20 and need to become debt free

jordanlawrance

Hi all

Really struggleing with debt atm, im young and have always ignored it etc thinking ill earn more and pay it off later.

my take home is currently £850

Debts

Loan £199 a month for the next 36 months
Credit card 1 @ 11.9% £1000
Credit card 2 @ 15.9% £2000
TV etc £27 a month for 36 months

Outgoings

Phone bill £40
Loan £199
Credit Card 1 £75
Credit Card 2 £75
Car ins £85
Tv £27
Fuel in car share to work £70
My own Fuel £80
Football ( playing ) £60 ( 3 x week @ 5 )

Leaving £139 to cover shopping and trying to live the life of a normal 20yr old.

As you can see im in a bit of a mess.

Within the next 6 months I should be due a pay rise to 1130 a month take home, as i move from trainee to executive

I will receive a bonus in Feb of £500

Over christmas I should be able to scrape £200 in "presents etc"

Untill I get my pay rise I cant see me clearing my debt, and I would like to clear the credit cards etc before 2011

Im 21 in august and my dad has been saving to take me, bro n sis to vagas and I dont want to tell him I have no money etc to go

I need to save for that also and just feels like im running in circles any help on how to plan my life better would be great

I intend after any advice to update month by month and let you know how I get on.

Thanks all

JL

wizk1

"Leaving £139 to cover shopping and trying to live the life of a normal 20yr old." Firstly, you need to take the situation seriously, which I agree you are beginning to, but not fully. Sacrifices will probably need to be made, such as going out less frequently, or changing your venue, etc.

Secondly, complete an SOA (http://www.makesenseofcards.com/soacalc.html) so we can make educated decisions on what types of debt you should tackle first. Paste the summary of this SOA back on this thread, and we'll take it from there

jordanlawrance

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 855
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 855
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 60
Clothing................................ 50
Petrol/diesel........................... 80
Road tax................................ 10
Car Insurance........................... 85
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 70
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 10
Entertainment........................... 140
Holiday................................. 50
Emergency fund.......................... 0
Total monthly expenses.................. 650

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 1000
Total Assets............................ 5000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................6000......189.......10.9
CC.............................1000......30........11.9
CC.............................2000......35........15.9
TV.............................800.......27........5
Total unsecured debts..........9800......281.......-

Monthly Budget Summary
Total monthly income.................... 855
Expenses (including HP & secured debts). 650
Available for debt repayments........... 205
Monthly UNsecured debt repayments....... 281
Amount short for making debt repayments. -76
Personal Balance Sheet Summary
Total assets (things you own)........... 5,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -9,800
Net Assets.............................. -4,800

wizk1

jordanlawrance wrote: »

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 855
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 855
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 40 -How far into your contract are you? You could try ringing your mobile network and ask them to lower your minutes if you don't use them all
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 60
Clothing................................ 50 - This is a bit much to spend a month, perhaps this can be lowered?
Petrol/diesel........................... 80 - If you don't do a lot of miles, look at the article on increasing your fuel efficiency by changing your driving style. You'll be surprised by how much you can save.
Road tax................................ 10
Car Insurance........................... 85
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 70
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 10
Entertainment........................... 140 - The killer area! The amount you could try to save here is indicative of how seriously you take your situation.
Holiday................................. 50 - Again, see above
Emergency fund.......................... 0
Total monthly expenses.................. 650

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 1000
Total Assets............................ 5000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................6000......189.......10.9
CC.............................1000......30........11.9
CC.............................2000......35........15.9
TV.............................800.......27........5

Try applying for a credit card with a year's 0% balance transfer promotion if you think you can pay off your credit card debt off in a year (use your bonus towards this), then transfer the debt from both of your existing cards to this. Alternatively, look at the other long-term low-rate balance transfer deals that are available. If you've no luck in applying for a new card, concentrate on paying off the most expensive debts first. ie. your 15.9% APR card. It look slike you're stuck in the trap of making only the minimum payment on your cards. This is a bad idea as you're forever going to be paying these debts. Focus on paying more towards your credit card bills. Is your TV 50% interest??? If so, get this cleared ASAP
Total unsecured debts..........9800......281.......-

