Which debt to tackle first...

Sharon87

I've just landed myself a fairly decent job, 3 month contract on a TV show, which is quite long for my particular job. I'm going to have a regular wage coming in! I'm about to move house, so in my SOA I've put the most I'm prepared to pay for rent and bills combined.

I need a plan to pay off some of my debt in this 3 months. I am learning to drive, which is non negotiable, it will help me with finding work, bring more job opportunities, no interest in actually buying a car yet. The only negotiatable thing about it is how many lessons I take, but it needs to be 4 hours a month minimum, I've budgeted for 6 hours (3 2 hour lessons).

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1111
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1111

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 550
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 22
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 103
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 10
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Driving lessons......................... 156
Total monthly expenses.................. 996


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC OD........................1400......25........19.9
Natwest CC.....................1028......30........0
Halifax CC.....................860.......8.6.......15.9
Argos Card.....................245.......50........0
Mum............................640.......10........0
Natwest OD.....................50........0.........19.9
Total unsecured debts..........4223......123.6.....-


Monthly Budget Summary
Total monthly income.................... 1,111
Expenses (including HP & secured debts). 996
Available for debt repayments........... 115
Monthly UNsecured debt repayments....... 123.6
Amount short for making debt repayments. -8.6

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -4,223
Net Assets.............................. -4,223

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using other browser.

My minimum payments for Natwest CC will go down as the balance goes down I have 18 months interest free then it will go up to 17.9%. I'm having real trouble paying off my HSBC OD. The Natwest OD is my current account that I use, it's end of the month and I'm getting some money soon!

I want to save as much money in the next 3 months to get me in a better position in January and February when work is thin on the ground. I'm hoping to pay less rent than that thought, maybe £520 or £500 if I can!

InDeepDebt

Is that the correct repayment for the Halifax card? - It looks like you're making a payment of 1% of the balance yet are being charged 15.9% per annum or about £11 - this means that, if correct, the balance will be going up.

With your HSBC O/D - looks like the interest is about £23 a month - so you're paying off £2 a month.

Whilst it would be good to pay as much onto the highest APR (HSBC) - I'd up the Halifax payment by a tenner so that the balance is at least going down and then whack the remainder onto HSBC - so that should mean that you can pay it off in under 14 months.

What will you do for money after your three month contract is up?

PS - good luck with the driving. Is it cheaper to do 2 hour lessons than two 1 hour lessons. I would have thought that having multiple 1 hour lessons would give more benefit that a longer stint.

elaine12022

are your gas/electric included in the rent?

Sharon87

At the minute I pay £500 a month in rent and bills together, but I'm moving before the 12th September, so rent will most likely go up, but going to try find somewhere for roughly the same price in the areas I'm looking. This is for a house share in London.

For the Halifax card I'm currently paying 1% as it's still on 0% for 5 more days, I think the minimum payment will go up to meet the amount of interest, as I've heard banks have to charge minimum payments that at least covers the interest. So that would go up a bit.

In January, I'm hoping to get some work, my contract may be extended, but there's no guarantees. If I don't have a job, JSA and Housing Benefit will tide me over (just) until work starts up again. This January I didn't work a single day! And I had most of February off too. My name is making it's way round loads of production companies, people keep phoning me asking if I can work for them! I've had 5 phone calls/emails this WEEK asking me to work, so hopefully I'll be able to get something soon after that contract.

Driving lessons - you can't get done much in an hour driving in London! Especially my dual carriageway lesson I had the other week!

DS4215

Looking at your balance of £245 for Argos - is there any way that you can scrape together enough to pay this back? The payments are £50 a month and that would be a great help to the other debts. Try to clear the Natwest od too. It might only be £50, but it feels a lot better to have 2 less debts

DizzyDizzy

The only comment I can see is that your groceries look quite high - but living in London may not help that anyway.

Can you get any friends to go out with you in their car and let you get extra practise in? The extra practise may help you pass your test quicker?

