My story - any advice welcome

londongirl

Hi everyone,

Thought it was about time i joined this board properly as i think i need to - i havn't got the biggest amount of debt ever but i can see myself struggling to pay it off now whereas before i thought it wasn't a problem. So here's my story if anyone is interested!
I've been on these forums on and off for ages and have saved a lot of money as a result - thanks Martin! I was at uni for 4 years from age 18 and everyone was impressed with how well i handled my money - lived at home, paid for some food at home but not rent, worked part-time all throughout uni and also had two 8 month work placements which were paid (not very well but still paid) i basically came out of uni with no debt, my student loan in an isa (used some but still had about £2k of it in there). Was unemployed for 3 months after uni but still living at home, got JSA and started entering loads of competitions and won enough money and other stuff in that 3 months (including a holiday and £500) to keep me going nicely.
Worked for the next 3 years in two different jobs neither particularly well paid but living at home paying rent but managing nicely and getting savings together. Went back to uni to do a masters in 2003 and become a speech therapist - had saved £7k to assist me in this and also got my fees paid and an NHS bursary of £4k a year. Moved out of home and rented with a friend from the course, still managing fine, though on very strict budget.

Then finished uni at end of september, got a job as a speech therapist starting in november and flatmate and i decided to go to australia for 5 weeks as it was our last chance to go travelling really before starting work and neither of us had done a biggish trip before. Spent £2300 on it - and tried to do it as cheap as poss, used the remainder of my savings on it but wasn't worried as was starting work as soon as we got back. Still don't regret this either as was the most fantastic time ever.

Somehow though had forgotten had to pay rent and council tax and everything else while we were away so actually ended up paying that with my savings and so put some of the holiday about £600 on credit card - 0%. Then to cut a long story short, i suppose i got a bit happy at having money for first time in 2 years so bought some new work clothes, went out a few times to celebrate, bought some things for the flat -only cheap but still added up. All went on 0% card but now owed about £1400.
Also still had an overdraft from uni of £2k and my student loan from first time.
Then my job didn't work out at all, and it was making me ill with the stress of it so i left, nothing else to go to but i felt i was going to have a nervous breakdown and my parents and friends were telling me to quit as they couldn't bear what it was doing to me so i left in march after 5 months. Tried to get temping and only got a day here and there for 6 weeks. Borrowed money from parents. Used more overdraft. Didn't sign on or get HB as was convinced more temp work would be just around the corner. Finally got a temping job at end of april and have now been made permanent so thats fine now but suddenly i decided to add up my debts as for a while i didn't seem to be making any leaway into paying them off and now my situation is as follows:

Income £18898 PA - havn't had first paycheck yet think it will be about £1190 take home pay.

Owe: £1002 overdraft to halifax
£890 interest free credit card
£3760 to bank of mum and dad
£2900 student loans company (deferred until next may)
Total = £8552

At this point in time i have £300 in my current account and my rent is due to come out the day after i get paid this month so hopefully that should cover it. Prob is i only get 3 weeks pay this month as i had a week off unpaid as temping contract ended and before i started permanently, i also have both gas and electricity quarterly bills due and my car insurance is up for renewal next month.

Basically i cant see how i can pay this off - well eventually i will be able to i know but i want to do it asap as want to buy a house with my boyfriend in about 18 months and want to be totally debt free by then and hopefully have saved a small deposit.

My income and outgoings as far as i can work out are per month:

Income £1190

Outgoings:
Rent: £400
Travel to work: £140
Council tax : £63
internet: £7.50
Food: £100
Telephone: £7
Mobile: £22.75
gas bill: £24
electricity: £17
Petrol: £25
Car insurance: £34.25
car tax: £13
tv license: £5.50
contents insurance: £3.80
salsa lessons £28
prescriptions: £6
contact lenses £13

total: £909

= £281 to spare.

