My lightbulb moment and record for posterity (hopefully)

HappyMalus

Situation is thus

Income
£2425 net
£425 Girlfriends contributions (all bills except 1 in my name)
Total £2850

I earn twice as much as her and she has her own debt problems that on an earnings to debt ratio are worse than mine so have not got the heart to ask for it to be fairer.


Outgoings
Rent £900
Council Tax £99
Credit Cards £160 minimum
Loan £195
Mobile Bill £45
Commuting £300
Utility Bills £62
Food £125
Landline £25
Broadband £30

Total £1891


Debts
Overdraft
Total £500
Limit £1000
APR 17.9%

(This could be easily paid off but my credit cards have higher rate of interest so seems self defeating to not use this towards my cards currently.)

Loan
Intelligent Finance
Initial Amount £8000
Current Balance £4500
APR 10.9% (Flexible)

Credit Card 1
Citibank
Balance £3600
Limit £3750
APR 22.9%

Credit Card 2
Halifax
Balance £1500
Limit £1680
APR 12.9%

Credit Card 3
Barclaycard -
Balance £600 -
Limit £1000
APR 24.9% (Went from 17.9 to 24.9 last month even though I pay off £75 a month and havent had a late payment since January last year )

I also owe my girlfriend £1300 as she took some of my credit card debt onto a 9 month 0% card.

Total Debt
£11,400 - :eek: zomg it hurts just writing it.

So that's where I am, in my mind the punishing element is the interest payments on my credit cards, they are an unfortunate throwback to 2-3 years ago when I had extremely poor run of luck and missed several payments through unemployment or late pay, as I needed the credit to survive at the time I had to get cards and clearly with poor history the rates were less than stellar.

Since then I have been completely unable to get more affordable cards, I have obtained my credit report from equifax this morning and my last "slip" was April last year and my aggregated score according to them (I know it means nothing but is an indicator) was 407 so just in their 'good' category and yet I still cannot get anything cheaper.

I have ordered a full report from all 3 agencies to see if there is something Equifax have missed that is screwing me up but if its that serious surely it would be on my equifax report. My only supposition is that I have 3 cards near their limit. Their combined limit is not that high in relation to my earnings but that can be my only guess. I am also only 24 which I know has an effect (surely positive discrimination if I earn the money)

I've done all the snowballing calculations and know how to approach that angle but its not working out so well so I want to consolidate a little bit to help kick start the drop as my interest payments just from my credit cards are £125. I tried extending my loan with Intelligent finance but as they don't do the flexible product I have any more it had to be a new application, I did and it was refused.

What do people think and if they think consilidation will help then just how do I go about it as I cannot get accepted for anything.

How do I go about sorting this out

CLAPTON

your SoA says
income is 2850
spending (excluding debt repayments ) is 1481
which leaves £1,369 to service the debts
is that actually what you find each month? if yes then you can pay off your debts within a year ..
however if you dont find you have £1,369 left each month, then you urgently need to find out where your money is actually going.
start by keeping a spending diary and write down absolutely everything you buy...do you spend anything going out, buying lunches/coffees at work, takeaways ...everything: also think about all the yearly or one off costs...clothes, do you have a landline, takes holidays, buy DVDs, boy toys ...and add all these to your SoA to see where all that money is going.
when you've done that you will be able to prioritise your spending and will see how you can really start to repay those debts.

DontDoDebtKids

Hi Happy,

Welcome to the DFW club. I'd echo Clapton's advice and start a Spending Diary. I was also advised to do this, and much as I initially poo-poo'ed the idea, I forced myself to start one and it is a real eye opener...

Good luck! I'll be following your progress (as will others...)

DDDK

HappyMalus

You're right that I forgot the landline so have added on that and my ADSL, added it on.

I've started doing a spending diary to see where my money goes, something I meaned to do but never got round to but as far as I can work out its all non essential stuff, its money I spend currently not money I need to keep spending. I'm pretty good at denying myself stuff and that is what is actually making me more unhappy more than my debt, I don't have a coherent plan for my money so I just get really unhappy because I percieve myself as being broke. My budgeting has so farpaid off £2500 this year, would have been £4000 but needed new laptop.

MrsTinks

HappyMalus wrote:

My budgeting has so farpaid off £2500 this year, would have been £4000 but needed new laptop.

Sorry to nitpick but you NEEDED a new £1500 laptop? I bought an all singing all dancing top of the range Dell laptop for about £650 from Dell after haggling with them for 3 days to get the price I wanted
It was actually for OH as he genuinely DID need it - I personally want one but I want to save up for one once I am debt free
The main difference I guess is that you needed a laptop - but you wanted a £1500 one...
Let us know how you get on with your spending diary

Bigbubble

Hi HappyMalus

I think laying your cards on the table is a really positive step - there's so much helpful advice on this forum.

Just done it myself -feel physically sick - but it is a small step towards trying to achieve a debt free life.

Wishing you loads of luck

HappyMalus

Sorry to nitpick but you NEEDED a new £1500 laptop?

Basically yes. I was an IT contractor up until May of this year and my laptop was basically my livelyhood, Having a slow one has a serious impact on my ability to do work.

Wishing you loads of luck

Cheers, needing it.


Made a bit more progress, some of my utlities were in credit so I claimed that money back and just used it to pay off £120 more.

Also submitted my claim to barclays for bank charges from 4 years ago when I got made redundant and they stuck the knife in (where my debt all started). I'm looking at a £900 claim so that should make a big difference, fingers crossed, I'm just trying to look at it all in £500 blocks, every £500 I pay off is £14 a month interest saved atm.(bloody citicard) and I'm finding it less depressing when I'm just concentrating on paying off a block.

Now if only I could reduce these £160 a month interest charges.

kittykat100

Just being extremely nosey!

Erm where do you live as £900 rent I find to be quite high for two of you. Maybe you could move somewhere smaller? I don't think you are in a bad situation at all as you earn twice as much a year as you owe. However I know its all relative... Im just in scarey mode myself!!


Good luck, and you seem such a sweetie looking after your girlfriend.:A

Kittyx

HappyMalus

I live in Brighton, it is basically London prices down here and it would be an enormous drop in standard of accomadation to pay even £100 less a month. Balanced against my income I think its acceptable.

The problem to be honest is the travelling, £300 a month on commuting is horrific and something I hope to address by moving closer to work eventually but just now I have to suck it up

jobbingmusician

HappyMalus wrote:

I live in Brighton, it is basically London prices down here and it would be an enormous drop in standard of accomadation to pay even £100 less a month. Balanced against my income I think its acceptable.

The problem to be honest is the travelling, £300 a month on commuting is horrific and something I hope to address by moving closer to work eventually but just now I have to suck it up

Where do you commute to? How about a moped, if reasonably local??? (Or could you even cycle???????) :cool:

kittykat100

Do you train it? is there a possibility of car sharing?
I honestly think you are in a good position, and I think everyone deserves to live in the best place they can afford. My DP are in deep poo but we rent because of divorces and things, but I couldn't bare to pay £100 less a month for a horrible part of town. So I think you are well justified living somewhere nice, you earn your money and you should enjoy it

Kittyx