Tixy

Congrats on the job
I wonder if the £550 is very realistic to include council tax and all utilities etc. Also is it likely to be possible to just rent somewhere for the 3months you want to live in that area.
If you don't yet know where you will live then is the travel cost a set figure? Is there anyway to reduce this cost? eg by looking to rent somewhere nearer where you will be working?

Obviously at the moment it looks like you can't quite afford your minimum payments, although hopefully you can juggle that by reducing groceries or entertainment a little bit. But it doesn't look like it will be possible to save much during this period.
Is there anyway to increase your income? could you get a parttime job around the main job hours? or might you be able to get any overtime that would pay extra?

Sharon87

The Argos card is actually my brothers which I owe him on a 0% deal. It was £495 in total and I have £250 in savings account. It needs paying by January, so earning a few pennies on it. I would put it in my overdraft, but I'm afraid I would spend it! If it doesn't get paid off by mid Jan it's about 30% APR and backdated!!

Tixy - thanks, I'm looking forward to the new job. £550 is about right for a house share in London, I can get cheaper I move to East or South London. The £103 travel is for Zones 1-2 travelcard. Moving closer to work would mean an increase in rent by hundreds of pounds! If I move to Zone 3 though the rent may be cheaper but travel costs go up about £20-£30 more, depending on how I get to work. I work by Piccadilly Circus at the minute and will do again in September, and nearly always central London for other jobs. I don't want to move for just 3 months, as after this I'll need to find a job and a house, and a house is difficult to get with no job. But if I'm in a house share already I can claim HB/JSA. Also 3 months will make it Christmas time, even more tricky to find a place round then!

I do need to get my groceries down, I'm always eating crap, I do cook, it's just the snacks that make the bill higher! I wish I had friends in London with their own car! My mum refuses to let me practice in hers when I go see her, insurance will be costly too.

Overtime is usually unpaid in my job, you get charged a daily rate, not hourly. Also I have a set amount of work to do, so working overtime actually decreases any possibility of my contract being extended! although I am taking on a couple of weekend jobs within the contract, as I'm still working on another show, which has an episode filming during September.

I might try and ebay some more items and try and start the survey sites up again. I've counted my change jar and I have about 20 quid in it. £10 can be cashed in - 2 full bags of silver!

Sharon87

Oh also my Natwest OD of £50 will hopefully be sorted by my next pay check. I have an overdraft of £750 on it, which I try not to use, but money was a bit tight this month, so had to go into it!

InDeepDebt

Sharon87 wrote: »

...

I've counted my change jar and I have about 20 quid in it. £10 can be cashed in - 2 full bags of silver!

Some banks have coin counting machines - certainly our town centre HSBC does. Simply pour your jars of money into the machine, the machine does its stuff, then you stick your card in and the money is transferred into your account almost immediately.

wannabedebtfree_2

Sharon87 wrote: »

The Argos card is actually my brothers which I owe him on a 0% deal. It was £495 in total and I have £250 in savings account. It needs paying by January, so earning a few pennies on it. I would put it in my overdraft, but I'm afraid I would spend it! If it doesn't get paid off by mid Jan it's about 30% APR and backdated!!

Put the savings into your overdraft and then ask the bank to lower your overdraft to just £50 (as a buffer zone). It doesn't make financial sense to have savings earning 1-2% in interest when you are paying interest on your debts.

I used to have 3 seperate accounts with overdrafts and was always in all of them, but one of them was gradually withdrawn until I have no overdraft facility, and another I have gradually withdrawn to £250, and the other has remained the same for now. I plan to pay them off asap and then get rid of my overdraft facilities on all of my accounts. It's unecessary fees and I've got into the habit as using the money automatically, my main account is always running close to the limit and I'm paying them £10 per month for the privilege, I used to think that was a pretty good deal until I worked out last night that it works out around 34%!! I'd rather that £10 was in my pocket now so as soon as I sort out how much of my student loan/grant is left I will pay back as much as I can.