Accurate SOA - My first effort was weak!! Help Apprciated

abc123_3

Hello,

I posted this earlier today, a few people pointed out a few problem with my SOA - thanks for that.

I have had another effort and am confident that this is pretty accurate. Again help desperately needed - and appreciated:

I have had a look at the various options and really don’t want to face bankruptcy. As I understand it the other option is an IVA but that isn’t so appealing either. My main problem is I have tried to sort myself out countless times, it seems to work for a few weeks then I completely disregard the problem – my fault I know. This will not happen now I have realised just how bad it is – a big wake up call.

What are my options??

After looking over the past postings I’m hoping you guys can come up with some suggestions for me. Here is my situation:

Debts:

Egg Loan: £5962 remaining (paying £160.98 a month – ends 27 Jan 2010)
Egg Credit Card: £3572.30 (0% for 6 months then 15.9% APR variable))
Egg Money Account: £3519.90 (14.9% APR variable)
HSBC Gold Card: £3800 (15.9% APR variable
Morgan Stanley Credit Card £1400 (5.9%APR)
Bank Account Overdraft: £2000

Income:

Salary of £26,000 – this is paid on a 4 weekly basis. I take home 13 instalments of £1496.16 over the year.

Ebay buying/selling: Approx £100 (this is a very approximate figure and really unreliable though)

Note: The 13 weekly payments doesn’t help with budgeting in any way!! Hopefully Ill be moving to a new job in the next month or so which may rectify this. Maybe the salary will be slightly better but the difference will be small.

Monthly outgoings:

Rent: £535 – I realise this is expensive but I’m locked into a contract until April 2007
Council Tax: £55
Food: £70
Elec/Gas Bills: £40
Mobile Phone: £30
Travel: £70 (I’m considering buying a bike and cycling everywhere which is realistically possible).
Socialising: £100 (I know that this can realistically be £0 and is the first thing that needs to disappear)
Internet: £5
Television Licence:£5
Other costs: £70 (including general expenditure – haircuts, toiletries, one off travel etc)

Outgoings on debts:

£160 on HSBC Loan
£70 on Egg CC 1
£70 on Egg CC 2
£70 on HSBC CC
£30 on Morgan Stanley CC

I know the obvious steps first point of call is lower APRs on credit cards but I typically get offered limits of £1000 or something. Then money ends up all over the place – loads of payment dates and it gets really messy. I don’t want to end up missing payments and feel its almost better to keep it in one place and prevent this?

ANY help would be massively appreciated – even if its bad news. I just want to get on the road to recovering this situation as best I can.

Thanks in advance!

black-saturn

If your used to spending £100 on socialising you could try knocking it back to £20 instead of £0. Everyone deserves a night out now and again.

all_hours

That works out

Outgoings 980
Debts 374
Total 1354

Income 1496.16 every 4 weeks = 1620.84 per month.

This should leave you with an average monthly surplus of 266.84

Keep a spending diary for a week or two to find out where the extra £200 is going.

Phone Morgan Stanley and ask if they will increase your credit limit so you can do a balance transfer - they can only say no.

linniestorm

I know the socialising has already been mentioned, and it's a fairly obvious one you've already noted for yourself.

About food, have you thought about joining the grocery challenge or using the tips/vouchers elsewhere on the site to bring that down any more than you have at present?

And are you a big mobile phone user? I say this cause I'm not really, and was paying out £30 a month and never using up free minutes etc. Which I realised (in the end) was a bit silly, so swapped my provider and I'm now on a £19 a month contract with O2 that gives me adequate texts and minutes and saves me over a tenner a month! Something to have a look at perhaps?

abc123_3

No joy with MS - already had a go.

Point taken re the surplus but the problem with getting paid every four weeks is that it effectively leaves me with that as my monthly budget.

Once a year I can definately hit the debt with a larger lump sum payment as a result but from a budgeting perspective it makes it very hard to work on a monthly basis on anything other that the 4 weekly payment...

all_hours

If you take 4 weeks income as a monthly income that should still leave a surplus.

1496.16 - 1354 = £142

So you could make your monthly payments out of each 4 weeks income and pay the extra £142 off the card with the highest interest. Then once a year pay the extra £1496 off the same card.

£142 * 12 = £1705.92 + £1496.16 = £3202.08 to pay off the HSBC gold card.

What's the interest on your overdraft?

spud30

all_hours wrote:

If you take 4 weeks income as a monthly income that should still leave a surplus.

Plus, once a year, you will get paid twice in the same month, a bit like a bonus :j

justruth

you have not included interest on the overdraft in your outgoings, with a £2000 D balance I would assume that to be substantial and I am not just thinking about the APR, it is all too easy to forget that it comes out every month. Have you paid bank charges, if so claim them back!

You can shave pleanty off your budget if you spend £5 less on your utilities (turn everything off at the plug at night/ when not in use, energy saving light bulbs etc) £5 off your mobile phone, however youpay it, £50 off your travel if you do invest in the bike, or for the short term, walk while you save for it and £70 off your social budget, you do need a life, just drink cheap! You will be suprised how easy it is to live off £50 for food in a month. Altogether you could save £150 without really feeling the pinch.

£20,254.20 is a big burden on you, but it is achievable, the answers are here.

abc123_3

OD interest rate is 15.9% - thats actually a shock! Hadnt included it al all....things get worse it seems.

Travel advice noted. Im going to start walking to work - despite it being quite a way.

I guess the major problem arises wiht unforseen costs that crop up - having to travel somewhere instantly writes off any spare cash to hit the debt with. It really looks like I need to up my income.

Do people thing this is manageable by myself without measures such as IVAs etc?

abc123_3

Mobile is in a contract too so Im stuck with that too. Anything that I could cancel or cut out I have!

justruth

My advice then, would be to try and clear the overdraft first, without cancelling it. You don't have to get an IVA, but if you feel out of your depth, contact the CAB. It is achievable, and now that you have understood your problem you can tackle it. Just a thought, could you change banks? I know in Martins article the alliance and leicester offer 0% overdraft which you could transfer to. Again, claim back any charges, you never know, it could clear the overdraft.

Congratulations on starting down the raod to financial freedom!