Looking for advice please

Wednesday

Really hoping someone can help me

I've managed to get myself into a situation where I'm buying my groceries on my credit card every month, and I would really appreciate anyone's help or advice on how I might get myself out of this.

To cut a long story short, my debts started mounting after I started living on my own in 2003. I had just split up with my partner, graduated for the 2nd time, and was temping for the princely sum of £5.00 per hour - it took me 6 months on this salary to get a qualified post, all the while I was struggling financially.

Two years on, I was settled in a professional post and managed to get a mortgage. However, I still have student debts, as well as an accumulation of credit debts that are now starting to become problematic. The flat that I was able to buy requires internal alterations as well as central heating, if I ever want to sell it on. I have £2000 saved in an ISA to pay for essential work moving my kitchen - just waiting for planning permission to go ahead.

My income and expenditure is as follows:

Monthly salary - £977

Expenditure - 11.49 Contents Ins.
25.00 Factors
10.99 TV License
13.10 CILIP
2.00 Oxfam
25.00 Toucan
75.31 Smile Loan
50.00 Egg Card
255.71 Mortgage
8.76 Pinnacle
201.00 Co-op VISA
78.00 Council Tax
26.50 Travel Pass
43.00 Gas/Elec.
10.00 ISA
5.99 Amazon DVD


Total 922.77

As you can see, there ain't a lot left for groceries, or anything else that might crop up, such as a social life (that's what the DVD rental is for). Apart from the Gas/Elec with Scottish Power, I've shopped around for cheap deals with utilities, and really don't see how I can cut back on much else. I use public transport, and a PAYG phone.

My main concern right now is to figure out how to make the money I'm paying out each month on credit debts reduce the balances in the fastest way possible. I have tried to apply for a low rate LOB card, but was refused (it was the Capital One 'No hassle' card).


O/S Balance Term Repayment
(months)
1800.00 50.00 Egg card (15.9%)
10,000.00 201.00 Co-Op (16.9%)
6505.60 84 (80) 81.32 N. Rock (5.6%)
3448.40 72 (62) 75.31 Smile (9.9%)



In addition to the above, I owe my mother 2160.88, and I have outstanding student loans of around 2500.00.

The total balance of my credit debts is starting to keep me awake at night, and I am only too aware that the interest rates on my credit cards are shocking. I have never defaulted on a single payment in my adult life, but it must be obvious that I am over-committed and that's why I'm being declined for cards with better interest rates that would actually help me pay the debts off instead of just the interest.

I've had a few thoughts on how I could resolve this, but would welcome advice from anyone who could help. My idea at the moment is to ask my bank (the Co-op) to give me a preferential BT rate for the egg card, and see if they will reduce the interest rate on the Co-Op card. My current account is with them, as well as the Smile loan. The trouble is that while this will help pay off the Egg card, my repayments will be huge, and my available credit tiny - I really rely on the card to fall back on every month. It just feels like sometimes banks want to keep you locked into huge APRs and aren't that bothered about whether you pay the cards off or not.

I realise that I'm quite fortunate to be working, and not to have any dependants - I know there are lots of people worse off than me. But any suggestions are most welcome - thanks

Emmzi

Hi Wednesday. Good place to come, well done for posting. Sure lots of ideas from everyone will come soon, but here's some initial thoughts.

Your expenditure inc. mortgage but excluding debts is 501 (I think!), so lets say £600 including food, toiletries etc.

That should leave 322 for debt servicing.

To meet your current repayments you need £416 (plus mum plus student loan, but let's park them for now)

So you need to bring in around an extra £94 a month to stay on top of things (or reduce outgoings by same.)

Sounds to me like 2 nights pub job a week..?? Anything you can do to reduce interest payments will help, but extra work will, too.

Or do you have room for a lodger?

Wednesday wrote:

My income and expenditure is as follows:

Monthly salary - £977

Expenditure - 11.49 Contents Ins.
25.00 Factors
10.99 TV License
13.10 CILIP -do you have dependants? If not, then do you need life insurance? Does your employer give you a death in service benefit already?

2.00 Oxfam
25.00 Toucan
75.31 Smile Loan
50.00 Egg Card
255.71 Mortgage
8.76 Pinnacle
201.00 Co-op VISA
78.00 Council Tax are you claiming single person discount? 26.50 Travel Pass
43.00 Gas/Elec.
10.00 ISA not sure you can afford to save at the moment! 5.99 Amazon DVD luxury item.. could go?

