Not sure what to do...all advice welcome!

nat2010_2

Hi, I'm new on here and looking for some advice on my financial debt situation.

Long story short I have an unsecured personal loan with HSBC, outstanding balance of £27465.90 with 77 remaining monthly payments of £356.70. My bank account that I have my salary and direct debits paid in/out is with HSBC, there is a £500 overdraft on this account that I always use. I also have a credit card with HSBC, there is £989 balance with a limit of £1000. I'm still paying my student loan, there is approx. £4000 remaining and I pay £103 monthly. I don't have any savings.

I'm really worried about my future, I'm 31 and have a good job (for 6 years) but I live with my parents. There is no way I can afford to rent or buy a home for myself. I know all of this is my own fault, I build up and ignored when I was younger and naive, it really gets me down now. I have a boyfriend, he lives an hour's drive away in another city. We try to see each other as often as we can and things are getting serious where we're talking about 'what next' and 'what do we do about the distance?'. He doesn't know about the debts yet. I want to tell him but I'm so scared how he will take it. As the HSBC loan won't be paid off for another 6.5 years this could potentially affect our future when it comes to relocating, buying a home, kids etc.

I've done a summary of my income and outgoings as accurate as I can. While I can pay the loans (I haven't any defaults etc) I'm not able to save anything or pay off my overdraft or CC each month. I aim to save at least £200/month for holidays. Haircut isn't monthly, usually every 10-12 weeks at £60 a time. My car tax is £85 for 6 months, I usually pay for this in one go out of the month's salary. I've cut down a lot recently on clothes, although in all honesty I'm prone to the odd splurge but this is nowhere near as much as what I would spend a few years ago. Other regular payments include contact lenses and solution, which I buy cheaper online, this is usually around £30 every 3 months.

In my current job my salary will increase on average £1000 pa (approx. £50/month after tax?) every January.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1750
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1750

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 180
Rent.................................... 100
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 100
Petrol/diesel........................... 150
Road tax................................ 0
Car Insurance........................... 61
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 12
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 50
Holiday................................. 200
Emergency fund.......................... 0
Gym..................................... 44
Toiletries.............................. 30
Total monthly expenses.................. 1032


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


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 10000....(180)......10.5
Total secured & HP debts...... 10000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC loan......................27465.....356.......8.7
HSBC CC........................989.......24........18.9
Student loan...................4000......103.......4.4
Total unsecured debts..........32454.....483.......-


Monthly Budget Summary
Total monthly income.................... 1,750
Expenses (including HP & secured debts). 1,032
Available for debt repayments........... 718
Monthly UNsecured debt repayments....... 483
Amount left after debt repayments....... 235

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -10,000
Total Unsecured debt.................... -32,454
Net Assets.............................. -42,454

KingElvis

Sorry to be cruel but I would forget the 200 PM for holidays until you get rid of the debts.

You could have that CC paid off in five months at that rate and then have your holiday...........

Also dump the gym.

All the best and good luck.

podperson

Have to agree, you say you are looking to plan for the future but your soa does seem to be all about the short term. If you didn't have a holiday this year you would have an extra £2400 to pay off the debts. This would pay off the cc and a quarter of the student loan. If you put the surplus you have every month towards this as well it could double. If you got rid of the gym and cut the clothes budget in half it would add an extra £100 a month. It just depends on how serious you are about actually cutting down the debt.

NorthernLas

A spending diary is a really good way of finding out how much you spend each month. You just write everything down.

If you are spending £100 a month on clothes, do you have any that you can sell on ebay?

Anything that you pay out less than once a month, just work out for the year and then divide by 12.

roberts516

Hi Nat2010
Congrats on realising things are getting too much. Yes have to say the Gym fees have to go and the holiday fund.£100 clothes allowance should go to for a while and clear your Hsbc cc . Im not expert just joined myself you will get lots of good advise here so stick with it and be honest with your boyfriend too. Best of Luck

MFWannabe

nat2010 wrote: »

Hi, I'm new on here and looking for some advice on my financial debt situation.

Long story short I have an unsecured personal loan with HSBC, outstanding balance of £27465.90 with 77 remaining monthly payments of £356.70. My bank account that I have my salary and direct debits paid in/out is with HSBC, there is a £500 overdraft on this account that I always use. I also have a credit card with HSBC, there is £989 balance with a limit of £1000. I'm still paying my student loan, there is approx. £4000 remaining and I pay £103 monthly. I don't have any savings.

I'm really worried about my future, I'm 31 and have a good job (for 6 years) but I live with my parents. There is no way I can afford to rent or buy a home for myself. I know all of this is my own fault, I build up and ignored when I was younger and naive, it really gets me down now. I have a boyfriend, he lives an hour's drive away in another city. We try to see each other as often as we can and things are getting serious where we're talking about 'what next' and 'what do we do about the distance?'. He doesn't know about the debts yet. I want to tell him but I'm so scared how he will take it. As the HSBC loan won't be paid off for another 6.5 years this could potentially affect our future when it comes to relocating, buying a home, kids etc.

