£20k of Credit card debt

lisawood78

Hiya, here's the link I think you are looking for.
http://forums.moneysavingexpert.com/showthread.html?t=107280

PNPSUKNET

the sky really needs downgrading thats expensive, saving £80 a month for presents?

cocktailsavings

Daisy .. why is your Sky in excess of £80.00. I find that extremely high, I pay £20.50 a month and that includes, line rental, TV and Sky broadband and a couple of the packages. We used to have Sky Sports and Movies and with those on top it was costing around £50.00 a month. I think £80.00+ is far too high perhaps you could think about reducing your current package and putting the extra money towards paying off your credit cards.

Also rather than get a loan try and consolidate your credit cards into one on a 0% interest see if that would work out better.

Not sure what Sharesave is but if it is any type of savings account then you are better off using that money to repay your debts before you can think of saving. I have been browsing MSE tonight myself to figure quicker ways to get out of debt and there are plenty of money saving/reducing spend etc information available.

Hope this is of some help to you. Don't worry a lot of us are in the same boat and that's why we are here too. Zoe

property.advert

daisy164 wrote: »

Ok, heres what we have coming in and going out each month:

Incomings

My salary: £850
Husbands salary: £1525
Family Credit: £132.80 (I presume you mean Child Benefit ?)
Child Tax Credit: £730


Outgoings

Mortgage: £584 (not sure what your product is or the amounts involved. Certainly review)
Bank Loan: £212 (review, even if you cannot do anything about it)
Sky: £82 (I have Sky plus 2 options at £18.50
Gas: £46 (check http://www.uswitch.co.uk/ and look at cashbacks for switching)
TV Licence: £10.14
Electricity: £70 (go to http://www.uswitch.co.uk/ and see if you can do better. Southern Electric have (for me) the cheapest new product out - check out cashback)
House Insurance: £34 (I am positive you can reduce this)
Car Insurance:£ 75 (have and need 2 cars) (look at multi car discounts and obviously shop around including cashbacks)
Credit Card Repayments: £450 (work out the biggest costs and after checking your credit files, think about transferring some to low or zero interest deals)
Sharesave: £30 (I think this is very low priority and could be forgone)
Dental Plan: £13.99
Boiler breakdown cover: £12.50 (depends upon your boiler, age, etc.)
Savings: £80 (to cover xmas, birthdays, emergencies) (£1000 a year not paid to debts ?)
Mobile: £35 (can be reduced unless for work)
Pet Insurance: £15 (??????)
Water: £31
Council Tax: £110
Kids trust funds: £40 (this can be stopped)
Childcare: £700 (will shortly be getting 2 x £243 childcare vouchers deducted from our income above to cover this so should save a little on tax and NI)
Pension: £20 (meaningless amount - review)
Shopping: £270 (is food and clothes and all other things for all of you only £270 a month ? Seems low to me)
Petrol: £150 (you say you need to run 2 cars, possibly little in the way of savings here but 5p a litre off like Morrisons was doing can help)
Store Cards: £84 (only a couple of balances, will be clear in 2 months) (clear and leave only for when they give you large discounts and you would buy it anyway. Or cut up).

Credit card debts are across 5 different cards with balances ranging from £9200 to £1500. (review and check credit file to assess possibility of changing to lower rates)

Feel free to scrutinise and critisize, really appreciate the outside view on all this as desperately want to be debt free in the best possible way.

Thanks

Basically, I think you are wasting money on things you cannot afford such as Sky, Xmas savings, various savings plans, your utilities bills and insurances, You can work out your fuel savings at http://www.uswitch.co.uk/ and check for cashbacks on the various cashback sites. Same with insurances.

My Sky (+2 options) with broadband and telephone line comes in at 17.5+2+11+5 = 35.5. More BB could add £5 I know but I have too much to watch, Sky movies is rubbish and Sports is not worth the money, if you are economising.

Worryingly, you don't seem to have a budget for pocket money that you spend. Where does that come from ? Also, confirm your food purchase costs.

