So, here I begin!

gorebrush

Hello there!

A little about me - i'm an IT Administrator in South Wales. I live with my girlfriend in rented accomodation (I've only moved out of home in June) and i've found that i'm struggling with money as all the money I earn I seem to be spending on bills etc.

This month for example

£550 Rent
£301 Car Insurance (this pays up 6 months)
£201 Car Loan payment.

This is before i've put food on the table. Fortunately my girlfriend is working and so she pays half of everything.

But i've also got some other debts, but they are quite small compared to some! (If you dont mind my say so)

I have a Car Loan for £7300 (total left to pay) which i'm covering - it's fixed, so that wont get paid until 2009, unless I manage to settle the whole thing beforehand.

Student Loan - Not sure what do to about this - Part of me says now that I should think about getting rid of this... I've been paying back about £50 a month for the past 18 months of a £9,000 loan.

Credit Card - Now, believe it or not, this is what troubles me the most. I've got a £700 balance to sort out, but the mere thought of this is far more frightening than the car loan and student loan put together.

The Car loan actually brings me back to a funny story.

I bought my car on Finance (BIG MISTAKE). Finance was £6,300. (because I bought a £10K Car, and part ex-ed a £3,700 one). All good, until, 2 weeks later, i had all the documents through confirming the REAL NUMBERS that I had to pay back.

I was on this 3x3 finance scheme through the dealer that meant that I would pay a "low" monthly repayment for 36 months. At the end of this, I then had the choice of

1. giving the car back, no more payments
2. paying the balance, keeping the car
3. using the equity earned by paying up for the car, as a deposit for a new car.

Anyway, bottom line is, I want to keep the car.

Figures were thus

£180 per month for 36 months
£3,500 settlement at the end.

So, that means I would have wasted £4,000 in interest/settlement

I immediately found out about Loans, and I had a £6750 Loan for £7570. I immediately settled the finance (which cost £7,000) - so I lost £600 in my stupidity, yet ultimately have saved myself £3,000.

Anyway, car's all settled now, and the nasty finance - I will never touch again.

SO yeah, the Credit Card stands at £700. I've got £115 to my name, and I only got paid on the 15th. HMm. Luckily my g/f hasn't paid her half yet so i've got plenty to come.

Plan with the credit card is - i've applied for a virgin card, I'll BT the £700 over to that, and pay it off £60-£100 a month until it's done.

So hopefully, that'll be gone in 8 months.

However, since moving out, i've found that no matter how much money I earn, I never seem able to save anything. How the hell I go about buying a house in a year or two's time defeats me.

I do have an online savings account through my bank, I think I should force myself to use that.

I do keep my bank account in the black at all times, yet I have £500 overdraft which is fee free and interest free. I'm tempted to use that to pay off the CC, as I obviously have cleared the debt and am living interest free. But, I was using the overdraft as my "emergency buffer" - what if my car needs a new tire, or the TV breaks, etc etc....

Are my plans OK you think?

Hoping i'm being sensible and working to clear my debts (but the same time keeping my credit score good.... I'm considering taking up being a full time tart in order to make purchases too, will make life a bit easier if i'm understanding everything correctly!)

Cheers

Dave

climbgirl

Well, first things first, can you post a full SOA? A list of all your incomings and outgoings and your debts - with full amount, APR and time left to run.

Don't bother with savings while you're paying off debt - your debts will be costing you more than you make in any interest so you're effectively losing money.

Also, I don't think you should be paying back your student loan. Read Martin's article on this. But basically, the interest on the loan is lower than any you get in a savings account so you're better off doing that for the time being. Forget the student loan for now and focus on the other debts.

If the car loan (which is now through a bank and not car finance if I'm reading your post correctly) is fixed so there's not much you can do about that because you don't have the full settlement sum. Just keep paying it off each month.

Which leaves your credit card! Throw as much as you can at this, including what you're paying off your student loan. When it's gone, hten you can tackle your student loan or start saving - it's up to you!