Total 922.77


My main concern right now is to figure out how to make the money I'm paying out each month on credit debts reduce the balances in the fastest way possible. I have tried to apply for a low rate LOB card, but was refused (it was the Capital One 'No hassle' card).


O/S Balance Term Repayment
(months)
1800.00 50.00 Egg card (15.9%)
10,000.00 201.00 Co-Op (16.9%)
6505.60 84 (80) 81.32 N. Rock (5.6%)
3448.40 72 (62) 75.31 Smile (9.9%)



In addition to the above, I owe my mother 2160.88, and I have outstanding student loans of around 2500.00.

The total balance of my credit debts is starting to keep me awake at night, and I am only too aware that the interest rates on my credit cards are shocking.

LookingAhead

Hi there Wednesday and welcome!

My immediate thoughts were:

This person needs to do a grocery challenge/store cupboard clear out to eat healthily - and more importantly...cheaply. What sort of things do you buy/eat now?

The old style board is a fantastic help for getting your grocery bill right down.

MortgageMamma

Hi There

I would definately be looking to rent out a room, easy money. ou could also look at taking ona part time job in your spare time for a while to reduce the debt even more. A remortgage is also an option, you could lump your debts together and, so long as you dont have defaults and ccjs perhaps extend the term of your mortgage and take a 125% mortgage, I would advise you to steer clear of debt management plans as they can do as much damage as good, particularly to your credit rating. You will get a lot of support and ideas on this board but my advise to you would be to consult a professional.

Sea78

Hi,

You can still have the DVD rentals - just use https://www.quidco.com as a means of getting the free trials, get paid for it too! Just remember to cancel them before the trial runs out

What is factors? Sorry if being a bit thick!

You will get lots of help here - welcome!

I would think you need to get an extra job to raise the extra income you need too...

Sea xx

beanielou

Only trhink or a remorgage if you would not run up additional debts
Can u increase your income in the short term?
Welcome to DFW@s by the way!
lou

CLAPTON

you can't afford essential kitchen works, you can't afford the luxory of £2000 saving...you have borrowed £2k at high interest rates to save at low rates..makes no sense.

you can't afford to save £10 per month either

i dont understand 'factors / CILIP / Pinnacle ' what are they?

presumably toucan is broadband...you can get loads of broadband for £15 or less.

you are borrowing to pay £2 to oxfam

you can't afford £5.99 for DVDs either

you need to increase your income, overtime/part time work anything to bring in more income

jet77

Hi Wednesday,

Have you thought about asking for a pay rise? I know it's cheeky but if you put together a good enough argument outlining the progress you've made since the last time you had one then it may save having to do extra work.

I wd def get rid of Oxfam and DVD's. I don't know what anyone else thinks about this, but it might be worth contacting any companies you owe money to (if you contact the Credit Consumer Counselling Service they send you out a pack with letters in that you can complete and photocopy so you don't have to copy them out). You can offer them a token payment and request that they stop the interest on your account. The token payment that you offer each company that you owe money to must be worked out according to a formula that they will provide you with - I won't put what I think it is incase I'm wrong. When working out the token payment it is important that you include every single last debt that you have and keep a record of how you worked each one out. This is so that if any creditor took you to court and it was found that you had not worked out each token payment the same, it would be seen as favouritism and you would be required to repay in full immediately.

I don't know if any of this is of any use - didn't mean to go on for so long!!

Good luck & Welcome!!!

Annie_Fanny

Hey Wednesday

The thing to do in this situation is get fired up! I know it is hard not to worry but the best thing to do is try and see this situation as challenge! Take it head on!

My advice:

I would ring the guys up below and try and get your interest rate lowered. They can only say no but at least you will be doing something and feel empowered!
1800.00 50.00 Egg card (15.9%)
10,000.00 201.00 Co-Op (16.9%)
6505.60 84 (80) 81.32 N. Rock (5.6%)
3448.40 72 (62) 75.31 Smile (9.9%)

I would put the kitchen renovations on hold and I'm sorry but I would put the £2k on the Co-Op debt. A bit radical I know but have you read Martin Lewis' article on this matter especially the topic of 'Are you ready to start saving?' - may help you make up your mind:
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1103213261,45760,

I would definately get a part time job. Hopefully this would bring in some extra £££ and may be you would make some new friends!

