My Lightbulb Moment

bongo1

After a few months surfing this site I have finally taken my head out of the sand and sort my financial mess that I have got myself into with my reckless spending. I would like a bit of advice from you guys regarding money saving and which debt to tackle first. Please be gentle


Monthly Incomings:1429.29

My salary – as above

Mortgage/Rent – 408.29
Council Tax – 83.43
Phone - £35.00
Internet – 17.99
Credit card 1 – 233.34
Credit card 2 – 94.14
Car Insurance - £40.68
Insurance £84.27
Total: 1006.64

This leaves me with 422.65 to live on and tackle my debt which as you can see are my credit cards. I was thinking of paying my larger card first as to drive down the minimium payment allowing me to pay more each month on to it.

Wonder_Girl

You have taken a HUGE step, well done, do you not pay any other bills though? Gas, Elec, Water? Buy food? have any travel costs? etc

Littlemiss-lotsofdebt

bongo1 wrote:

Monthly Incomings:1429.29

My salary – as above

Mortgage/Rent – 408.29
Council Tax – 83.43
Phone - £35.00
Internet – 17.99
Credit card 1 – 233.34
Credit card 2 – 103.64
Car Insurance - £40.68
Insurance £84.27
Total: 1006.64

Welcome Bongo!

As Wondergirl stated, you also need to include other bills such as food, contact lenses, mobile bills - absolutely anything like this.

At first glance, your phone bill, internet and car insurance look high. You may be able to find cheaper deals at https://www.uswitch.com and https://www.confused.com for car insurance.

KatrinaC_2

bongo1 wrote:

This leaves me with 422.65 to live on and tackle my debt which as you can see are my credit cards. I was thinking of paying my larger card first as to drive down the minimium payment allowing me to pay more each month on to it.

Welcome to Debt Free Wannabe!

The big areas where savings can normally be made are the bits you haven't included in your SOA - things like food, entertainment, electricity, gas etc. If you aren't sure where your money goes, try keeping a spending diary for a few weeks and list everything in it, down to the last mars bar. That way you can see where you can cut back. Also, take a look at the "Money Saving Old Style" board for ways in which to cut back your housekeeping and food bills.

The amounts you included for your credit cards are presumably minimum payments so anything additional that you pay will presumably be going to wipe out the debts. The way to tackle multiple debts is to clear the cards which have the highest APRs not the highest balances - if you have £10,000 on an interest free card and £100 on a card with an APR of 30% you will pay more interest on the lower card even though it seems like the high balance card is costing more. If there is no difference it might be worth paying off the lower balance first though - that way you get the moral boost of having cleared a debt! If you don't know the APRs it might be worth calling the card companies to find out exactly what they are charging you.

You might also want to see whether you can get a balance transfer card where you wither get 0%APR for a fixed period or a low APR (normally 6-7%) for the life of the balance. That way more of what you pay each month goes to the debt rather than the interest.

Kat

CLAPTON

you need to identify ALL your spending....for monthly spending it may be best to keep a spending diary where you write down absolutely everything you spend...so how much for haircuts, lunches and snacks at work, petrol and travel costs, food, going out etc.

also think about all the quarterly or annual or one offs....gas/electricty, BT (divide quarterly figures by 3 to get a monthly equivalent); you have car insurance but what about car tax, MOT, car servicing, RAC/AA, any holiday costs, present, xmas, do you pay water rates,clothes etc (divided these yearly costs by 112 to get the monthly equivalent.

as far a paying off the debts the quickest way to clear debt is to pay the minimum of your debts except for the one with the highest APR...that one pay as much as possible

can you edit your post to include the actual debt and the APRs

SOA

what is insurance 84? for
is phone a landline or a mobile?

can you increase your income ...part time job, selling stuff on ebay?

bongo1

Thanks for the replys, I should have been a little clearer in my post. My credit APRS are 14.9% and 0%. These are the only household bills that I pay my girlfriend pays the other household bills. My Insurance payment of 83.27 is for building contents insurance etc, and the phone is my mobile. I do run a car I drive to work which is very lazy of me as it only takes me 2 mins to get to work.With the job situation I’m now on shift work which gives me and extra 16.5% in my wages and there is plenty of overtime available….I get paid on the 25th of each month so I will keep a diary as soon as I get paid. I seem to draw money willy nilly from the hole in the wall over the month, last month I drew out 180.00 over the course of the month and have never anything to show for it.Hopefully the diary should stop this…….

Thanks again for all your help
Kev

lynzpower

hi there

COuld you get rid of the car? Sell it and chear debts? You dont say how much it costs to run what with the tax/mot/petrol/ parking it must be a fair amount. 40 for the insurance would be some saving too.

Could you call your mobile supplier and ask them to reduce your tarriff? I bet theres a cheaper one you can switch to

you can save couple of quid on internet, theres some from £14 eg tesco value ( plus you get cc points )

If that is buildings & contents, you might want to check you are on the cheapest tarriff and swap if you can. I pay about half that with CIS.

If you are going to switch providers, use https://www.quidco.co.uk to get some cash back there are lots of insurance cos etc that give cash back on there, sometimes up to 40 quid. Do have a nose

HTH
Lynz
x

tawnyowls

Not sure if you meant buildings and contents insurance - either way, it's very high - £84.27 adds up to over a grand a year; I pay about £250 for 75K of contents cover (don't think I have that much, but it came as standard;)) and about £300 for buildings, and I know our buildings insurance isn't the cheapest.

Internet you could save a few quid on - £14.99 is the standard charge for most ISPs, and there are a lot doing it for less that that; check your ISP's website and see if there's a cheaper package available, and if not, ring them up, threaten to leave and see what they'll do for you.

The CCs are a no-brainer; shift everything you can onto the 0% interest one and pay off the other one. How much is the actual debt outstanding on these? As you've only got the 2 credit cards, you as Kat said, you should think about applying for another 0% interest one or even a lower interest on to shift the rest of the debt. When you do that, don't be tempted to settle for the lower payment - pay off as much as you can as fast as you can.
Car: well, you've answered that one, haven't you? Get your walking shoes out! Does your gf have a car? As you live so near work, do you even need a car?

(Post crossed with Lynz's - so basically, we both agree on what you should do - blimey, I thought I was starting early)

lynzpower

Ive been here since half 6. Tawnyowls you will too when you start being a maniac!!

Thriftylady

bongo1 wrote:

I seem to draw money willy nilly from the hole in the wall over the month, last month I drew out 180.00 over the course of the month and have never anything to show for it.
Kev

hi !

I used to do this too, and it really depressed me to fritter away so much money with nothing to show for it. I don't know if this would work for you (each to their own and all that) but I started to take £100 cash out on payday and just making it last until the next payday. I've been doing this for the past few months and I've definitely noticed that I haven't spent nearly as much. Even though I know there is still money in my bank account, somehow I have always managed to convince myself that whats in my purse is all I have, and so far I've stuck to it.

Good luck

tawnyowls

lynzpower wrote:

Ive been here since half 6. Tawnyowls you will too when you start being a maniac!!

Don't even go there! I'm already having to put strict time limits on visiting this board, otherwise I'll end up posting an SOA because I won't be doing any work!