Without a full SOA it's harder to give more advice than this...

CLAPTON

moving out of home for the first time is quite a financial blow especially as the male of the specie has a (financial) suidicial attraction to expensive cars.

in your circumstances, and without knowing hardly any of your fincancial details, the most valuable thing you can do is to learn to budget.
many people budget for the 'obvious monthly' things quite well but forget about the yearly/one off things so have to borrow on CC etc and so a spiral of debts starts.

so sit down with OH and plan for the next 12 months...income presumably is fairly easy but look at all your spending plans for the next 12 months,
easy thing like rent, utilities, food, socialising, petrol, travel, mobiles, food at work, hobbies etc
but also include all the yearly stuff ...car tax, insurance, servicing, breakdowns, holiday plans, clothes, presents, weekends away, xmas costs....all these you add up and divide by 12 and you SAVE this amount each month so when it comes to pay these costs you dont borrow on CC but have the money saved...this might be quite a frightening thing to do.

you might like to post it here and see what people here think about it.

presumably your student loan is the later model..if so i would only pay the minimum until you have sorted out your finances (say review in a years time).

tryhard_2

hello and welcome
here is the link to budget planner. good luck

James&Shell

We found it really hard when we first moved out as you dont reaslise all the bills and things when you first move out .

At least you hae found this site now and there are plenty of people on here who can help.

Good Luck

gorebrush

Later Model of Student Loan - I have been reading around on the website, and judging by the amounts i'm paying back (£50 per month), I'm on the old model ??

I graduated in 04.

Quick SOA

Income

£1400 in salary
£400 from OH

Outgoing

Rent - £550
Food - £160 p/m
Diesel - £120 p/m
Electricity - No Idea.
Water - No Idea.
Gas - No Idea. (we've been in our house since June and not received one bill yet..)
TV - £21 p/m
Broadband - £22p/m
Phone - £80p/quarter
Mobile - £25p/m
Council Tax - £81 p/m

Credit Cards/Loans
HSBC ~ £700 @ 18.9% APR (Shocking, I know)
Loan HSBC 6750, fixed at 7.9% APR (£7300 remains) over 36 months (35 remain), £210 per month
Student Loan = was £9,000 at Jul 04. Graduated Sept 04.

toontastic

My first thoughts are how much do you use your phones ? You have a bill basically for £105 for the phone which is a hell of alot. Can you not change your home phone tariff or move to pay as you mobile ? Your broadband also isn't the cheapest it may be worth while lumping that in with your phone if you can see if that makes it cheaper.

However counting up your payments between you, you earn £1800 but your spends only come to £1259 give or take. And if we guess your paying £30 for gas, water and electric each that still only comes to £1349 leaving you £451 so where does that money go each month ?

gorebrush

Sorry, Landline is £80 per quarter.

I think rental is £20 per month.

I wont change broadband as we are heavy users, and that was a good a deal as I could find.

For the last few months i had to fork out everything for the house as my OH didnt move in until July, and by the time she was getting regular wages it was 2-3 months so that meant I was saving nothing. It's only last month and this i've been able to take advantage of excess. This month it's been wiped out by a £301 car insurance payment. Lack of foresight on my part that was - When I took out the insurance I was living at home, and had 100% disposable cash, so I agreed to pay it in two lump sums of £250. Then I change car and this made the second lump into £300. But at the time, I wasn't renting. Lack of planning there.

Next month however, I should be getting a bonus, and as I said my OH is now regularly paying in, so i'll be able to save that 450 a month easily. I could probably pay the CC off in two months with it!

Brassic

Be careful with not paying the utilities. When I was in my last rented place I set up the gas and elctricity bills, completely forgot about the water bill. What a shock when I got a letter asking for 600 quid or so now that the year was up. <gulp> I'd be phoning your suppliers and finding out what's going if I were you.

gorebrush

Good thinking, I best had.

I had a letter of the water company 2 months ago with a Credit for £6.

Still no idea on Gas/Leccy tho.