Lou's Debt Diary

Louiseuk25

Please can I jump on The Debt Diary bandwagon too? Again, I would mainly like to use it as a way to monitor my spending habits and bring my debt free day closer.

I have already moved back in with my parents this year to cut down my expenditure drastically :j , but my downfall is the amount I allow myself to spend socialising in my new ‘young, free and single’ status :beer: . I am fortunate that one of my close friends is in a similar situation to me and is looking to make cut backs too, so hopefully this will help in my quest. My ultimate aim is to be in a position to comfortably rent my own place (or even buy if I get a major salary increase!).

My SOA is as follows:

Income
£1192.61 Full time job (includes a deduction of £74 for annual rail season ticket)

Expenditure
£200.00 Rent-includes food and bills
£23.86 Car Insurance
£19.00 Mobile phone contract
£10.00 Contact lenses
£180.00 Car loan (Egg, 7.9%, ends June 2009,)
£13.00 Interest on overdraft (HSBC, £1500)
£346.75 Egg Card repayments (£2847.90, 14.9%)

This leaves me a huge £400 a month to spend on going out, clothes, petrol (about £20 a month but have started walking to the train station to reduce this). What I am to do is to reduce this to as little as possible to throw at my credit card.

I know that I am perhaps a bit more fortunate than many of you to have this much spare money left over a month but it has been my erratic spending habbits of this left over cash (and more!) that has got me here and it needs to stop now!! I have made a tough move back to my parents as I would much rather have the independence, but I know this is only a short term measure and something that will be wort it in the long run.

Thanks for your support folks.

Lou

sparklymessygirl

Hi there Lou,

Good move to move back in with your parents but it must be quite hard to do that!

Here is my gentle comment With your balances on your credit card and the overdraft perhaps it isn't really a case of you having £400 spare per month - is that the figure you come to after the minimum payment on the CC? If so, maybe it is time to increase that minimum payment and try and gradually reduce your reliance on your overdraft. Even if you hand over a small amount extra to your parents with the rent for them to keep hold of it at least that would stop you spending it. Maybe you could decide that you only have £300 disposable income and then you could have that in cash and you can ONLY use cash? Maybe though that would be a bad move though as you might just blow it all in one go??

I am quite a bit older than you and I think it must be quite hard to reign yourself in in this day and age - you are doing so well to be addressing things early on :T

Hopefully someone will come along with tips on how to have great clothes and good entertainment without breaking the bank.

Sparkly

Louiseuk25

Thanks Sparkly,

You are absolutely right about increasing the cc payments and reducing reliance on my overdraft, although I am definitely overpaying on the cc at the moment (i think min is about £80!). I am managing to overpay because I have reduced my rent by £100 and no longer spend £100 a month on food. I have also quit my gym membership and reduced petrol costs from about £40p/m.

Being young (27 going on 18!) I do still want to have a bit of fun and have tried not to affect this by giving myself a decent budget but when I say it out loud, £100 a week is far too much!!!

I have already booked tickets for the Donnington Rally day and spent the afternoon at a folk festival seeing Nizlopi for free, but would like to know of some other cheaper ways to entertain.

I know I am well on my way to being debt free, but just want to throw every penny I can at it whilst still having a lil bit of fun, he he!

ETA-I have also got free tickets to Juhn Tucker Must Die courtesy of this site!

leni

Hi Louise, thats a good ammount to be paying off the credit card with that sort of balance but I'd definately look at getting another credit card which is 0% to transfer the balance to and then CLOSE the egg card!

I've recently got the Bank of Scotland NSPCC card with 0% for 9 month and no transfer fee! The payments your making means you'll pay your card off within 8 1/2 months so the 0% period willmean you can increase your monthly payments as you not be paying interest anymore!

You also haven't included in your SOA any petrol costs, I'm assuming as you have a car loan and insurance that your actually using the car?

Louiseuk25

I am a bit weary of applying for credit cards as have been rejected in the past (2 or 3 years ago now). I am tryng to keep my credit reference as clean as possible ready for when I do try to get my own place. I will give this consideration though, especially to the BOS one as I've definitely not applied with them before. Would I be able to tranfer my overdraft to it too?

