Finally facing up to it...

Heavenandhelen

And it sucks!

I used to be pretty good with my money (I bet you all say that! ) but over the past few years I've been pretty bad - I go out a lot for my job, I'm a bit of party animal and I love having new clothes, shoes, bags - most things a 24 year old woman wants, really!

Although I love my job it doesn't pay a ton, and I've been spending well above my means for a year or so now. I'm finally facing the fact that I need to do something about it and it's putting me into a bit of a panic!

Here's my SOA (hopefully I've done this right - I'm not really a numbers girls hence my current problems!).

Incoming:
My wage after tax: £1109

Outgoings (gulp):
Rent £325
Council tax £75
Gas/Elec £25
BT £11
Water £16
Phone £60
Household/groceries £125
Vision express £28
Mint card £50
Additions account £5
Grad loan £74.54
Barclaycard £30
Edd Card £45
Egg loan £161

Total: £1030.54

Add a few nights out onto that and I'm well over my limit!

Here's what I actually owe;

Barclaycard £1400
Mint card £2150
Egg card £498
Egg loan £5073.02
Grad loan £2950

Total: £12,071.03 (seeing it written down is actually giving my heart palpitations!).

So a few months ago I thought, right, I'll apply for a loan to put all my credit together and pay off around £200 per month, rather than the £400 odd it seems to be working out as. I was pretty shocked when I was refused, so I stupidly applied elsewhere. Refused again. I then contacted Experian for my credit report.

It all looked relatively ok, apart from the following; I had a financial association on my account with my sister, who I'd been paying rent out of a joint account with until recently, and she has recently undertaken an IVA. Could this have affected my application?

Also, I wasn't registered on the electoral role. I've now sent my registration form to my local authority and am in the process of getting my sister removed from my credit file (the joint account was closed in November). However, since then I've been over my overdraft limit on my account twice and though I'm really struggling for money, I think I'll be refused again if I apply for more credit.

I was contacted by a company after I was refused one of the loans and they offered me a debt management plan with Gregory pennington (i think), and I told them I'd think about it but don't like the idea of my finances in someone elses hands (though how much worse of a job can they do than me!) and being unable to get future credit (ie a mortgage when I want to buy a house).

I'm a bit stuck for where to go now. I know I need to cut my spending but finding it hard as I haven't told anyone I'm in trouble and keep getting invitied out to parties, dinners etc (a certain amount of which I need to attend for my job, but most because I just love going out!). Is it worth looking into debt consolidation loans? It would need to be unsecured as I don't own any property.

Any help, support, beratings would be greatly appreciated!

mjdh1957

Welcome to the fantastic world of the debt-free wannabees! There's lots of friendly advice here, so have a cuppa and relax a bit. No-one is going to judge you and lots of people can help.

Firstly, it's not a good idea to take out a consolidation loan. I did it twice before I had a real lightbulb moment, and each time I ended up with more debt because I hadn't adressed the fundamental issue, which is spending more than your income. So, the third time I consolidated, I was able to be much firmer with myself and managed to pay it off over 3 years early.

So basically, your options are:
1. Spend less
2. Earn more.

Ideally both at the same time


Good luck!

themaccas

Avoid debt companies like gregory pennington at all costs!! Also consolidation is never a good idea, it's looks like a quick fix but it rarely is many of us have gone down that route and have ended up worse off than ever.

There are a couple of things missing on your soa - travel costs?Do you have a car, use buses/trains for work? What is the additions account, do you owe on that. Your mobile costs are high can you reduce your tarrif? Try leaving your mobile at home a few days a week, we tend to think of them as a necessity but we coped without them for many years! You have a surplus of around £80 that could be used to snowball your payments to the Egg card, you can do this, once you start believing in yourself in paying back this debt you'll be surprised how focused you will become ebay, carbooting, charity shops will all become your friends!! Oh and us on here too. In the end I hope you find that being refused the loan was a blessing in diguise.

studentphil

On cost cutting, getting rid of the contacts and wearing your specs- very easy

125 a month for food (of course not sure what else you class in to that seems a lot)

Phone 60 quid seems a lot!

Heavenandhelen

Hi guys,

Thanks for the prompt repsonses - reading this and browsing through other peoples threads on the site really makes you feel a lot less alone!

I've just called Vodafone to cancel one of my phone contracts (i've had two for a while now as it was actually cheaper than what I was spending on my old phone!) which they're doing as of next month. I can't bring myself to cancel my contact lenses though - I'm too dependant on them! Does anyone know if a cheaper place I could get them from?

I'm also going to have a rummage through everything tonight to see what I've got that I could sell on ebay - I'm sure there's a ton of things I don't use that someone would want!

I don't own a car and I walk to work so my travel costs are low anyway - I only need to get the bus to visit family etc so that's minimal.

Also, what's snowballing? You're not talking about it in the Clerks sense, I assume...

dinkylou

Yep, if you wear contacts, try one of the online stores such as vision direct, much cheaper. I went from paying £18 per month to about £6 - worth looking into.

Also you need to start writing down where your money goes - £10/20 here and there makes a difference and then you can start cutting back better.

Little things like planning what to eat and sticking to a shopping list helps hugely to bring down those costs without suffering too much.

Also the phone, can you change to a better tariff or cut down? £60 is a lot, even for a heavy user.

I think you might be right about the association with your sister and her IVA on your credit report as this will be affecting you. Sounds like this is an urgent priority if you want to lower some of your APR's.

And lastly, as others have already said, dont consolidate and never go to Penningtons or any of these others. You can do this yourself with our help on here. But you may need to cut back on the social life slightly, it ll be worth it in the long term.

mjdh1957

Snowballing is a method of working out which debt to pay off the most.

Basically, you pay the minimum to all your debts except the one with the highest APR, which you pay as much as you can until it's paid off. Then you start on the one with the second highest, until that's paid off. And so on.

It means you save lots of interest and you can use the calculator here to work out a debt-free date. http://www.whatsthecost.com/snowball.aspx

Heavenandhelen

With regards to Payment protection, can I get this removed from my egg loan? I feel like i was kind of co-erced into taking it in the frist place.

mjdh1957

Heavenandhelen wrote:

With regards to Payment protection, can I get this removed from my egg loan? I feel like i was kind of co-erced into taking it in the frist place.

Yes, you can. But they won't refund the premiums you've already paid unfortunately. You just need to ask them to stop, and they should do it pretty quickly.

They will also recalculate the loan, you can either leave the payment the same and pay it earlier, or make a lower payment and have the same end date.

Mizz_Pink

What about having a bar job, that way you will earn money and enjoy the atmosphere and see your freinds at the same time. Just a thought.

melaniec_2

Hi
From the sound of things you have daily disposable contacts if so you could reduce to monthly and save yourself some money. Martin has an article on contact lenses somewhere.