Sounds ok - except there are the things that aren't just monthly expenses that i end up buying or putting on credit card - friends wedding last month, another friends wedding in 3 weeks (present, petrol down there, boyfriend bought me a dress as i diddn't own anything at all suitable for a wedding so thats ok), then things like car MOT, new windscreen wipers last week - £16. Thats before i even buy anything like a pair of new shoes (have something wrong with my feet that means i wear a hole in a pair of shoes at the side after about 6 weeks - not that i buy a new pair every six weeks but i do end up buying a few, usually only cheap £20 trainers from Next or summer shoes for £14 from there. At least in the summer i wear flip flops if i can so i don't wear a hole in them cos they have no sides! I do wear them down quickly though because of the way i walk.

Anyway, i was on a very similar wage to what i'm on now 6 months ago and didnt really have much left over at the end of the month and i only had £12 petrol to get to work each week but now its £35 on the train into london so i'm going to be worse off.

Basically, any tips for anything i'm not doing.
I need to try and pay off the overdraft first as the interest free part of it comes to an end in september.
Then 0% card runs out in december. Then really need to pay back parents (the reason i owe them this much money is i smashed up my old 14 year old car and it was a write off - i needed a car for work as there was no public transport at all to where i was going and i needed to drive it during the day occasionally for work, so bought a 3 year old car with some of my savings and a loan from mum and dad. I think they thought i would pay it back quite quickly once i was working though and now i don't know how long it will take.

The last thing is i'm now 28 and have only paid into a pension for 2 years of my working life and that pension is now frozen and hasn't got a lot in it. I can join a pensin scheme at this job but not for 3 months - but after that i really think i should as i am very worried i'm getting older and havn't started one properly yet. If i do it will be anything from £90 to £157 a month i can put in and employer will match it - should i do it or should i clear my debts first then pay in, should i try and pay in the maximum so my employer will match it?

Sorry this whole thing has been so long, thanks if anyone has bothered to read it all.

Any advice welcome.

lynzpower

Hello there lovey

Well thanks for finding us

first things first, have you cut your card up?

Sorry if Ive missed this, but do you still have the car? If you do, Id sell it - your travelcard will cover all the tansport you need in london, and getting rid of the car will save you loads of money per month.

I dont have a pension either, to be honest, Im not worrying about it till the debts are gone.

Other tip- what have you got to sell? A fiver here and there makes a massive difference, ebay, car boot sales, amazon? Flog whatever you dont need- textbooks go for good money too

I might as well get in first and say the Salsa lessons arnt a need they are a want, and you could live without them Saying that check out your local college, mine does courses for £17 for 10 2 hour sessions. Much cheaper way to learn after all
Big welcome to DFW!

domestic_goddess

Congratulations on you rjob being made permanent.....

I am still quite new on here myself but there are lots of people who will be on here soon to give you some good advice.

Have you heard of quidco? The first thing I always think of when people post their SOA is changing suppliers for gas/electricity/car insurance/mobile/home phone. On quidco you can change suppliers to companies who will prob be cheaper for you and get cashback for doing so.

My car insurance was up for renewal this month. I looked on quidco for cash back companies and found prudential. The quote was loads cheaper than i now pay and i will get £100 cash back for switching through quidco... I alwats use my cashback to throw at my debts.

londongirl

Thanks for replying both of you.
Ok the salsa lessons aren't a need but they are my one night out a week - its a lesson with a club to freedance afterwards rather than just a lesson to learn it. I've been doing it on and off for 3 years and for the £7 you get two one hour lessons and the dancefloor and music to dance afterwards. Used to be £4 when i was a student. I suppose in reality i dont actually go 4 times a month so maybe if i restrict myself to once a fortnight anyway that will be better. Having said that maybe i'll stop altogether for the summer while its so damn hot anyway and too hot to dance!

I realise i'm in debt but having been a student for a total of 6 years (all my own choice i know) i really want to have a bit of fun too rather than just sitting in every night. Boyfriend and i generally sit in and watch telly or i sit in and watch telly with my flatmate. If we do go out for a meal or anything my boyfriend usually pays - or i'll treat him to pizza from pizza hut at lunchtime with my leisure vouchers gained from pigsback!

I do use quidco - got £56 from them in total for various things - including one gambling one which i don't think i'd do again as you have to pay for your bet then wait ages to get the money back.
Definately will look for car insurance though - hadn't thought of quidco for that -thanks.