I've done a summary of my income and outgoings as accurate as I can. While I can pay the loans (I haven't any defaults etc) I'm not able to save anything or pay off my overdraft or CC each month. I aim to save at least £200/month for holidays. Haircut isn't monthly, usually every 10-12 weeks at £60 a time. My car tax is £85 for 6 months, I usually pay for this in one go out of the month's salary. I've cut down a lot recently on clothes, although in all honesty I'm prone to the odd splurge but this is nowhere near as much as what I would spend a few years ago. Other regular payments include contact lenses and solution, which I buy cheaper online, this is usually around £30 every 3 months.

In my current job my salary will increase on average £1000 pa (approx. £50/month after tax?) every January.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1750
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1750

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 180
Rent.................................... 100
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25 - Cut this down or go payg
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150 - this is a lot for one person; cut knock £50 off this
Clothing................................ 100 - You need to cut this right down to approx £20 per month while you pay off debts
Petrol/diesel........................... 150
Road tax................................ 0
Car Insurance........................... 61 - This is high; check comparison sites to see if you can get cheaper
Car maintenance (including MOT)......... 0 - you need something in here even if it's £10 per month to cover mot; tyres; servicing etc
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 12 - What is this for?
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0 - you have put nothing in here although above you say this would be equivalent to £20 per month; which is a lot; see if you can get it done cheaper
Entertainment........................... 50
Holiday................................. 200 - you need to stop this while you are paying off debts; you could get your cc paid off quickly with this amount per month
Emergency fund.......................... 0
Gym..................................... 44
Toiletries.............................. 30 - This is high; try to cut back
Total monthly expenses.................. 1032


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


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 10000....(180)......10.5
Total secured & HP debts...... 10000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC loan......................27465.....356.......8.7
HSBC CC........................989.......24........18.9 - concentrate on this one first; using the £200 per month you say you set aside for holidays
Student loan...................4000......103.......4.4
Total unsecured debts..........32454.....483.......-


Monthly Budget Summary
Total monthly income.................... 1,750
Expenses (including HP & secured debts). 1,032
Available for debt repayments........... 718
Monthly UNsecured debt repayments....... 483
Amount left after debt repayments....... 235

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -10,000
Total Unsecured debt.................... -32,454
Net Assets.............................. -42,454

Hi
Welcome to the board. I've added some comments above. You should also think about opening another account for your wages to go into; as everything you have is with HSBC; that way you'll avoid them using offset rule; meaning they won't be able to take your money to pay off debts

Hope this helps

nat2010_2

Thanks v much so far, I appreciate your honest advice.

Coincidently I was thinking of suspending or cancelling the gym this week so that would be £44/month saved.

Using the holiday fund money for paying of the CC sounds sensible and 5 months isn't that long....given me something to think about, thanks for that KingElvis. The only thing with having no funds for holidays is having to explain to my bf why. I know this is going to have to happen sooner rather than later.

All the clothes I have I do wear, I often have clear-outs every year and it goes to the charity collections so I don't have any old or unused clothes to sell on ebay. I have thought about limiting myself to one clothing item or clothes shopping spend per month of £50 and I've started using discount vouchers or looking online for cheaper items.

I have to admit I do lose track of how much I've spent during the month or a busy week, especially with those unplanned trips to the supermarket or boots where I end up spending £10 - £20 which goes unaccounted for. A spending diary sounds like something I need to start doing!

romylou_2

OMG £30 per month on toiletries!!! Try the "No toiletries for a month challenge". Trust me it works! You will have to be tough and inventory all of your goodies (this will also no doubt shame you when you see how much you have!) There is a thread for this - and once things have been used up, you can either recommend or advise not to buy again for whatever reason. It is a very helpful thread.

Ditch the gym - Ive just cancelled my £52 per month membership. (Ive just broken my ankle so won't be using it for a while anyway!!!!

Slash your clothing budget, this is way too high as is your groceries, £150 per month for 1 adult??? Do you eat out a lot???

Sometimes the little things can make a BIG difference

Good Luck xx

KingElvis

Save your clothes and shizzle for a car boot sale, I'm not kidding you can make quite a bit.

nat2010_2

Thanks FREEZ..

The £12 insurance is the bank account fee from HSBC for the advance account. I think it started in February 2010....I'm not sure if it's a 12 month thing or if I can cancel this atm?

Food spends I could cut down, as I said before I need to keep track of the unplanned visits to the supermarket and do a monthly shop (atm I go every weekend). I've started to look out for offers and go for them rather than just getting what I want/feel like!

My car insurance will not change until April 2011. I had a dispute with my insurers about this. I renewed in May with my new car (I bought a cheaper car in March, previous car was £250/month!), I thought the insurance would be cheaper as it's a smaller engine but due to 2 non-fault accidents with the new car in March and June this year the insurers decided to put my premium up!!

I'm on a 24 month contract for my mobile phone so that can't change for now?

KingElvis

Can I ask? what on earth car was 250pm insurance? a Bently Continetal? an Audi R8?

Blimey........