Hi - Where to go for advice?

kylie_smiley

I went to my bank last week for advice re: existing debt. I just wanted a review to see if I was doing everything right to pay it off, but he proceeded to try and sell me a loan to consolidate, which is not what I wanted at that point at all!

Debts are currently on 0% deals which will come to an end in the next few months so I wanted to check out my other options. I'm so confused about all these 0% deals and life of balance deals and I just don't know what's the best way to sort it. I'm trying to snowball an extra £100+ a month, but I'm worried about whether I should have an 'emergency fund' set up, as I know I am far too tempted to use my CC for non-emergencies and so I really need to get rid of them completely.

I am off to the CAB for an appointment tomorrow (hopefully) am I going to the right place?

CH27

Hi
Post your SOA up here & people will happily advise you.

lambda

Hi,

I think you've come to the right place right here! There is some excellent advice on this forum!

For starters, my bank said exactly the same to me 4 months ago: I had a huge overdraft and a credit card and they wanted to sell me a loan. To me, the loan made no sense: I could pay off the overdraft faster and I moved my CC balance to a 0% card. The people in banks are on commission for selling loans and CCs, so I wouldn't listen to a word they say.

If I were you, I'd post a SOA (statement of affairs) on here to show all your outgoings and incomings. That way people can really help you to pay off your debt. The golden rule, generally, however, is: pay off the highest interest debt first.

CAB is a good place to go for help, too. How much debt are we talking here?

Hope this helps, and good luck!

kylie_smiley

A lot - enough to worry me. I can make minimum payments and a bit more at the moment, but am worried it will spiral out of control. I've got a handle on my budget now, but I just can't see it ever being gone. I've just doen a SOA - not sure of the asset figures though. Will post what I have so far.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1751.32 - this will be increasing in september, but so will my perol - new job!
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1751.32

Monthly Expense Details
Mortgage................................ 446
Secured/HP loan repayments.............. 191
Rent.................................... 0
Management charge (leasehold property).. 70
Council tax............................. 89
Electricity............................. 25
Gas..................................... 25
Oil..................................... 0
Water rates............................. 18
Telephone (land line)................... 30 - this includes my internet
Mobile phone............................ 35
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 20
Petrol/diesel........................... 60
Road tax................................ 14
Car Insurance........................... 37.62
Car maintenance (including MOT)......... 35
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 - live in an apartment
Contents insurance...................... 13
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 25
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 50
Total monthly expenses.................. 1416.62


Assets - not sure of asset worth at the mo - could find out tho
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........(446)......0
Secured Debt.................. 0........(191)......0 - car loan
Total secured & HP debts...... 0.........-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
VIRGIN.........................6158.14...70........0 - [FONT=&quot]£1608.52 0.0% p.a. until 6 May 2011, [/FONT]
- [FONT=&quot]£1515.95 1.9% p.a. until 8 July 2011, [/FONT]
- [FONT=&quot]£2381.29 0.0% p.a. until 7 Nov 2011.[/FONT]
NATWEST........................2900......60........0 - this is 0% too, until Dec/Jan I think - will double check
Total unsecured debts..........9058.14...130.......- - :eek:


Monthly Budget Summary
Total monthly income.................... 1,751.32
Expenses (including HP & secured debts). 1,416.62
Available for debt repayments........... 334.7
Monthly UNsecured debt repayments....... 130
Amount left after debt repayments....... 204.7

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -9,058.14
Net Assets.............................. -9,058.14

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

lambda

Thanks for the SOA - but can you give me the APRs for all the loans? Or are they all 0% and for how long?

kylie_smiley

Just realised I hadn't done that! Will edit!

CH27

Do you actually have the £204 left at the end of the month?

Keep a spending diary detailing every penny you spend & you will soon see where the cash is frittered away.

Do you get the 25% Single Person Discount on your Council Tax?

kylie_smiley

I do get the 25% discount, yes.

I don't have the £204 left - so a detailed spending diary is a good idea. I've thought in the past of just doing it my photographing reciepts on my phone, but I feel a bit self concious doing it...this isn't really the time to be worryig about that though, is it? :rotfl:

I really, really want to get rid of the CC, but the thought of having no emergency fund worries me a lot.:(

lambda

kylie_smiley wrote: »

A lot - enough to worry me. I can make minimum payments and a bit more at the moment, but am worried it will spiral out of control. I've got a handle on my budget now, but I just can't see it ever being gone. I've just doen a SOA - not sure of the asset figures though. Will post what I have so far.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1751.32 - this will be increasing in september, but so will my perol - new job!
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1751.32