Electricity and gas - we've been talking about switching for ages but our contract is up on the flat in october and i don't know whether its worth doing just yet as boyfriend and i might move in together. (this would save me £100 a month but i dont want to move in with him before i'm ready just for saving money- only been together 8 months). I had heard they take ages to switch sometimes - also i think we might have to get our landladies permission?

Phoned up broadband last month though after reading the forums and got changed to £14.99 a month instead of £17.99. Plus changed to a contract phone for mobile for £22.75 a month when my bills prior to that on PAYG were anything from £20 to £35


Selling my car just isn't an option i want to consider i'm afraid - and i know my parents woudln't want me to either. I live on the outskirts of london on the border of herts and its not that easy to get everywhere i need to wihtout a car. It was so hard when i wrote my car off and did without a car for 2 months. It depressed me so much waiting 20 minutes for a bus that then took 45 minutes wherease the journey would have taken about 15 in the car. Plus having to get my flatmate to take me to tesco all the time wasn't very convenient either as the only supermarket within walking distance is waitrose - so not very money saving if i did my supermarket shopping there. Also the £35 a week for my travel is a return journey on an oyster card - the cheapest option - to get a travel card to use it at other times too would be £42 a week i think. I am considering another route now that means walking an extra mile and taking an extra half an hour each way but will be £27 a week instead. Still the excersise will do me good!

I'm worried my car insurance will go up as i had another prang last year so lost my no claims bonus (it rolled into a wall backwards as i can't have put the handbrake no hard enough :-( ) but now i no longer use the car for work it might even it out as i only need social use cover not social and commuting.

I do stick things on ebay - i've sold quite a few photos of G4 concerts i've been to and its made me about £180 in the last year. But no one wants them anymore as the concerts were a while ago. I will start putting more things on ebay - i used to do it loads but at the moment feel like i never have time, leave for work at 7.30 and sometimes don't get back til nearly 7pm after cooking and eating dinner, tidying up and doing some chores its always nearly 9pm then all i want to do is flop down in front of the telly! Will try and get organised and put some more things on ebay though. The reason i like selling the photos is once it was listed i could just relist when they were sold without having to take time over writing another listing!!

I'm sick today so off work - another annoyance as don't get sick pay for the first 3 months - dragged myself in yesterday but felt pretty ill, so took today off and now just keep thinking thats about £60 lost.

londongirl

I'm so sorry i keep being so wordy! I didn't realise i'd written so much the second time!

Also i think maybe i won't do a pension until i've paid off my debts - but what are anyone elses thoughts? Is this a good idea?

happyformonths

Hi,

I've struggled over the pension question myself (am now 30, have been in debt since I was 18, put some money into a stakeholder pension from ages 25-28 and have now stopped).

Pension contributions are great when you're employed because your employer tends to match it ("free money") and the amount that you put in gets the income tax you paid on it put back on (terrible way of phrasing it but I hope you know what I mean!). AND all we ever read is "start early! put money in a pension in your 20s or else!". So it's very hard not to want to.

I honestly don't know what the "right" decision is there, but for me, I had to decide to suspend my contributions for a while, because my debt was bothering me more, and because I reckoned there was every chance I'd pay more interest on £100-worth of debt than I would earn on that much in my pension fund. This may of course turn out not to be the case, if my fund does really well. But no-one knows what's going to happen in the next 40 years and to be honest, I'd become pretty down on pensions since all the scandals of mis-management.

So I now have a little pot of about £6,000 which means I have theoretically some sort of asset - which is a comfort! This figure will apparently give me a pension of about £12 a year by the time I retire... but there's not a right lot I can do about it just now. So I comfort myself by saying I'm glad I put that money in when I did, and that I'll get going on it again when I am debt-free.

I guess what it boils down to is: there's a chance your pension might be worth £0 by the time you retire - but there's no chance your debt will dwindle *unless* you concentrate on paying it off.

Just my thoughts.

HFM

londongirl

Thanks - i think i'll see how i manage over the next 3 months and how much i manage to save to pay off debts, then consider again whether i can afford to pay in minimum to pension after that or not. The other thing i think though is if i pay it in to pension then i can't touch it so no chance of me saving up and then spending it instead of putting it towards debt or putting into pension at later date!

