I am 25. How do I pay over £11000 worth of debt? Any advice greatly appreciated.

Robert_Sterling_3

Here Here Western Promise.

ms_london

I have to agree aswell - we are only saying this for your own good. I know it sounds harsh, but we wouldnt want to see you in a worse off mess in a few years down the road - get out while you still can.!!

Justin_Credit

Ian,

I can only agree with most of what has been advised above.

You have a lot going for you. You are young and have a decent income, so if you knuckle down and go along with the advice given above, these debts could fairly soon be history. Yes, it will be hard. There will be many times when you will be tempted to spend unnecessarily but you must remain strong. It is a great feeling when you pay off each creditor and see your total indebtedness going down.

I would forget saving for the moment, you would be far better to wait a while until you are debt free before considering house purchase, and, as stated above you are better off ploughing as much as possible into paying off the debts.

You mention that you would like to spend more on hobbies, that's great, but wait until you can afford to. Hobbies have a habit of being expensive, you could make moneysaving your main hobby for the time being? I have done this, it becomes addictive.

So, Ian post as much info as possible, as others have said earlier. There will be some great advice on how to pay off the debts in the cheapest possible way etc. from some experts on here.

Good luck.

JC

Woby_Tide

deemy2004 wrote:

According to his post, he actually has £300 left for living off i.e. food, clothes, travel, subsistence or about £69 per week.

OK, missed the bit about the extra £100 but that looks to be ending soon, food I assumed was covered in his board, his clothes appear to all be paid for on store cards which payments are also covering so I'm guessing with a bit of will power could maybe even go lower than you suggest short term, will be a bit crappy, but as said before it's long term benefits you've got to look at. I finally cleared my £17kodd student debts(self inflicted...;) )a couple of years back and know it's a struggle


now I get to reap the benefits of a huge mortgage and a new baby leeching what little money I had left instead....:D

deemy2004

westernpromise wrote:

Ian mate - this is an emergency! You're eleven grand adrift here!

Seriously. You have £500 on deposit on the off-chance you might need it, and meanwhile you're paying probably 30% interest on store card debt of less than that amount.

Your "savings" are thus not your savings at all - they're debt. You are borrowing that money at 30%, you are not saving it.

Use it. This is that rainy day.

Its probably best to keep at least a months money in saving as emergency say £300 - What if he has to suddenly pay a big bill or charge or penalty.. then he can call on his emergency funds. rather than be hit by repeated late payment penalty charges

westernpromise

deemy2004 wrote:

Its probably best to keep at least a months money in saving as emergency say £300 - What if he has to suddenly pay a big bill or charge or penalty.. then he can call on his emergency funds. rather than be hit by repeated late payment penalty charges

If it were me, I'd wait until the emergency materialised, and then borrow money at 30%!

deemy2004

westernpromise wrote:

If it were me, I'd wait until the emergency materialised, and then borrow money at 30%!

Given that you have just missed a payment.... what if they said NO ?

And then the avalanch begins.............

Xbigman

As to your savings...

We are talking about money management long term rather than short term worries. I've been here myself and the way I did it was to pay every penny I could find (savings, overtime, sold some stuff I never used 2nd hand, etc...) and cleared the credit cards. Then I closed all but one card which I used for petrol / shopping and have always since paid off in full each month. I then tackled the loan I had. As the number of debts I had shrunk, the more I could pay off each month increased and the less I needed just to live. Having a decent cost of living / free income ratio is the secret to surviving emergencies, not short term cash reserves better used to clear debts.

As for the main problem..
There's a lot of good advice here which I'll not repeat. The basic message though is that you should change your outlook to money and live within your means. That might not sound appealing when you are in your mid 20's but the alternative is less appealing.

The opposite philosophy.
You are 24. You consolidate over ten years but with your spend, spend credit card philosophy you run up a few cards again.
OK you are now 30 and you still have 4 years on that consolidation loan plus 3k on cards again. You are back where you started from and you are wondering, should I consolidate again? A lot of people live their lives like this and are happy for a few years then miserable for a few years, then happy again... Eventually it all catches up with you and you are just plain miserable.

Lets be optimistic and maybe this 'really' is your last consolidation loan because you've learnt your lesson. OK. You pay off this loan and you are 34. You now want a mortgage but need to save a deposit to get a good deal, say 3 years. You look around and buy somewhere and you are now 38 with a 25 year mortgage. That means you pay your mortgage off aged 63. Does that sound appealing?

Pay off those debts my friend, its the only way.
Regards


X

PS. 42 tommorrow, 22 yrs and 5 months mortgage left. Yes I learnt the hard way.