Monthly Expense Details
Mortgage................................ 446
Secured/HP loan repayments.............. 191
Rent.................................... 0
Management charge (leasehold property).. 70
Council tax............................. 89 do you have the 25% discount?
Electricity............................. 25
Gas..................................... 25
Oil..................................... 0
Water rates............................. 18
Telephone (land line)................... 30 - this includes my internet this is high
Mobile phone............................ 35 this is high
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100 is this exact?
Clothing................................ 20 cut down on this
Petrol/diesel........................... 60 how accurate is this?
Road tax................................ 14
Car Insurance........................... 37.62
Car maintenance (including MOT)......... 35
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 - live in an apartment
Contents insurance...................... 13
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 Families don't need presents!
Haircuts................................ 25 25 a month? could you not go every other month instead?
Entertainment........................... 100 This is a lot - what's this for? I think you should cut this completely and use it to pay off your debts
Holiday................................. 0
Emergency fund.......................... 50 Arguably, an emergency fund is useless until your debt is paid. Use it to pay off the debt.
Total monthly expenses.................. 1416.62


Assets - not sure of asset worth at the mo - could find out tho
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........(446)......0
Secured Debt.................. 0........(191)......0 - car loan
Total secured & HP debts...... 0.........-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
VIRGIN.........................6158.14...70........0 - [FONT=&quot]£1608.52 0.0% p.a. until 6 May 2011, [/FONT]
- [FONT=&quot]£1515.95 1.9% p.a. until 8 July 2011, [/FONT]
- [FONT=&quot]£2381.29 0.0% p.a. until 7 Nov 2011.[/FONT]
NATWEST........................2900......60........0 - this is 0% too, until Dec/Jan I think - will double check
Total unsecured debts..........9058.14...130.......- - :eek:


Monthly Budget Summary
Total monthly income.................... 1,751.32
Expenses (including HP & secured debts). 1,416.62
Available for debt repayments........... 334.7
Monthly UNsecured debt repayments....... 130
Amount left after debt repayments....... 204.7

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -9,058.14
Net Assets.............................. -9,058.14

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

OK I don't think it looks that bad. Are you putting your car tax+ maintenance away each month into another account? Make sure you do, so you can't spend it. Some people argue that an emergency fund is pointless until your debt is cleared. Because: A) the emergency never happens and you could have used the cash to pay off debts. No worse off. The emergency does happen and you use debt to pay for it. No worse off (the 50 pounds a month has already cleared some debt in the process).

At the end of every month, your budget (SOA) should be balanced. So that the money left is 0 (this includes everything: all outgoings, savings, etc.). If you are spending more that you are earning at the moment then your SOA isn't accurate.

What I'd do is this:
Set up a simple current account with a different bank. One with no overdraft and just a simple debit card. Pay into it a budget each month by standing order for your groceries + petrol. Try and accurately workout how much you'll realistically need each month for this. Then, ONLY USE THIS ACCOUNT for spending.

The next thing: set up a simple savings account (you can do this online these days). Set up a standing order from your current account into it to pay for your road tax and MOT+ maintenance.

Do this for 1 month and see how much you have left at the end in your main account (the one for bills and your pay goes into, not the budget account). This surplus is the amount you have to kill your debts. Without accurate info, though, it's very hard to see where you are going wrong.

You are earning a decent salary: I am on exactly the same wage. I budget 350 each month for food and petrol for 2 people. I have about 500 left over to pay for my debts.

kylie_smiley

Thanks for that!

I agree about the entertainment, but how do I get a social life without spending any money? I get very lonely living on my own and don't like to 'put on' friends who are settled with a partner so usually suggest a night out. Will try and make the effort to change this, but most activities require some spending, and I can't become a hermit, I'll go mad! Any suggestions gratefully received though!

I do need to sort out the phone/internet. Can't change the mobile tariff right now as I'm locked into a contract

The groceries isn't exact, but I tend to spend between 20-25 a week, trying to stay healthy and fruit and veg is expensive!

Petrol cost is reasonably accurate. It costs about £50 to fill up my tank and I usually only fill up once a month at the moment. When I change jobs it'll be more often, but the wages will increase at about the same rate so it covers itself if you see what I mean?

Haircuts- I probably could, but I'd look like a mop with my short hair all over the place, it's a friend that cuts my hair, but at his salon, but that makes it harder to change salon/find somewhere cheaper. Will think on this one though...

kylie_smiley

Have just seen your edit. I'm going wrong because I spend too much! LOL!

That's a good idea re: the bank account. So I'd leave the direct debit stuff etc going out of my current, current account and then have the rest as my spending money? Most currecnt accounts require you to pay in your wages though, don't they?