Looking for help

bambi1980_2

Dear all,

I'm finding myself in a financial cul-de-sac at the moment and need some ideas and inspiration to help me out of this.

My current take home salary each month averages between £1350-1400 depending on how much overtime I do.

My outgoings -

£325.74 mortgage
£33.00 home/contents insurance
£64.00 council tax
£30.00 gas/electricity
£15.00 water
£11.00 tv licence
£54.00 car insurance
£35.50 gym
£42.00 telephone/broadband
£35.00 mobile
£190 credit card
£100 catalogue
£120 food
£40 petrol
£68 cigs
£60 going out

Total - £1223.24
Remainder - £176.76 (from £1400)

This remainder I never seem to see because I am always well into my £500 overdraft limit when I get paid on the 15th of every month.

I currently owe -

£55000 mortgage (4.95% fixed 2 yrs until July 2007)
£8300 RBS credit card (reverted back to 16.9%)
£830 student loan
£625 Littlewoods catalogue
£1000 Natwest overdraft.

I haven't started paying off my student loan yet and rarely pay anything off my Natwest overdraft as I no longer use the current account.

I feel that at this moment in time I can either get a loan out to consolidate all my debts but I am having trouble getting one as my credit rating is low. I have no arrears, CCJ's etc but I think due to the number of searches I've had it's lowering my rating. I was considering getting a loan out with the credit union at my work but the interest rate is approx 8.9% so a £12000 loan would cost about £180-£190 a month over 7 years.
The other option was to remortagage - I have taken advice from a mortgage broker who said the best deal he could find for my circumstances (if I added all my debts to the mortgage) - was a 5 year fixed rate at 5.69% but the brokers fee is 1.95% of the sum borrowed (approx £1200), arrangement fee is £1085 plus all the other fees which would bring my monthly payment to £443.

I don't know what to do at the moment so I'm looking for some advice and reassurance. I do know where I'm going wrong but I'm just about keeping my head above water.

Any advice will be much appreciated.

Many Thanks,

Lucy

jessicamb

Hi Lucy

I'm new to all this too so big hugs. I'm sure one of the DFWs will be here soon to give you some really good advice and support but looking at the list the following stands out:

Cancel the gym
Quit the fags (I'm a smoker too - not as easy as it sounds I know)
Can you reduce the going out?
If you live on your own are you getting the single person discount on your council tax?
Can you transfer some/all of the debt on a 0% balance transfer?
Try the Money Saving Old Style Tips to cut the food budget - I'm going to try and do this as some of the posts on there seem to cut the costs dramatically from where I am now.

Good luck and let us know how you are doing.

Kevicho

(the above post) Spot on

Also can you get a cheaper mobile and also look at cheaper broadband and telephone?

I would also list all you debts by there interest rate (excluding mortgage as that is the last thing we pay and the student loan), pay all the minimum amounts and then whatever is left pay it all into the highest interest rate debt (which is the credit card)

Other ideas include 2nd job, sell stuff on ebay you dont need, take sandwiches to work, get a lodger, the options are there

Kevicho

also forget the remortgaging and consolidation loans, if your credit record is bad, more applications may push it over the edge :S

CLAPTON

you should keep a spending diary to find out where all the money actually goes..its easy to forget the work lunches, magazines, the old taxi, haircuts snacks coffees etc. that unfortunately add up at an alarming rate.

also add up all the one-off costs that probably just end up on the credit cards. e.g. you list car insurance and petrol but what about car tax, MOT, servicing, breakdown insurance, savings for the odd tyre etc. also do you spend anything on holidays, presents at birthdays and xmax, any purchases for the property.....all these need to be saved for rather than just put on the CCs.

once you have done that you will have a better idea of why your debts are growing. you will then be able to prioritise your spending and to se whether you can actually afford the gym or 35 on the mobile or 60 for going out

until you start to live within your means, consolidating debts simply delays the problem for a few months until the over spending causes the CC balances to grow again and you're back where you started but with a higher level of debt.