Also a few ways of getting some extra £££. Open a First Direct current account and as long as you fulfill their criteria they will give you £50. As soon as you get the £50 shut the account down! Harsh I know but needs must! I've done it! Also this may interest you. Alliance & Leicester give a £25 incentive fee for opening an account and also a 0% overdraft for a year.

Also it is worth checking out the snowball calculator as it will help you target the repayment of your debts efficiently:
http://www.whatsthecost.co.uk/snowball.aspx

Good luck - you can do this!

Annie

lynzpower

Ok my turn to have a look and see whats happening here!

My income and expenditure is as follows:

Monthly salary - £977

Expenditure - 11.49 Contents Ins.
25.00 Factors ( whats this??)
10.99 TV License
13.10 CILIP ( and this??)
2.00 Oxfam ( as others have said, dont bother with this. I found volunteering my time, or taking stuff to the charity shop is better, Ive taken about £300s worth of stock to the charioty shop over the last few weeks, makes me feel better :A) ( saving £2 - £24 a year)
25.00 Toucan ( again, if this is broadband, you can pretty much halve this, madasafish often stated 13.99 tesco value broadband is 13.97 with of course clubcard points! )
75.31 Smile Loan ( yes as others say,ask if the interest can be reduced
50.00 Egg Card ( as above)
255.71 Mortgage ( fine)
8.76 Pinnacle ( what is this?)
201.00 Co-op VISA ( is this the minimum payment?)
78.00 Council Tax ( fine, dont whatever you do stop paying this!) 1
26.50 Travel Pass ( ok)
43.00 Gas/Elec.( thats quite cheap, I take it youve done all the shopping around. Check out https://www.energysavingtrust.co.uk for more ideas as to what to do with this)
10.00 ISA ( yep, sorry, you cant afford this at the mo)
5.99 Amazon DVD ( cancel, and tart for a bit. We got 15 for doing a free trial with blockbuster, theres plenty you get paid for, once these are over with, you could move to tesco dvd rental - fairly sure its am amazon one anyway, but at least you;ll get CC points for it.)


Total 922.77

As Annie says, do look at snowballing, to ensure you are getting the highest interest down first. As you have the money in an ISA, you are earning less on that money than you are paying out, sop effdctively that Isa is more debt. Pay off your highest interest card with that, is my advice. Sadly, your kitcen might have to wait. Is is DANGEROUS? Or is it that it will look nice?

Are you actually paying off you S loans at the mo? Is that something that is likely to happen soon if not.

there are quite a few things also that you havnet accounted for. You havent got buildings insurance, which I tohught you had to have in order for the mortgage to be accpeted If the house burned to the floor tomorrow you would have nothing without decent buildings insurance. Look into it.

I do agree with others, extra income is what you need. Some of the things we do here to try to get extra money is
*Work a second job
*Mystery shopping
*Get a lodger
*take in foreign students on exchanges type schemes
*sell on ebay/ amazon/greenmetropolis/loot/ wherever.
*car boot sale

Are you menu planning, we are eating for 25 a week for 2, inc all cleaning, lunches at work etc. IT can be done!!

Good luck

MrsTinks

I think what others have said is definitely worth acting on... Savings for a kitchen is currently costing you 16.9%apr on £2000.... Look at it that way Get a copy of your credit report and find out what is going on. Your credit rating might be lower if you haven't registered on the electoral roll so get this checked and then see if you can find some better offers. Oddly I got a rubbish %apr from my long term bank (Lloyds) and a good one from their phone loan service and then a super one from Egg loans... So just because it's your bank doesn't mean they'll look after you better than others... Loan protection... if you have it then cancel it! Buy this independently through another company (you can have one policy to cover basically your whole monthly income in case you're made redundant etc for a fraction of the over priced policies that the loan companies offer).

OS your lifestyle pop over there and get some ideas on how to live cheaper and do things old style

I would seriously consider a second job, bar work would mean social life and probably free drinks too so worth considering Supermarket jobs could bring reduced cost groceries...

Best of luck