Monthly Budget Summary
Total monthly income.................... 855
Expenses (including HP & secured debts). 650
Available for debt repayments........... 205
Monthly UNsecured debt repayments....... 281
Amount short for making debt repayments. -76
Personal Balance Sheet Summary
Total assets (things you own)........... 5,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -9,800
Net Assets.............................. -4,800

Obviously, when your car insurance comes up for renewal, shop around for a better quote with other companies, and also try ringing your insurance company and see if they will offer you a discount for renewing with them.

Try and get into the habit of paying off chunks of your CC debts the day you get paid. That way, you'll be less tempted to squander the money on other things during the month.

Keep us up to date on how you're getting along, and don't be afraid to ask for help if you need it. We've all been there.

chequeout

Hey mate

Firstly - good on you for recognising this - and for posting on here which means you are taking the potential problem seriously. I wish i had - I was in a similar situation to you, buried my head in the sand and got into LOADS of problems...

To me, straight away, cut your credit cards up. I know it will be hard - but, to someone who once had TEN cards on the go, I wish I had dispensed with them altogether. Just think, what is more important, a new pair of jeans or a lifetime, possibly literally, of debt?? So, although you are paying £75 a month for each of them, at least you will know there is no chance of the payments going up further.

It will be hard - but use your 500 bonus to pay off a lump of one of the credit cards. That wuill hopefully reduce your repayments on one of them to around (rough guess) 35-40. Use this cash saved to plough into the other card repayments.

I'm not going to preach and say get a pay as you go phone and never ring or text, don't go out socialising etc as you are young - (so am I lol) and you have to have a life like you say. but, I reckon you may have to wind things in a little - just be sensible or you'll end up like me......

stoocake

I've been there too when I was 20, and all I can say is that you wanna curb this asap. I'm 23 now (24 in a month) and I've waited too long to do something about it, so it's absolutely fantastic that you've got it in mind to sort it. I wish you all the best in sticking to your plans. I'm in a horrible situation now where I'm supposedly in the prime of my life, but haven't been able to afford anything at all for 3 years because of it.

There's no magic answers, but you don't have to cut down (too much) on socialising - allow yourself a reasonable budget to cover you when you go out. Mine is a maximum of £20/week, which is to include my lunches at work, so the more sandwiches I take in, the more I can spend when I'm out. It works well, because in truth I spend less than £10 a week socialising(and lunches), and really feel day-to-day that I'm doing well at reducing debts.

I hope this is of some help.

snagglepuss16

i agree you have to take this seriously. the thrill of spending is great, i should know i had almost £15000 of debt by time i had just turned 24. i had to enter into a trust deed a form of bancruptcy where you pay some money back. i would advise you to get a grip and not let it run away with you. i agree your £140 on entertainment is excessive. also your spend on fuel and the money for car share need to be looked at. cant you try and use your car less?. also some garages have a money back scheme for buying fuel,this could be useful for car share. i think you need to try and consolidate to a 0% card. things often seem esier when all debt is held together. i agree pay a chunk when youre paid that way if youre left skint you can feel good you have spent it wisely. even though it might not feel like it at time!!!!!!!!

Redbedhead

Have you thought about getting a second job, maybe in a bar in the evening? It has 2 positive effects - you earn money and you have less available evenings to go out and spend money! As well, you still get to socialise to an extent.

Redbedhead

jordanlawrance wrote: »

Hi all

Leaving £139 to cover shopping and trying to live the life of a normal 20yr old.

I think maybe you have to reconsider your idea of the life of a normal 20 year old. The fact you have got in debt means you have probably been spending over your means and therefore living a life that you can't afford. It might be you have been trying to keep up with friends who earn more but if that is the case you need to stop now or it will only get worse.