Old_No.7

You seem to be doing really well, but I think the key is in the car ownership. They are expensive, with unexpected costs always around the corner.

I'm not a car owner myself, moving out of London soon, and am desperately trying to avoid to automatically think that I'll need a car (and my BFs parents insist we'll need one, but I'm hoping to prove them wrong). I'd get groceries delivered: this is often free over a certain amount, or costs a fiver max and delivery times have improved a lot: evenings, Sat, short time slots, etc. It also helps for moneysaving in general as it'll make you plan your meals more carefully. For the other things, hire a car when you need it? That's what we're hoping to do.

Or if you can't do without (and I know how hard a habit it is to break!):

Could you sell this car, pay off most of the loan and get a very old model instead for say £500? Especially if you keep banging into things it might be worth it (sorry don't have a car so don't know much about them, but a 3-year-old model should still get you quite some nice money back, no?)

Other option is to car share (like you sort of suggest) with your flatmate who seems to own a car as well: if you are both on the insurance of 1 car, and share costs for it, surely you're both better off? I can't imagine that there'll be many times that you'd both need the car at the same time. My mum shares a car with a neighbour and it works a treat.

Once you're back on your feet, you can go back to full-time car ownership (although living in London, it'll be mostly parked outside your house, unfortunately, due to the long working hours here and travel time... bit of a waste, i'd say)

Good luck with it all!

londongirl

Hmm i'll think about the car but to be honest i love it to bits and i hadn't really thought about it much before about not using it so often as i've only been going to work on the train for a couple of months and only knew this job was permanent a 3 weeks ago. I don't think i can bear to give it up but i will have a think - problem with buying a £500 is when you bang into something you then get left with nothing if its a write off. Thats what happened to my old car - it was worth £1000 but insurance only gave me £500 and i lost £300 on the insurance for that car as i'd only taken it out a month previously and paid it all up front. Plus before i crashed it it was due to have about £400 of repairs as it was so old - battery kept failing, radiator leaking etc Also the other reason my parents were very keen to lend me the money for the car was saftey - they didn't like my travelling around on public transport late at night and also this car being newer has airbags etc given my track record! No honestly i'm a safe driver - drove for 8 years with not a single problem then unfortunately had two incididents a year apart from each other.
Flatmates car is falling apart and i don't think for one minute she would let me share it with her anyway so thats a no go!

I think if anything thinking about my car has spurred me on to try and think of ways to get money coming in as well as not spending it.

Tried a couple of the insurance places on quidco - sheila's wheels won't let me do it online as had more than one accident (so no quidco money) and prudential wanted £780!! I've looked again though and my insurance isn't due til september 16th so have a while to look around.

lynzpower

London girl, at the risk of sounding harsh, heres my feeling

You owe 8k. You are living in london but on a fairly relitavly low salary ( for now, though im sure it will creep up)

You want a mortgage soon

Many mortgage lenders ( moreso now than when I bought) will take your debt and multiply it by 3 and deduct this from what they would be willing to lend you. They are the lenders with the lowest interest rates. So if you have debt, then you will either be taken on at a no-particularly-good rate or taken on minus your debts.

Buying a house swallows money. I reckon just to get the keys youll be looking at around 3k. then theres the furniture, connections, any remedial work and so forth.

If you dont mind my saying so, it sounds as if you are making a few excuses here, you wont give up your car, you wont give up your salsa lessons, you cant e bothered to ebay really, ( who can!! ) etc. Hun, with the best will in the world, this cash isnt going to fall out of the sky, you need to create it by limiting your spending or selling whatever you can to get rid of this debt, otherwise you will trundle on forever, simply shuffling the cash about.

All the best
Lynz

kathfisch

Hi londongirl

Why not have a look at http://www.citycarclub.co.uk/default.htm , these schemes are very popular and can really save you money if your car is only used occasionally, as you keep saying it it! It is understandable that its hard to consider life without a car when you're used to it but a car club (I'm sure there are others) could provide one just for those times you need it. And it would make you think about when you really do need it - good for your purse and the environment!