I am spending about £20 a month on petrol at the mo which comes out of my personal budget. I have been seriously thinking of selling my car lately but dont think I would get back enough to pay off the loan and it would need to be replaced with a cheaper run-around so that I can get out and about. Although for the amount I use it, it could be cheaper to use public transport and taxis......Really not sure what to do on this one!!

I have actually used my payment break entitlement with EGG for 3 months so I will actually have 3*£180 to throw at the credit card from Sep to November. With the idea that once the credit card is clear I can significantly increase the loan repayments. Hope this was a good idea to do!

leni

I can't see why you would get turned down for a credit card currently, maybe your income was lower back then or you had too much credit available to you, they might just give you a lower credit limit then that you would of liked i.e. the previous 2 I'd applied for were only giving me £1k credit limited, so I closed all my cards that had a zero balance and the BOS card gave me a limit of £5400.

In regards to your card, I sold my 2ltr 4x4 for a smart car, which is costing me £160 a month rather than the £300+ a month the 4x4 was costing!

Louiseuk25

That's a good point actually-I have 3 credit cards at the moment with zero balances so will close those tomorrow. How should I wait for them to affect my credit rating before I applying for the BOS one?

Still a bit nervous about selling my car privately-I've only ever traded in cars at a garage, but doubt they'd give me a banger and cash (?!!) for my 04 plate micra. I have looked at the parkers guide and autotrader tho for a valuation of my car and there is £1k difference in the valuation for selling privately....I'd be able to settle the loan with the Parker's Guide rice but not autotraders!

leni

Louiseuk25 wrote:

That's a good point actually-I have 3 credit cards at the moment with zero balances so will close those tomorrow. How should I wait for them to affect my credit rating before I applying for the BOS one?

Still a bit nervous about selling my car privately-I've only ever traded in cars at a garage, but doubt they'd give me a banger and cash (?!!) for my 04 plate micra. I have looked at the parkers guide and autotrader tho for a valuation of my car and there is £1k difference in the valuation for selling privately....I'd be able to settle the loan with the Parker's Guide rice but not autotraders!

I exchanged my Honda CR-V for a smart car and got a cheque for £1400 - selling privately is a pain and for newer cars I'd definately look at trade in

Louiseuk25

Thanks again Leni, I will give a couple of garages a call tomorrow, am looking to trade a car worth £5500 in for a run around worth less than £1,000...will see what they say.

This week is going to be a tough week as I am off work on annual leave. Have managed not to spend a penny today mind you and am 5 chapters closer to becoming a qualified accountant!! A couple of big nights out tho at the end of the week and down to my last £45. Pay day is next Tuesday though and am looking forward to attacking August with my new DFW outlook!

Louiseuk25

I am making good progress today:
* Have not spent a penny today and do not intend to for the rest of the day.
* Have cancelled 2 credit cards which will reduce my available credit by £4,900.00. Abbey said this will take 4-6 weeks to affect my credit records and so will apply for a 0% interest card then to transfer my Egg Card and hopefully my HSBC overdraft to.
* Resisted the urge to pay out £70 for a better mobile phone upgrade and settle for one that they have availible for me for free.
* Listed 21 books on Amazon Marketplace to sell.
* Chased the £100 I am owed from Council Tax-I should have a cheque for this by the end of the week.

Plan for rest of week:
* I've still not come to a decision about my car but I will go for a drive around a few local garages tomorrow to at least see if they would trade my new car for an older one + cash.
* Sort out 'stuff' that I can't list on Amazon/Ebay for a car boot sale. I also have a selection of handmade cards to take along with me-depending on whether they sell or not, I might even make some more to sell at future car boot sales/craft fairs (have loads of materials to use!!!).
* List more books on Amazon.

ZTD

Louiseuk25 wrote:

* I've still not come to a decision about my car but I will go for a drive around a few local garages tomorrow to at least see if they would trade my new car for an older one + cash.

I know this seems obvious, but wash it and tidy it out before hawking it around the garages. It's amazing how many people fail to do this.