I'm Going to Reduce My Debt

Hallam_Macca

Right I've done all my Christmas shopping for friends and relatives. I'm pretty much skint until next year. It's time I started to sort out my finances!

I'm currently in a heap load of debt mainly from going to University a couple of years ago and not getting anywhere near sorting my debts out. I want to be able to do many things but I cannot do them while I've got this debt hanging over me.

Overall not including my Student loan of just over £8000 I owe £4802.40.

I have 2 Debit Cards, the main one that I use is with NatWest of which I have an overdraft of £1250 which I don't pay any interest on whatsoever. My debt on that account is [B]-£1,113,15[/B]. My other card is with Barclays Connect with a £500 overdraft and a £11.50 a month charge from Barclays just so I can have an overdraft. I don't use this card at all but the current balance is -£548.99.

I have 2 Credit Cards also, one with MBNA @ 16.9%. I currently owe £2250.26 on this card. The other card is with Capital One which has a reduced interest rate of 6.9% for the life of any balance transfers. My limit on this card is £1000 and I owe £890 on this. I use this card to transfer the debt from my MBNA card and pay less interest.

I'm hoping to use this site to help me reduce my debt so I can achieve some future goals. I want to own a house and get a car and improve my standard of living.

Those are my main aims but they seem miles off at the moment which can be quite depressing when you think about it on a Sunday. I'm living with my grandad who is great and I can't thank him enough for letting me stay here. I've moved out before to go to university and I had a great time having my own independence and doing what I wanted to do. I haven't got this now and I need to get my own place to regain this.

I also share my mum's car but I can only use it when she isn't using it which sometimes can be a bit limiting, I'm also not allowed to drive any huge distances which can be a bit frustrating at times for me.

I've had enough of things/people limiting what I can do. It's time I got about changing things for the better.

lynzpower

Hi there MAcca :wave:

Welcome to debt free wannabee.

the first place to start is to do a SOA ( statement of affirs) Its vital you have a handle on what goes out when, and wehat your APRS are and so forth. Southern scousers sticky tells you all you need to know

Have you got any old textbooks from uni? they sell quite well on amazon/ ebay etc even if they are a bit old. Ive sold loads recently & I graduated in 99


Anyhow all the best

Hallam_Macca

Hi lynz. Thanks for the welcome.

I'm going to do an SOA now, I'm trying to sort through all my stuff as well see if any of it will be good enough to sell on ebay and that. Hopefully some of my old textbooks will be knocking about somewhere in that.

Thanks for the advice.

Hallam_Macca

The SOA is as follows

Incomings

Salary £834.01

Total £834.01

Outgoings

Rent £100
Sky £43.50
Gym £25
Mobile £55 (rough average)
Season Ticket £23.89 (finish payments end April)
Latics World Internet Subscription £3.99
Contact Lenses £22
Food £50 (approximate)
Football/Going Out £150 (approximate)
Credit Card Payments £100

Total £573.38

Debit Cards:

NatWest Total £1,113.15 - Overdraft limit £1250 - 0% Interest
Barclays Total £548.99 - Overdraft limit £500 - Unsure of interest but minimal - £11.50 a month charge just to have overdraft facility

Credit Cards:

MBNA Total £2250.26 - Credit Limit £2500 - 16.9% Interest
Captial One Total £890 - Credit Limit £1000 - 6.9% Interest on balance transfers - Only use this card to pay off debt.

beanielou

Think that you have some room to save some dosh.
Do you use the gym?
Can you cut moblie bill?
What about your football/going out ? £150 is a lot of money on top of your season ticket.
I think you need to try to get rid of the Baclays debit as thats the one you pay an amount every month for.

Hallam_Macca

Yeah I use the gym quite often. It's going to watch football that is the biggest drain on my resources I think. I watch my team away from home so sometimes it's not just the football the costs money, it's stopping at motorway services and spending so much on their overpriced stock. Think I could do with cutting some of the games or finding a cheaper way to do it.

Would you say it would be best to pay the Barclays off first and just pay the minimum payments on the credit cards?

CLAPTON

it would help you greatly if you worked out where all your money is actually going...your budget above only shows where 573 is going ..so what about the rest.

in your circumstances, where you would like to move out its very important to build up a realistic budget so you can see where everything actually goes and so you can prioritise your spending... so e.g. you have nothing in your budget for any annual or one off spending...like clothes, holidays, the odd present, xmas etc...with all these you need to work out what you are likely to spend over the next 12 months, divide by 12 and add a line in your budget and actually save that money each month so that when you need it you dont need to use the overdraft or CC but you have it saved up already.

also do you have any travel to work costs, do you spend anything on petrol, any work lunch/coffees costs, does your grandad pay your food as 50 per month seems very low, any magazinnes/newspapers/haircuts?

have you tried to keep a spending diary so you can really find out exactly where you money is going?


you income is quite low, is there any scope for improving the income or working overtime, get a second (parttime) job.

paying Barclays 11.50 per month for a 500 overdraft means even before any interest charges you are paying 138 per annum which is the equivalent of over 28% APR...so clear that overdraft asap and change your bank a/c to one without this very expensive OD facility

Johnhowell

Hallam_Macca wrote:

The SOA is as follows

Outgoings
Sky £43.50

Cancel this, or get others in the house to pay their share.

