Sorting out my life...........

moorsy88

Hi All,

Im looking for some advice. Im a 24yr old male, living in the south and not great with money!

I look around and see friends in £15k debt, 20k debt, etc, and do not want to be in the same situation. So have decided to sort things before it gets out of hand.

my debt is quite small, I have a £400 overdraft and £600 on my credit card. My intrest on my CC is about 20% and my account is always in the overdraft and costs me about £25 a month ( £1 a day).

Can any members share the wisedom on what you would do in my situation?

Next month i will have an addational income of around £600 a month which i plan on using to clear that debt, then hopefully save for a house deposit!

Thanks in advance!

Little_Miss_Uni-Debt

Hi Moorsy,

Welcome and well done for starting to clear it all now!

Do you have a budget in place? Do you have many outgoings each month? Get those debts cleared fast and start saving!

Once your overdraft is clear reduce it down to £100 or something small just for emergencies! It ALWAYS creeps back up if you leave the option there. Then once you have savings get rid completely!

moorsy88

Hi Little Ms Uni-Debt,

And thanks for the response! Ive looked at a budget before but find it hard to stick to sometimes I get easily tempted to buy things. But now i want to clear this debt and get ahead in life!

My income is alot more then my out goings, so sure i can clear this quick!

I like the idea of reducing my overdraft! something i didnt think about before. If its not there then the temptation to use it goes!

Little_Miss_Uni-Debt

Hey Moorsy,

Sounds like you've got reasonable spending in place. There's nothing wrong with buying things that you want, you can still have a budget and include in it that you can spend x amount on whatever you like but for purchases over this amount then you'd have to save up.
Keeps you in check!

Its always good to look at your current expenses, while you can afford them you may still be able to get better deals and get every £ working for you!

For example, mobile phone contract, car insurances and the like - it pays to shop around even if you can afford their first price.

Also if you have things to pay for annually (birthdays, christmas, holidays) have separate pots/accounts to save specifically. That way when they come round you don't have to whip the credit card out!

money_honey

Hello!
Just to add, if you're in your overdraft every month and are getting charged £1 a day, it would probably work out a lot cheaper to switch to a different current account (I know you'll have to pay off your overdraft first). I'm with Barclays and am in my £300 overdraft for well over half the month, and I only get charged around 50p-£1.50ish per month depending on how long I'm in it. That would save you a lot on charges.

Good luck with it all!

needingaccountability

If I were you I would just clear all debt in the first 2 months of your extra income. And then as said drop your overdraft right down, I wouldn't get rid of completely unless your in the habit of checking online everyday as sometimes it can dip below 0 unexpectedly and it's far cheaper for that to happen with an arranged facility in place. I've managed with a £50 facility for years, using very rarely.

I'd highly recommend using a program like MSMoney to keep a track of finances, that way you can forecast the effects of any spending you do. i.e I know that at one point next month I'll have £1000+ in my current account but I also know I cannot spend any more than I have already budgeted for as the following month the account will drop to £13 at one point.

They key to sucess is to budget for absolutely everything, then you don't have to many surprises.

moorsy88

Thanks for all the replys, this is exactly the sort of information i was seeking.

I will budget again, pay my debt of in the first two months and then start saving for a house deposit. Thanks for the advice! :j