common sense seeks credit card debt savvy

jaydizzy

hi all, its been many moons since i've been on here and i need advice so will appreciate any guidance! (apart from the spend less part - believe me i'm doing that bit!) i need a structure plan to address my credit card/ overdraft debt

credit card debts;
virgin - £5800, no promotional rate and interest is approx 70-80/month
citi card - 2,800 5.8 life of balance for first part and 585 at 31% which is payable after the low rate is paid (i really messed up) but i have account suspended so they cant raise it to 39% as they intended to do in a few months
hsbc overdraft - £2300 at extortionate overdraft rate
barclay card - credit limit of 1350 - there is no debt on this card but they offered 6.9% life of balance today

i'm clearing approx £1200 / month wages and i have no idea where to start, all i know is that i want to get rid of these debts in the most methodical way but i lack the savvy to consider things in the long term and numbers plain confuse me,

so any guidance is much appreciated,

many many thanks in advance - i guess what i'm asking is, which debt do i tackle first and how much should i pay towards each to make a dent ?

gonzo127

well if my figures are accurate i believe the virgin card is around 18-20% and i think HSBC overdraft rate is around 20% aswell, so moving either of these onto the barclaycard life of balance would be a good step, i would probably say the virgin card since any move which involves you bank account usually incures a larger charge due to it being a 'cash' transfer and not a balance transfer

jaydizzy

i should mention my expenditure after readings martins advisory note;

income approx £1200

outgoings,
approx / month
citi card £62
virgin £78
petrol / commuting £120
cinema dd £13
gym (i do go regularly!) £28
mobile £27
professional studies loan £220
hsbc £50
debt to brother £30
food approx £150
- total £778

i have an old hsbc overdraft of around £2300 which I pay £50/month to clear
i owe my brother approx £700 which i pay £30/month at the moment

have recently just paid £550 for car insurance, road tax end of this month too,

thats as much as i can think of right now, any more info needed please say

gonzo127

since it appears you have quite a few bits and bobs could you please fill in a post up the SOA (statement of affairs) found in the following link http://www.makesenseofcards.com/soacalc.html if you fill it in as accuratly as possible with interest rates etc and then post it up on this thread we can then go through it all with you making comments to help you

jaydizzy

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1195.45
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1195.45

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 27
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 50
Petrol/diesel........................... 120
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 100
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 80
Holiday................................. 0
Emergency fund.......................... 0
(Unnamed monthly expense)............... 0
brother dd.............................. 28
gym..................................... 28
Total monthly expenses.................. 583


Assets
Cash.................................... 300
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1300

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................2775......62.45.....5.8
credit card....................5805.92...78.04.....0
overdraft......................2352.24...50........19.9
career development ln..........11120.....231.6.....11.8
student loan...................0.........0.........0
prof studies loan..............6200......220.......5.75
Total unsecured debts..........28253.16..642.09....-


Monthly Budget Summary
Total monthly income.................... 1,195.45
Expenses (including HP & secured debts). 583
Available for debt repayments........... 612.45
Monthly UNsecured debt repayments....... 642.09
Amount short for making debt repayments. -29.64

Personal Balance Sheet Summary
Total assets (things you own)........... 1,300
Total HP & Secured debt................. -0
Total Unsecured debt.................... -28,253.16
Net Assets.............................. -26,953.16

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

***My Career development loan payments begin on 31/05/10***

gonzo127

jaydizzy wrote: »

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1195.45
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1195.45

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0 - no rent or mortgage? where do you live and do you put anything towards the normal expenses?
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 27 - this is quite high, how many mins and texts do you use? are you on a suitable tarrif, if not phone up the companie and ask to be dropped to a more suitable tarrif, the worst they can say is no
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150 - is this you share of household expenses? if not £150 for one person is a lot, this could be dropped to £100 with ease, drop a brand challenge, meal planning, and batch cooking
Clothing................................ 50 - you must have a lot of clothes already with this amount each month, try and ware what you own for the time being, and when you need some others look at the cheaper places such as tesco, asda primark, matalan and even charity shops
Petrol/diesel........................... 120 - do you drive effeicently? (slowly accelerating etc)
Road tax................................ 0 - no tax?
Car Insurance........................... 0 - no insurance?
Car maintenance (including MOT)......... 0 - no maintenance?
Car parking............................. 0
Other travel............................ 100 - whats this for?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 - never buy anyone presents for birthday/christmas etc
Haircuts................................ 0 - never have your hair cut?
Entertainment........................... 80 - this probably needs to be cut down
Holiday................................. 0
Emergency fund.......................... 0
(Unnamed monthly expense)............... 0
brother dd.............................. 28
gym..................................... 28
Total monthly expenses.................. 583


Assets
Cash.................................... 300
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1300

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................2775......62.45.....5.8
credit card....................5805.92...78.04.....0 - this will be roughtly 20% as well i think
overdraft......................2352.24...50........19.9
career development ln..........11120.....231.6.....11.8
student loan...................0.........0.........0
prof studies loan..............6200......220.......5.75
Total unsecured debts..........28253.16..642.09....-


Monthly Budget Summary
Total monthly income.................... 1,195.45
Expenses (including HP & secured debts). 583
Available for debt repayments........... 612.45
Monthly UNsecured debt repayments....... 642.09
Amount short for making debt repayments. -29.64 - not great (but do-able) as it means you are currently getting into more debt each month

