to try and switch some of your credit card debts onto a 0% balance transfer card. At least that way the money you pay towards it really makes a difference on the debt, rather than paying for interest as well.

2009 really isn't a long way off! Just think how well off you will be when you can keep all this money rather than paying it onto credit cards and loans. At the moment I have budgeted £400 a month for credit card payments. (I have 2 other loans too) I keep imagining what it would be like to put £400 into a savings account every month. I'd be rich!!!

Good Luck!

In_Search_Of_Me

he he Sarah when I stop paying over 600 a month in loans/credit I'll be loaded too...in about 10 years!! One thing I noticed hippychick is that you're sky/phone etc could be cheaper...I've just switched from sky back to the worst service at NTL & now get TV,phone,broadband for less (saved me £15 a month)so that may be worth investigating plus you may be able to get mobile cheaper? I rang in my lightbulb moment & got £10 reduction taking off text bundles/minutes...dont know if that helps? Mainly though a big hug as the sorting stage (which I'm still in!) is a bit of a mare but now that I've had my 2 days crying, then sorting, feeling angry with myself I now feel more aware of where I am at & also 100% in control of things & for the first time in living history end the month with no overdraft & it feels bloody amazing! Cant imagine how good I'll feel when all the loans, credit cards...gone!!

tightboy67

get rid of the luxury items you just dont need (sky and mobile phone) saving 46 squid a month. Are you on a water meter ? might be worth considering if you are not. Do you need broadband ? work out your monthly time on the net, then calculate on a dial up line.
cheers

BobProperty

Hippychick wrote:

...Basically I took out payment protection when I took out the loan in Nov 2004, since then I have been diagnosed with Rheumatoid arthritis and run the risk of having to go long term sick (not if I can help it though) if I switched loans any new payment protection plan would not cover me for my condition....

I'd read the small print very carefully as these policies have a habit of not being as useful as the lender likes to make them out to be.

Hippychick

thanks for all your hints guys I will look at the snowball calculator tonight after work