Am I doing things right?

MQuinton

Hi all

I've been stupid!

Ever since i was 19 i've spent more money than i earnt on cars, holidays etc etc and it snowballed without me realising.

In total I owe £25,471!!!!

2 months ago i took out a loan with lloydstsb for 25k over 44 months to consilidate my loans and c/cards and I pay £635 a month towards it. However because of xmas and me and my girlfriend's engagement i have used £1326.54 on my cahoot current account ovedraft (10.8%). I have recently cut up my egg card and my cahoot card but have just been accepted for a virgin card with 0% balance transfer rate for 12months with a 2k limit which i am going to use to pay off my cahoot overdraft.

I moved back home with my parents in april and they do not charge me any rent so I can pay off as much debt as possible. I earn approx £290 a week and have no outgoings apart from £45 mobile phone and fuel costs (approx £30 a week). Unfortunatle I spend far too much on takeaways due to my girlfriend working odd shifts and her being unable to drive i have to pick her up and take her to work.

As we have just got engaged though my girlfriend wants us to start looking at a place to rent, I could afford this along with her wages but I as I recently changed my loan to £635 a month I can't do this. I have also recently been refused 2 credit cards. I am assuming my credit report is still showing the cards and loans I have recently closed. Ideally I am looking to get a 25k loan from northern rock over 10years so I can afford to rent a place. How long do I need to wait before i'm likely to be accepted for the northern rock loan as I have only made 2 payments to my lloyds loan so far??

I have already started using quidco and I'm going to sell some old stuff on ebay to start paying off the new virgin c/card.

My budget has been ruined because of xmas presents and that's why i'm stuggling to get my bank account up to a reasonable figure so I can start paying off the loan without borrowing from elsewhere. It's a slippery slope I know. Think I might use the remaining 0% available on the virgin card to bump up my current account so I can start budgeting properly (is this a good idea>)

I'm tired of debt, but I only have myself to blame. It hurts cause it's stopping me and my girlfriend from moving out and having a family.

Any other advice would be appreciated.


Mark

mjdh1957

Hi and welcome to the forums!

In general, it is not a good idea to borrow more to repay debt.

There's lots of good advice on these boards, so have a look around.

You really need to tell your gf about your situation. Renting a flat sounds impossible for the time being, especially if you need to borrow another £25,000 to do it. That would bring your total debt to over £50,000 plus you'd have rent to pay.

A good place to start is to make a SoA (statement of affairs) with your total income and outgoings so people here can look and see where you can start to make progress.

Good luck!

MQuinton

Thanks for the welcome.

Sorry what I mean is I'd need to take out a northern rock 25k loan to pay of my lloydstsb 25k loan as they don't do loans over 10years.

Regards

Mark

mjdh1957

Ok, I see now.

But the point is that you're just making matters worse by extending your loan period. I would still say that you can't afford to rent a place now and you you should tell your gf that.

Take some time to cut back on what you spend (especially the takeaways) and get back onto an even keel. Frantically trying to get more credit is only wrecking your credit rating in any case.

Do you have any way to increase your income? Take a second part-time job? Sell the car?

I'd recommend posting a full statement of affairs and see what folk on here think.

Good luck with it all - the first steps on the road to recovery are the hardest!

Imelda

Ok Mark,

I think I get what you're saying:

Earnings: approx £1257 pm (do you get paid holidays/ overtime etc?)

Outgoings:

loan repayment: £635
Mobile: £45
petrol: £130

So, by reckoning you have £447 left over per month. What does this go on? It appears that you spend more than this per month at the moment. Keep a spending diary to see where this goes.

You have a car, but you haven't put aside money for things like tax, insurance, mot- does this normally go on the overdraft/ credit card? You need to budget for these. The same goes for xmas and birthdays, holidays etc.

Does your fiancee (congrats by the way) know about your situation? Is she in debt too?

My advice- delay the renting, knuckle down and pay off as much as you can now, consolidation is not the best way, you have already proved that by running up more debt after the Lloyds loan.

Sorry if this seems a bit harsh, I am at work and rushing a bit!

MQuinton

Thanks again!

The only reason things have gone a bit pear shaped is because of xmas, I probably should of delayed re-structuring the loan to pay off a larger amount after xmas. You are right I don't budget for insurance, mot etc I just need to get even before I can start the budget.

Yes she does know i'm in debt, wasn't easy to tell her but she's been great. I can't believe what a mess i've made. So angry with myself, especially as my parents have tried so hard to teach me the value of money all my life and they've never had a credit card or anything.

Thanks.

Mark

Asher

Well if you two are going to be an item for the long term the best thing she can do is help you pay off you loan so you can both start out with a clean slate. If she does not want to do that explain that it will enable the two of you to be able to get a place quicker because at the moment you cannot afford to live away from parents. In addition to rent you will have Council tax and all other bills as well as food an everything else you have now. If she could pay say £200 a month how much quicker could you be out of the hole?

nomoneytoday

The consolidation is pointless UNLESS YOU CHANGE THE UNDERLYING ISSUE. Christmas or not, spending £1000 a month cannot continue. Put together a budget, AND STICK TO IT !!

lynzpower

Can I ask what you spend over 1000 of debt on Xmas for?

Nuclear_Tom

I'm in a similar situation, and at you sound just like I did about 6 months ago - kidding myself into thinking things were ok, reapplying for credit all over the place etc, not a care for "budgetting" or "money saving", living to a price etc...

You need to make a proper budget. It sounds to me like you are earning a decent wage with very little outgoings.

I now have the money saving bug - I have loans with 55 months remaining, yet I know that if I stick to my strict budget I'll be debt free in 21 months. 21 months of grafting, scrimping and saving and it will be amazing to be in a position where I can comfortably afford a property and be reasonably well off.

Whilst she can't contribute to my debt, my girlfriend fully understands my/our situation, and it totally supportive.

My advice to you is to keep a spending diary, and then make a budget. And budget for everything, gifts, phone usage, car maintenance, treats, food etc... Then stick to it, making overpayments off your debt where possible. If you are good with excell I have a brilliant spreadsheet that will help...

I know this sounds slightly harsh, but without the kick up the @rse I got, I'd still be getting deeper in debt, and to be brutally honest, it seems to me like you need a radical mental and lifestyle change before your debt will start to come down.

All the best though, I wish you every success. You CAN do it, and you've made the right decision by coming on here!

Imelda

No point beating yourself up about the past, put it behind you and think about the future.

You need to change your spending habits, and fast. We all have excuses, Christmas, I planned the holiday before my light bulb moment, I need new shoes (and they're just mine!). Take back whatever presents you can, would your girlf prefer a trinket or to move in with you a month earlier?

And Asher is right, life is only going to get more expensive once you move out, you have got to nail this debt now while you have no commitments.

take a look at the snowball calculator- I'll dig out the site in a mo- and see when you'll become debt free. See how much sooner that can be if you pay extra each month. I think you are blinkered by the monthly payment amount, you need to consider the overall amount you will be paying back.

Edit: the link http://uk.whatsthecost.com/snowball.aspx