Personal Balance Sheet Summary
Total assets (things you own)........... 1,300
Total HP & Secured debt................. -0
Total Unsecured debt.................... -28,253.16
Net Assets.............................. -26,953.16

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

***My Career development loan payments begin on 31/05/10***

ok i have made a few comments above and tried to guess what i think some are.

your main problem you are going to find is currently the only major places you can find the extra money is your entitainment budget clothes and mobile phone (possibly groceries how i am expecting that is your 'rent' as well)

now your big loans for career development and the professional studies loan are the ones that are 'killing' you finances at the moment, however from the names of them i am guessing you need these to get a promotion, how long away is your 'new job' do you expect? could you get a different job either closer to home so less petrol or better paid in the mean time or are you tied to your current role?

look on the up your income board on this site for options on making a little extra cash by doing daily clicks, surveys etc, also do you have any things you can ebay to get a bit of extra money togther to make some lump sum payments from your credit cards to try and drop the minimum payments?

Little_Miss_Uni-Debt

Hi and welcome! :j

Just thought I'd add a few points. I see you've added your Direct Debit to your brother in your outgoings. I really would add this into the debt section. You can then keep track of the balance and cancel the DD once it has been paid off.

Also I see you have listed £80 for entertainment and £50 for clothes pcm. Just cutting down £30 between these two items would make your budget break even!!!

It would also be a good time to include a small payment towards your annual car costs so that when they come up next year you have the money put aside.

You've really got to squeeeeeze down those outgoings to leave you with some £££'s to throw at the cards/overdraft. I know it's hard but it will save you a fortune in interest and tightening your belt now will help you to become debt free quicker!

Once you've got some room in your budget you can use the snowball calculator to work out when you'll be debt freeeee! Be warned though, it can get addictive!

jaydizzy

gonzo - i'm living at home so have no rent/mortgage at the moment (truly embarassing but there you go, its out!)
mobile phone - this is up for renewal in july, i get a lot for my money and will definitely negotiate - i'm thinking may be get the upgrade and sell on ebay?
groceries - i eat a lot because of my gym commitments but i will definitely try drop a brand and plan my meals better, eating every 3 hours is getting expensive :-s
clothing - i will cut this down massively
car - i don't actually understand how to budget for this so i will follow little miss uni - debts advice and put a little aside each month, i mean is it better to pay off car insurance monthly even though it costs more over the long run? and to pay 12 months road tax rather than 6?
other - this £100 is my travelling to london for a course, but that will stop next month ( i managed to blag a rail card otherwise that would have been twice as much)
entertainment - will cut this down
and haircus etc i think i've included in grocery expenditure

ok now for the stupid question - my budget shows me rougly £30 under, what do i do with any surplus each month put it back in to the highest interest rate debt?

gonzo and little miss uni-debt, i'm forever indebted to you (unfortunate choice of words!), seriously though i was feeling very stuck and helpless this morning and now i feel i can handle this, thank you again

gonzo127

hey Jay, glad you are feeling a little more confident. now to your questions and comments

mobile phone - yes you might get a lot for the money however do you actually use it all? phone them up and find out what yoru average usage is (over the last 6 months) how many mins texts and mb (internet) usage you have had then base your search around this, just try to bare in mind if you are a texter 3 currently are doing 75 mins and unlimited texts for £10 a month and most other companies do simular deals for about £15

groceries - well you would be suprised what can be done here, some people on these forums can do the groceries for a family of 4 on under £150 a month, if you have to eat every 3 hours (little and often) batch cooking would be a great way to go to save you time and effort, basically bulk buy your food and cook enough for multiple meals, split it up into multiple tubs and freeze them - home made ready meals, just look at my signature for some basic maths on the drop a brand challenge the other one is look at what you are cooking, lots of good cheap healthy meals can be made, tuna pasta bake for example, one tin of value tuna, 1 or 2 tins of value chopped tomatoes, frozen value sweetcorn, some onion, garlic and cheese (to your liking) and value pasta 4 portions for under £2 anyways check the old style board for other potential meals to try out

clothing - well thats great, make sure you budget a little bit even £5-10 a month is able to get your a few things if you need them

car - well its better to pay upfront if you can, and the best way i have found to budget for this is to set yourself up a savings account just for your car expenses, work out what 1/12 of your annual costs (1/12 of insurance premium, MOT, Tax and a little bit extra for any repaires) and set up a standing order into your savings account for this amount then when they come around you have your savings which you can transfer to cover the costs and pay in a lump sum therefore saving yourself having to pay the interest for monthly installments

other - well thats great, once thats finished it will then give you a £70 surplus (30 taken off to cover your current lose each month) each month without taking into account any other savings you can make. this could be used to cover such as your car expenses and or a emergency fund (£50 for car £20 for emergency for example)

entitainment - its great you are willing to cut this down, try not to become a hermit thou when you are thinking or going out somewhere just consider other options,
for example friends want to go out for a meal - offer (if parents are ok with this of course) that they come to yours and you will cook if they bring the beer/wine etc
look at the vouchers on this site lots of 2-4-1 deals on days out eating out etc

good luck and if you need any other advice or even just a rant everyone on these boards will try and help or lend a 'ear'