Sinking deeper...

BlewIt

Hi,

I am need of some advice! found this site after hearing Martin Lewis on the radio.

I have been letting debts run up and feel things are now getting a bit out of control! I guess i have fallen into the trap of spending more than i have coming in. I will try to be as straight to the point as possible.

I am down to my last £220 this month with two weeks to go. I have £170 in direct debits still to come out before i get paid again. I still have to fill up my car to get to work and buy food. I will have to use a credit card to get me to the end of this month but realise i have a fundamental money problem - self inflicted, no lectures required - only advice!

I have an income of around £20k per year.

Debts i have are a loan with about £2800 left to pay (£220 p/m), three credit cards - £2000, £1400, £1200 and overdrafts - £1600 & 1000 - totaling around £160 p/m minimum payments etc.

Outgoing each month i have rent £400 (inc bills), mobile £10, diesel £180, car ins £47 - theres probably a couple of other things i've missed.

This doesn't leave very much left over and i have been living beyond my means. The cards have been slowly creeping up over the months. I have not quite maxed them and have probably around £500 of unused credit on them so i am not at desperation stakes for the remainder of the month but realise this is a situation that must firstly be stopped and then reversed!

I am considering consolidating all the debt into one loan so that there is at least an end in sight for the cards.

Any advice would be welcomed.

browneyedbazzi

Hiya, a good starting point is the sticky at the top of the board for first time posters - it will walk you through doing a statement of affairs (SOA) which you can post here for others to comment on. It's handy to put everything into this standard format because it will point out the outgoings you may be missing from your first post.

It's often good to do a spending diary for a while too, which means writing down everything you spend as you spend it (even a pop or lottery ticket) so that you can get a clear picture of where all your money is going.

You may also want to have a look at some of the other sections on the board like Old Style Moneysaving which is full of useful tips on how to stretch the money you have the furthest including grocery budgeting and meals plans etc.

Well done for recognising the problem and starting to sort it out!

dancingfairy

Hi Blewit (great username by the way ).
How much do you think you will need to spend before payday on petrol and food etc? You appear to have 50 pounds to last you.
What food do you have in the cupboard? It might be time to scrape out all the bits and bobs at the back of the cupboard and see what you can use up. I'd be tempted to dig everything out of the cupboard and see what you can make by only buying the absolute basics ie bread, milk and fresh fuit and veg. Make a plan for the next couple of weeks.
Longer term I suggest that you go onto the website maksenseofcards and fill in an SOA( statement of affairs) to see exactly what your money is going on - it will list everything on there (pretty much) as there are probably many things you spend out on that you haven't budgetted for - clothes, haircuts, entertainment, presents for christmas/birthdays etc. You need to include a monthly figure or things that crop up over the year like christmas etc to get a true picture. You will then see how much (or how little) you have available for debt repayments and if there are any areas you are overspending.
If you post up the results of the SOA on here people will be able to comment further but it sounds likely you will need to arrange some kind of payment plan with your creditors - there will be other options and I suggest as well as posting your SOA on here that you talk it through with one of the debt charities such as National Debtline, CCCS or your local CAB.
Best of Luck
df

BlewIt

Thanks,

Yes i have about £50 to last me two weeks and i would normally use about £90 in fuel! If the weather is reasonable i have been cycling in so have been scrapping by on £35 per week. I spend about £20-30 a week on groceries in general.

Is it worth making an appointment with my bank (RBS) and going to speak to them. Are they likely to helpful? sympathetic? My loan, overdrafts and one of the credit cards is with them. I was thinking of consolidating all into one loan over maybe 3 years. This would give me more spare cash per month and give a definate end date to the overdrafts and cards.

I have not defaulted on any payments as yet but i am not on the electoral role at my current address but i could switch my banking address back to my old address where i am still registered. (i moved about 8 months ago). How good is my credit rating likely to be?

BlewIt

...in other bad news i need some repairs done to my car (oil service (DIY) and a CV joint - possibly another suspension/drive type thing to but defo CV joint (can get done as a homer) ) and my road tax is due the end of this month!