John

Hallam_Macca

Updated SOA

Incomings

Salary £834.01

Total £834.01

Outgoings

Rent £100
Sky £43.50
Gym £25
Mobile £55 (rough average)
Season Ticket £23.89 (finish payments end April)
Latics World Internet Subscription £3.99
Contact Lenses £22
Food £50 (approximate)
Football/Going Out £150 (approximate)
Credit Card Payments £100
Clothes £50 (approximate)
iTunes £10 (approximate)
Presents/Xmas £30 (approximate)
Pub Lunches £10
Haircuts £5
Holidays £50

Total £728.38

Debit Cards:

NatWest Total £1,113.15 - Overdraft limit £1250 - 0% Interest
Barclays Total £548.99 - Overdraft limit £500 - Unsure of interest but minimal - £11.50 a month charge just to have overdraft facility

Credit Cards:

MBNA Total £2250.26 - Credit Limit £2500 - 16.9% Interest
Captial One Total £890 - Credit Limit £1000 - 6.9% Interest on balance transfers - Only use this card to pay off debt.

This SOA is a bit of a guess on some items. It's hard to decide just how much I've spend. I'm going to use this as a diary of what I've spent from now on.

My rent goes on food for the house. I've got a holiday coming up in January that I've forgotten about. This has been paid by my mum but I will have to pay her back in time.

I agree that my pay is low, just had a pay rise believe it or not. My work is very stingy with the overtime they dish out, prefering to pay it in pizza rather than dosh! There will be a few jobs available in the new year due to maternity leave but on hearing the money isn't much better than I'm on now.

Kevicho

Hallam_Macca wrote:

Updated SOA

Incomings

Salary £834.01

Total £834.01

Outgoings

Rent £100
Sky £43.50 <cancel this, watch footy at the pub )
Gym £25 <this necessary? can you go jogging or do excercise at home?>
Mobile £55 (rough average) <is this payg or contract? needs to be cut down!>
Season Ticket £23.89 (finish payments end April)
Latics World Internet Subscription £3.99<this needed? doesnt bbc sport cover it all? My football club i get most of the info free, but dont get interviews, id cancel this>
Contact Lenses £22
Food £50 (approximate) <check out the old school board to see if you can cut this down for the house>
Football/Going Out £150 (approximate)<may need to cut down>
Credit Card Payments £100 <this is debt repayment, you have around 250 a month you could put towards debt repayment before cutbacks?>
Clothes £50 (approximate)<do you need this amount of clothes per month?>
iTunes £10 (approximate)<this needed?>
Presents/Xmas £30 (approximate)
Pub Lunches £10 <when do you go for pub lunches? take sandwiches>
Haircuts £5

Total £678.38

Debit Cards:

NatWest Total £1,113.15 - Overdraft limit £1250 - 0% Interest
Barclays Total £548.99 - Overdraft limit £500 - Unsure of interest but minimal - £11.50 a month charge just to have overdraft facility

Id move to the A&L you can get an overdraft with them which doesnt charge and is interest free, this fee is a rip off

Credit Cards:

MBNA Total £2250.26 - Credit Limit £2500 - 16.9% Interest
(THis is your number one priority to pay off, pay minimal on the others, put as much as you can to this)
Captial One Total £890 - Credit Limit £1000 - 6.9% Interest on balance transfers - Only use this card to pay off debt.
(Can you get the limit increased on this and transfer it from the MBNA card?>
You could also ring up MBNA to haggle the interest rate down, saying you could transfer it to a 6.9% card and ask if they will match it for 12 months

TBH you need to cut back a bit on your lifestyle.
Also find a better job, I wouldnt work overtime for pizza, thats disgraceful

Hallam_Macca

Thanks for the feedback Kevicho. I've acted on some of your comments. I'm keeping Sky as it's for my grandad also but I could do with reducing this somehow soon. Only got it last month so getting the payments reduced might be difficult?

I've cancelled the internet subscription as I agree I don't really need it or use it that often.

The amount I've spent recently on clothes has been a bit high recently but this is due to a skiing holiday I'm on in January so I've needed to get one or two things, this should reduce in time.

iTunes isn't really needed so will try not to spend anything here.

The pub lunches are normally for special occasions at work, could just bring in my lunch as usual I suppose.

I'll try to get a A&L debit card, have had trouble getting new cards in the past, don't know if this will affect if I can get one or not this time?

I've had a look at my Capital One account, it says I cannot request an increase and Capital One themselves will increase this if they see fit in accordance of their terms & conditions. So doesn't sound good. Will ring MBNA up when I get back see if I can get the interest reduced.

Feeling much happier about my finances now it seems I'm getting things straight.