Advice to clear my Debts.....

Superbiatch

Does the person you live with not have any income at all?

obev0098

Yeah he does but I don't know what he earns, we rent rooms separately

katsu

obev0098 wrote: »

I've been thinking about doing some Bar work in a club on Saturday nights, I'm not sure though as people are saying i'll get taxed loads and it wouldnt be worth it.

You will still have more money than you do now, as you will not be taxed 100%, so it is still worth it.

OK, very simply...

Income tax is worked out on everything you earn. You will not get "taxed loads", you will get taxed no more by taking on a second job that pays £50 p/w than if you earnt an extra £50 p/w (or whatever) in your main job. It looks like the tax is more because you get an allowance of money (your tax code) which is paid to you before the tax applies.

So, if your tax code is 747L (on the top of your payslip somewhere) then you will get £7470 pounds a year paid without any tax deductions and the tax is just deducted from the rest. This £7470 is called your "free pay" (IIRC). This freepay is generally all applied in your first job, and all the income in your second job is taxed. This means if both jobs pay you £100 p/w, you take more money home from the first job, as you were only taxed on the earnings that were higher than the freepay. In the second job your freepay was £0 so you were taxed on it all.

Overall you have still only paid 20% tax (unless your total earnings go over around £43k, at which point you are taxed 40p in each exta £1 you earn OVER the £43k).

I hope this clumsy explanation is some help.

obev0098

katsu wrote: »

You will still have more money than you do now, as you will not be taxed 100%, so it is still worth it.

OK, very simply...

Income tax is worked out on everything you earn. You will not get "taxed loads", you will get taxed no more by taking on a second job that pays £50 p/w than if you earnt an extra £50 p/w (or whatever) in your main job. It looks like the tax is more because you get an allowance of money (your tax code) which is paid to you before the tax applies.

So, if your tax code is 747L (on the top of your payslip somewhere) then you will get £7470 pounds a year paid without any tax deductions and the tax is just deducted from the rest. This £7470 is called your "free pay" (IIRC). This freepay is generally all applied in your first job, and all the income in your second job is taxed. This means if both jobs pay you £100 p/w, you take more money home from the first job, as you were only taxed on the earnings that were higher than the freepay. In the second job your freepay was £0 so you were taxed on it all.

Overall you have still only paid 20% tax (unless your total earnings go over around £43k, at which point you are taxed 40p in each exta £1 you earn OVER the £43k).

I hope this clumsy explanation is some help.

That does actually explain it for me thanks :rotfl: I've spotted a few bar staff jobs in the City so will apply this weekend.

Little_Miss_Uni-Debt

Hi Obev,

Could you explain a little more about your living situation please? Does the other person you live with cover the household bills missing from your SOA - like council tax, phone line, TV license etc or are some of these covered in your rent?

It seems like you are able to meet your min payments being only 99p short. First important thing you need to do is stop spending further on your cards etc.

Look at what you spend on your credit cards from the statements. Are you maybe spending on them when things you haven't budgeted for arise i.e presents, clothes, holidays etc?

I would say your mobile phone, haircuts and entertainment costs are eating a big chunk of your income, cut these down/out as much as you can for a few months until you have a stable budget to cover your essentials.

Where's the overdraft that you mentioned in your first post?

You need to get a new basic bank account (like co-op cashminder) NO overdraft/credit and get your wages paid in there ASAP

On payday make your min payments to your debts and a small payment to your old overdraft (enough to cover the interest and keep it within limit). Then pay your rent, elec and water, this should then leave you around £460 in credit in your current account.

This £460 will HAVE to cover variable costs like groceries, travel costs, medical, insurance, entertainment and crucially - OVERPAYMENTS.

You need to find ways of reducing those last few costs to maximise what you can overpay at the end of the month. Also ideally boosting your income with a second job, that can completely go towards paying your debts off.

obev0098

Little_Miss_Uni-Debt wrote: »

Hi Obev,

Could you explain a little more about your living situation please? Does the other person you live with cover the household bills missing from your SOA - like council tax, phone line, TV license etc or are some of these covered in your rent?

It seems like you are able to meet your min payments being only 99p short. First important thing you need to do is stop spending further on your cards etc.

Look at what you spend on your credit cards from the statements. Are you maybe spending on them when things you haven't budgeted for arise i.e presents, clothes, holidays etc?

I would say your mobile phone, haircuts and entertainment costs are eating a big chunk of your income, cut these down/out as much as you can for a few months until you have a stable budget to cover your essentials.

Where's the overdraft that you mentioned in your first post?

You need to get a new basic bank account (like co-op cashminder) NO overdraft/credit and get your wages paid in there ASAP

On payday make your min payments to your debts and a small payment to your old overdraft (enough to cover the interest and keep it within limit). Then pay your rent, elec and water, this should then leave you around £460 in credit in your current account.

This £460 will HAVE to cover variable costs like groceries, travel costs, medical, insurance, entertainment and crucially - OVERPAYMENTS.

You need to find ways of reducing those last few costs to maximise what you can overpay at the end of the month. Also ideally boosting your income with a second job, that can completely go towards paying your debts off.

Thank you for your response.

I wasn't sure what the overdraft would be classed as a secure or unsecured debt.

The person I live with owns the house and I rent off him, the remaining bills he includes in the rent.

I do find myself making the minimum payment to the cc and thats about it, the balance doesn't seem to be going down.

Regards
Chris

getmore4less

Phone that should go.

Food , should be able to get that own to £100

Little_Miss_Uni-Debt

Secured debts are only ones that are secured against your home like a mortgage. Secured debts are more serious because if they are not paid they can reposess homes or put charging orders on for when people sell their house.

If you are a renter then all your debts are unsecured.

To make bigger dents in your debts you need to up your income!

Dinah93

So is £80 a month just for your phone? This needs looking into as its very high. I get unlimited web browsing, 1000 texts and 750 mins for £21 a month with Vodafone.

For some quick wins in getting down the balances stick some clutter on ebay and Amazon, even old DVDs soon add up - I've made over £3000 on Amazon alone in the last two years just selling clutter I don't want anymore that I thought was worthless.

For food for one you should be able to get this down under £100 and still eat meat and your 5 a day. We certainly spend under £150 a month for two of us including toiletries and cleaning and we're usually at 8 a day with good quality meat for dinner, no processed food. Try approvedfood for hugely discounted food - a lot of it is past the best before - but when you're looking at pasta or rice or sterilised sauces it doesn't really make a difference if its 2 weeks or 6 months past the date. I got my brother 29kg of food (addmittedly down the pot noodle and jars of sauce and tinned fruit line) for £34 - it saw him the last 2 months through uni when he'd spent all his money on boozing. Its your call where you draw the line - you might be happy with 10p packs of chinese noodles on there 3 meals a day and be able to cut your food bill down to under £20 a month for all I know!

I[d definately recommend a second job, and maybe look into mystery shopping. My DH does a lot of this, usually around 5-8 jobs a week, but he makes over £400 a month and we get a few meals out on top of this, so its worth doing.

Hope that helps x

DS4215

Its always worth dropping into a supermarket if you are passing at 7-8pm when food is marked down. You can sometimes drop on good bargains if you have room in the freezer (this week got 3 packs of yogs to freeze at 15p each plus 2 Thai curries at 99p each from Asda which would normally have come to over £7).