Skint_but_Optimistic

Lord thats alot of money to find, if you post your SOA people can try and help you save some money.

poppasmurf_bewdley

BlewIt wrote: »

...in other bad news i need some repairs done to my car (oil service (DIY) and a CV joint - possibly another suspension/drive type thing to but defo CV joint (can get done as a homer) ) and my road tax is due the end of this month!

No lecture from me, as I've been in your shoes in a past life, as have many on this Forum.

You need to do two things from what I can see - reduce your spending and raise some cash for urgent repairs, etc.

I would plan to have a car boot stall this coming weekend. Sort out whatever you can find, and go and visit friends and relatives and see what you can beg or scrounge for them. I've never failed to raise about £100+. Few tips - make sure everything is clean and priced reasonably and prepare to haggle. Get there early as possible and you'll have people looking at what you've got before you can unload it all.

You spend very little on food, so you'll have to cut your spending down on other things like diesel.

You may have to live like a monk for a period of time, not going out, etc, etc, but in the end you can work yourself out of your problems and you'll feel much better for it.

What you must avoid at all costs is the trap of borrowing more in the hope you can spend your way out of the problem. Leave that to the government but it won't work for you as others on here will testify.

RAS

Hi
Do not consolidate your debts as this is a recuipe for disaster; 85% of people consolidating run up more debts and end up in even worse doo doo a year or two down the line. You need to address the cause of your spending more than you earn, and to budget properly.

Do an SOA http://www.makesenseofcards.com/soacalc.html because that helps identify where the spends are and the potential savings.

As you now realise, failure to budget also causes problems - you need to put money aside every month for car tax and repairs, iother wise they hit you when you can least cope with it.

List everything in the cupboards and fridge and go over to the moneysaving ooldstlye forum for help menu planning for the rest of the month (and maybe next month).

Consider a carboot sale or e-bay and amazon for the things you no longer use, do not need.

Do not talk to your bank; there is a rweal risk they will increase the APR on any accounts that you have with them because you will be seen as a higher risk.

Little_Miss_Uni-Debt

Hey BlewIt,

Just a few quick suggestions as I'm sure you're overwhelmed with info.

PLEASE don't consolidate. It seems like you've got around £10k debt now, if you are offered a loan - it won't be at a helpful APR% rate. You'll then be in between 12K-14K debt just by signing the papers! I know it's difficult but taking on more debt takes you further away from being debt free. Freeing up income now doesn't fix the reasons why you spend on your cards. Only a budget does that

Just pretend your cards are a flexible loan. Low min payments & you can overpay with no charges! Every £100 saved is around 1% of your debt currently!

Go to http://www.makesenseofcards.com/soacalc.html fill it all in based on what you spend now. Paste it up here and we can all help to find ways to save money.

You have lots of round numbers for your current debt amounts. You need to get really accurate and get APR rates for each debt so you know which order to clear them in. Every £1 is important!

With your current income you could clear your debt in under 2 years, way less if you work hard on all the tips from here A loan would be 3 years at the least.

There are some big wins to be had in the early days of tackling your debts. Reclaiming bank charges, any mis-sold PPI, selling on ebay, clearing junk through car boots, even down to counting up the loose change money pots around the house and driving more efficiently to save fuel. It all makes a difference!

Good luck, I'm looking forward to hearing your progress!

Little_Miss_Uni-Debt

Oh and as for finding ways to cut down on eating costs this month, why not arrange visits to your family and friends - maybe a few free meals to be had!

Marco_Panettone

Why only cycling when the weather's good? Get out on the bike EVERY day - if it's grim then dress for the weather and give yourself a bit more time to make the journey. Better for you, better for your money!

As others have said, post a full and honest SOA so we can criticize your every move!

Importantly you seem to be facing up to the issues and want to do something about it. This is the first step and SO important. It alters your mindset with regard to finances which filters into other parts of your life too. Good luck on the journey!