Drained!

Blue_Peter_2

Hi all,

I've been looking in here for ages aware that things are getting out of control for me and that I should take the reins and do something... and then simply glossing over how bad things are and trying to forget it.

I've been in debt since leaving university 8 years ago and the debt has gradually increased - partly (mainly) because of some bad decisions on my part but also because I've never earnt much, I live in an expensive city and, well, I'm terrible at handling money!

A few days ago, I added it all up and had the shock of my life - I am in far more debt than I had realised and I can only see it increasing. I feel sick, I can't think of anything else and it's affecting my relationships with my partner and my friends. I know I want/need to get a handle on things but I don't know how to make a real difference.

This is my situation:

Student loan outstanding = £6.4k (3.2%APR) (Paying £117 pcm until 04/11))
Nationwide loan outstanding = £4.7k (6.7%APR) (Paying £80 pcm until 08/11)
Amex card = £4.3k (4.9%APR - for life of balance) (Paying min - c.£130 pcm)
Lloyds credit card = £700 (15.9%APR) (Paying c.£20 pcm)
Overdraft = 1.5k (17.9%APR) (Currently not making repayments on this)

I had foolishly deferred my student loan repayments until earlier this year - now I have to start paying it back because I have passed the deferment threshold but these repayments have just tipped me over the edge and I am really struggling to get through each month with what I have.

I am earning far more than I ever have before (I take home £1.4k pcm) but my living expenses are far more than ever - when all my payments have been made I am left with about £300.

Perhaps also worth noting, I have no pension, no savings, no mortgage, no insurances, no 'secured' loans and have never defaulted on any payments (so far as I recall).

One of the worst things for me is the peer pressure - all of my friends seem to earn well and live well and I find myself trying to keep up even though I know what it is doing to me. I know there are things I can do to get to grips with this but I just don't know what to do for the best. I also know that there are people worse off than me and that my situation is far from unique (I don't want to seem too self-centered!!).

I am quite literally spent - what is the best first move???

domestic_goddess

Hiya there

what you need to do really is post your SOA so everyone can have a look and help from there.

Well done for taking the first step

Avogirly

Hello and welcome to MSE! The first thing is your SOA (statement of affairs). All incomings and outgoings. Then we can go from there. Don't worry, stick around, advice will be soon to follow!

homersimpson_3

you needed to post a full statement of affairs - incoming and outgoings. if you can reduce outgoings you can target excess money towards debt. what are minimum payment on cards. target debts with highest apr first and work your way down list. overdrafts are also payble on demand.

Perhaps also worth noting, I have no pension, no savings, no mortgage, no insurances, no 'secured' loans and have never defaulted on any payments (so far as I recall).

if you are renting a flat having no insurance is silly- what would happen if it got broken into and all contents stolen. so is having no pension- what will you live on when you retire? does co have pension scheme? the earlier you start the better.

One of the worst things for me is the peer pressure - all of my friends seem to earn well and live well and I find myself trying to keep up even though I know what it is doing to me.

you're lucky compared to alot of people on forum - you earn susbtantially more than most (including me). you can have an active life without spending a fortune- getting out of debt and staying out of debt involves taking responsibility. why are trying to keep up?

moongarden

hiya blue peter
congratulations on having your lightbulb moment!

i think i should correct you when you say you are terrible at handling money - you should rephrase that to i used to be terrible with money!

StefanPaetow

BluePeter, the first thing is to STOP bowing to peer pressure... If your mates don't understand, then sod 'em.

Like others pointed out, start with a Statement of Affairs.

Then see what you can and cannot live without. If you have a PC at home, find yourself a free spreadsheet program online (if you don't have MS Office or something equivalent), and then write yourself a budget in it. Then, every day you spend money, you enter what you spent into your budget, and believe me, that's one of the fastest ways to see over a month or two where your money goes. Aim to reduce your spending to below budget, and then use the extra cash to pay off the high-interest stuff first (overdraft and LTSB Card).

That's a good start for starters.

Stefan

oOMiaOo

Welcome Blue Peter

I really understand where you're coming from, but take heart! You're in the right place. Echoing the others - get your SOA down, and you'll start getting some practical advice from the expert money savers on here.

With you on the peer pressure - a lot of my friends earn a lot more than me now I'm in the not for profit sector. It has really helped me to tell my friends that I'm determined to pay my debts off and so am going to be skint for a while (I haven't told anyone how much I owe, so don't worry about having to do that). Any friend worth having is going to try to help you on this eg by not putting you in the position where you have to spend lots of money. Pretty much everyone's been skint at some point, so they all know what it's like.

However, you've got to also take responsibility for your own actions! If you offer to buy everyone in the bar a drink, they're not going to say no!

Well done for recognising the problem and doing something about it :T

Good luck!

Blue_Peter_2

Wow - thanks - wasn't expecting such an immediate response!!

I will put the SOA together and be back later or in the morning to see what you think.

One thing about the peer pressure - I think it was the wrong term as the pressure is something I put on myself. I live in London and as you probably know, the simplest things can add up and cost a fortune!

Anyway, I'll be back...

Former_MSE_Forum_Manager

Well done Blue Peter.

The first step, as they say, is facing the problem

The folks on this board are incredibly helpful and im certain we can get you attacking those debts and getting control again.

xela_17

RE: the overdraft. This must be costing you loads of money at 17.5% interest. If you have a good credit rating, try and get a 0% card like egg, which you could transfer your overdraft to. The money you would then save on interest you could pay off the balance faster.

Also, since people don't make regular repayments to overdrafts it is easy to forget them; having the debt on a credit card you would automatically try harder to pay it off.

Well done for facing your debts.

highguyuk

:hello: and well done for your lightbulb moment!

Get your SOA posted up for us all to help.