Lightbulb moment...!

Oompa_Loompa_2

Hi

I've been away from this site for quite some time. Not sure how my debts have stayed the same/or got worse (it's easier to kid yourself you're "okay", isn't it?!) I don't know if this is the right place to post (something I read on a closed thread suggested it was right to post a "new" thread). I've done a SOA on a recommended link, but it's not totally clear to me how much I should attempt to put towards my debts. I really want rid of them and have been guilty of overestimating how much I can afford to put towards my debts, then leaving myself open to asking family to bail me out temporarily and LOTS of £12 charges for overlimit fees on credit cards etc. Here goes:

What I owe:

HSBC: £1800
VISA: £2000
Natwest: £400
Miss Selfridge: £110
Dorothy Perkins: £130
Very: £1300 (buy now, pay next year - only way I could afford to buy clothes and replace my laptop, aiming to get rid of debts first then sort this one out as it's not gathering interest at the moment).
Overdraft £2000
Owe family: £700 total

Salary: £1100 per month

Outgoings:
Rent: was paying £350 a month, now moved into a room the size of a box (not kidding - there is not enough room for my clothes!) and have reduced this to £260 per month.
Sky: reduced from £20 to £12 per month due to living with other tenants
Council tax: reduced from £80 to £40 a month (living in a rougher area to boot :rotfl:)
Driving lessons: £250 for 2.5 months approximately (for 10 lessons, otherwise it's £27 per lesson).
Buses to work: £4 per day
Lunches: very budgety lunches!
Mobile phone: £40 per month
Alcohol: £40 per month


I feel embarassed now... but I guess admitting everything is necessary, isn't it?! Hope I've posted this in the right place.

rubywhatashmoo

How much are you currently paying towards your debts every month? Do you know which ones have the highest interest rates? Have you destroyed the cards for the accounts so that you can't be tempted to keep topping your debt up?

Oompa_Loompa_2

Storecards have the highest interest rate. I have taken all the cards out of my purse. I know I need to learn to put a manageable amount towards my debts, but this is something I haven't got the hang of yet! I tended to rely on credit cards for "emergencies" (ie. just not having enough for the rest of the month). It's about £350 I pay towards my debts each month, but really as much as possible so it can sometimes be more. I didn't mention in my original post that I just got approved for a 1K loan from my local Credit Union. The repayments will be £110 per month. So I guess I should put that towards the highest interest cards/storecards.

You're right - what I described above was topping my debt up. How have you been getting on since Oct 2010? Has it been hard?

keza

hiya - sorry just thought id mention you might want to just check the very account definately is interest free as i have an account aswell and 'buy now pay later' purchases are actually 29.9% apr! they charge u for the privilidge of paying later on! dont want this to cause more of an issue for u so thought id mention it. i can find a link to the T&C's if needed?
xx

DebtDodger

Well done for tackling the problem head on! My only advice (as I'm new to this myself!) is to actually cut the cards or ring and cancel the accounts altogether. This is the only way to totally stop yourself reaching for them in "emergencies". You then learn what is an mergency and what isn't and it has completely reformed my shopping habits over the last few months!

Good luck!

me123

Hiya,
You have a similar amount of debt as me and similar companies! I have an additions catalogue, balance is near £1000 and I am paying around £40 a month. Could you do a dmp? Or speak to the companies you owe? I owe HSBC £2200, spoke to them about my situation (one wage coming in now as I look after my son) and they have agreed to take £15 a month (instead of £132) until after Xmas as things might have improved. Partner may be getting higher paid job. I have gone down the 'do it yourself' route instead of a dmp with a company. Feel free to pm good luck!

S x

Fiddlestick

Cut the driving lessons - you can pick them up again when you have paid off the debts.

teabythesea

Cut that £40 alcohol money for sure? That could be going towards your storecards? Sorry I'm no expert just a little help x

rubywhatashmoo

Make a list of every debt you have and list the interest rates for them and minimum payments - you might find it useful entering it all into the snowball calculator so you can see on screen right in front of you how you should pay them back - do you need this new loan you are taking out, or are you taking that out to cover over debts? If you have enough left over from your salary to at least cover the minimum repayments so you don't get anymore charges added on you might be better off doing that. Even counting the driving lessons into your monthly account though you should have about £300 left over (so more on the two months in between paying for those, but you didn't mention how much you spend on food!) so unless you're already behind with payments it *is* enough to start paying them back - but I totally understand having an emergency card - although my "emergencies" end up being new shoes or DVDs when I'm down in the dumps - it just makes things worse the month after so if you could get rid of them and just be VERY careful for the first month without them (no treats other than what you've already budgeted for) - having the cards there as a safety net mean that you don't consider what you're spending because you've always got at the back of your mind "ah well I can use my card for the last week of the month" :P

Mine is going OK - slowly but OK I've got most of the debt onto a 0% credit card - the remaining amount on my other card will be paid off by the end of the year when the interest on that card would have kicked in (so I'm only paying about £210 a month in the run up to xmas) then at the start of the new year I only have one debt to put towards and will throw as much spare cash as I can at it to get rid of it!

Oompa_Loompa_2

keza wrote: »

hiya - sorry just thought id mention you might want to just check the very account definately is interest free as i have an account aswell and 'buy now pay later' purchases are actually 29.9% apr! they charge u for the privilidge of paying later on! dont want this to cause more of an issue for u so thought id mention it. i can find a link to the T&C's if needed?
xx

Hi - thanks for this. I think if you pay the amount off before the end of the BNPL period, you can avoid interest on the purchases altogether. I hope I'm right! Although you do have to call up and specify what it is for, or it will just put your account into credit (someone from Very told me this!).

Oompa_Loompa_2

Yep - alcohol money could DEFINITELY be cut out! The driving lessons, I'm reluctant to because I started years ago, then stopped and this time I haven't got long to go and reckon I'd waste even more money if I stopped now because I've stopped and started in the past. Also, the parents have helped out towards this at time, so I don't feel I should stop again. Confidence has taken a knock too, so I think going back to it might not happen. Good idea though, if I hadn't already wasted so much time and money, I'd be cutting these out!