I'd guess you can immediately see £1000 from Xmas etc. £500 from Sky reduction, £200 from fuel, £100 from insurances, £1000 from stopping savings plans so there is £2800 a year from nowhere.

Don't get another loan, you can get rid of these debts in maybe 3 years if you pay £743 a month and the interest rates are 20%. Get the % down to 15% and you pay £693 a month for 3 years. You are already paying £450 and I've identified some £200-250 a month savings straight away. Perhaps go to 4 years at £557 at 15% to clear £20,000.

mogchops

I am just intrigued on one point - your monthly salary £850, hubby £1525, & you are entitled to £730 a month child tax credit?

My salary is £830, hubby is around £1800, and we are only entitled to the minimum £40 odd!!! Maybe I am doing something wrong here?! I have 2 children aged 10 & 6, how old are your children?

Redbedhead

Is child benefit included in your income anywhere?
I think you need to stop the child tax fund payments.
I think all my other suggestions have already been posted so just wanted to say good luck to you.

daisy164

Mogchops - I was made redundant 6 months before my second daughter was born so still have one under 1, my other daughter is 4. I was intrigued myself but went through every single penny earnt and it is all correct. Think it is all to do with having a baby as it will drop right back down next April.

Redbedhead - Child Benefit is the family credit, I used the wrong wording!

We made a huge first step this morning and destroyed all of our credit cards. It was painful but felt like a weight had been lifted at the same time. I am going to contact somebody about reviewing the mortgage and then will work through each item at a time. The savings will stop, well most of it as I still want to build a fund up for xmas as I don't want my children to go without and don't want to run up more debts doing it!

Thanks for all the advice so far. I thought I was managing things quite well until I really sat doen to think about it. Isn't it crazy how you can those control so easily.

Thanks folks

Mrs_Tradition

Hiya
Just to second what people have said on here already - do not get a loan to pay loans off. Only transfer to a 0% if you can, no point if you know you willl be rejected as already have too much owing.
I paid loans with loans and cards with loans - worst thing ever.
There is always light at the end of the tunnel though. You totally need to cut your non essentials - we did and it's made a big difference. Keep looking round these boards, I've been here a while and every day I find something else that inspires me. People's signatures showing how much they have achieved is one thing I love to see, toshow me it is so-able. Also the debt free roll of honour board showing people who have done it - Fascinating and one day I will be on there.

Good luck onyour journey.

xx

Little_Miss_Uni-Debt

Hi and welcome.

I don't know if any one has mentioned this already or you have worked it out but that 20 year loan at 174 pcm = total repayable of £41760!!!

It may 'only' seem like 8% but thats APR so its each year! Which over 20 years is a huge amount.

I understand how debts can build up, with yours being over the past ten years it means on average you have overspent by about £38 each week. Which doesn't seem much! I know, i'm in the same boat! The odd tenner here and there

Every week you can throw that £38 back at your debt you're doin a great job. I understand there will be interest involved making your debts bigger each month but surely there is no point handing £21760 to a bank along with your original 20k back when you don't have to!

I would use this as a starting figure and see how much interest you can shave off that £21k price tag of that loan by tackling your debts without a consolidation loan.

If you saved that £174 in an isa every month it would take you less than 9 and a half years to get £20k. No where near that 20year repayment period.

And the more you save the sooner and sooner your debt free date gets

GOOD LUCK! :T

gfplux

Hello daisy164,
You should really put all your figures into the SOS here - http://www.makesenseofcards.com/soacalc.html




This will automatically re total any changes you make. You can then save it and change and update as often as you want.
It is also the format that most people on the site are used to and you are more likely to get even more help if you do it and repost it again on here.
It also asks you questions like the the % rate on your cards. It might sound crazy but many of us did not know the interest rate we were actually paying!!!




Also start a spending diary TODAY to find out exactly where your money goes. That knowledge will shock you but also give you power. You only need a pen and a paper.


Good Luck