My wake up call

pinkpinkuk

Hello all,

Ok I've decided to really focus on my debts and get them paid off. I went into the bank a couple of weeks ago on the advice of my boyfriend, to enquire about a loan to pay off my overdraft, credit card and uni fees to put me in the black and pay back over 5 years (so its all clear by the time I'm 30). In principle it sounded like a great idea, and when I talked through the figures with the guy at the bank I'd be paying back a lot less per month than I am struggling to pay at the moment. However, when he crunched some figures he said the amount was slightly more than what their calculations said I could "afford" per month (even though I spend a lot less than their figures say I should). I am due a slight pay rise in December, which would mean the numbers worked out so I agreed to go back hen to discuss applying for a loan at that time.

Now I've gone away and thought about it, I'm wondering if it is worth doing this or whether it would be cheaper to just pay the debts off rather than consolidate them. Here's my SOA for your perusal:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1145
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1145

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 150
Electricity............................. 35
Gas..................................... 0
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 12.12
Satellite/Cable TV...................... 41
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 62
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......................... 5.99
Presents (birthday, christmas etc)...... 0
Haircuts................................ 5
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1066.11


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
Credit Card....................1500......34.09.....17.9
Overdraft......................1700......0.........18.28
Uni fees.......................945.......0.........0
Total unsecured debts..........4145......34.09.....-


Monthly Budget Summary
Total monthly income.................... 1,145
Expenses (including HP & secured debts). 1,066.11
Available for debt repayments........... 78.89
Monthly UNsecured debt repayments....... 34.09
Amount left after debt repayments....... 44.8

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -4,145
Net Assets.............................. -4,145

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

At the moment I'm paying £100 per month off my uni fees (a priority for me because I need them paid off before I submit my dissertation, which should be in May 2012). I was paying £100 off the credit card, but due to lack of funds I'm down to minimum repayments.

Looking at my SOA a couple of things hit me. £62 per month on bus fare is ridiculous when I live 45 mins walk from work. I resolve to walk to work.

I spend way too much money on food. I also resolve to take packed lunches to work and stop going to the shop and buying stuff every night for something to do when I have perfectly good food the cupboard. I estimated £30 for a haircut once every 6 months, when the situation gets desperate!

£150 council tax includes arrears. I'm thinking about asking them if there's any way I can lower this, but I'm not sure there is. Normal rate, with single adult occupancy is in the region of £80 pm.

I would be grateful for any comments/suggestions/encouragement you may have, particularly whether I should consolidate my debts or not :beer:

MFSaver

Satellite/Cable TV...................... 41

If this is only for cable TV, I'll get rid of this. This is nearly £500 a year, which can go towards your debt. Does this include broadband/telephone, since I noticed that you did not include any amount for those? Nevertheless, get rid of cable TV subscription.

Groceries etc. ......................... 200

That seems pretty high. I spend about 150 pounds myself, and this includes money for snacks and takeaways (which are unnecessary). If I am careful, I can go down to 100 pounds easily without dropping the quality of what I eat. Mind you, I am a heavy eater.

You did say that you will start doing packed lunches, so this amount should drop significantly. Spend some time planning your meals, because buying on the go result in more spending.

Entertainment........................... 30

This figure seems reasonable, but would it be possible to cut back for the time being until you cleared your debt?

pinkpinkuk

Hello, thanks for your help

The £41.00 is for TV, phone and broadband. I try not to make calls from my landline (I only call my parents and ask them to call me back) so I think the phone charges are minimal. I do have a freeview box, but I couldn't get it to work last time. I may try again and if it works use that and cancel the Virgin. I see cheap broadband deals everywhere and aside from line rental the phone bill will be very small. Mebbe I could get rid of the landline altogether =/ Hmmm. That's a thought, though.

Yes I'm dreadful with spending on food. I just go to the shop for something to do pretty much every day. Bad habit, must stop that.

The £30 is stuff I do with my boyfriend, cinema, occassional drinks/renting a film etc. I'm sure I can cut down some on that for the time being. He has a load of DVDs, I'll tell him to bring one round next time rather than renting or going to the cinema

antonia1

Have you considered flat sharing rather than renting on your own? Living with strangers isn't ideal, but it can be half the cost of renting a whole property.

pinkpinkuk

antonia1 wrote: »

Have you considered flat sharing rather than renting on your own? Living with strangers isn't ideal, but it can be half the cost of renting a whole property.

I used to live with a few other people in a house, and it was cheaper. But I do dislike living with other people and really value my independance. I love living in my own flat pretty much more than anything else and tbh it would be the last thing on the list I would sacrifice. My contract expires in March and I will probably have a look round before renewing it to see if I can find anything cheaper, but I really would like to stay living on my own, whether here or elsewhere.

My boyfriend is a mature student living with his parents and realistically has no prospect of being in a financial position to move out for about another 2 years, but I hope that after that point we would move into together, which would lessen the financial burden somewhat

Thanks very much for your help.

scotdebs

Hi PPUK

From looking at your SOA if flat sharing is really a deal breaker for you then in the short term it has to be your food bill and satellite that need to get cut back (in addition to the travel costs) - other option is increasing your income. You dont say what you do for a living and you are obviously a student also but is there anyway you could squeeze in some extra hours of work - if not cana you raid the flat for things to sell on ebay?

In the medium term when are your council tax arrears paid up this will give you an additional £70 per month. Also I would seriously recommend try to find somewhere cheaper come march (and may have knock on effect of cheaper council tax). If you could get somewhere £100 cheaper this together with the extra money when your council tax arrears clear and £40 by cancelling satellite tv would give you an extra £210 PER MONTH - you could clear your overdraft and cc in less than 18 months well before your 30th. Surely making a comprise on the rent for a short period of time would be worth it to be debt free in less that 2 yrs?

Good luck with your journey

pinkpinkuk

scotdebs wrote: »

Hi PPUK

From looking at your SOA if flat sharing is really a deal breaker for you then in the short term it has to be your food bill and satellite that need to get cut back (in addition to the travel costs) - other option is increasing your income. You dont say what you do for a living and you are obviously a student also but is there anyway you could squeeze in some extra hours of work - if not cana you raid the flat for things to sell on ebay?

In the medium term when are your council tax arrears paid up this will give you an additional £70 per month. Also I would seriously recommend try to find somewhere cheaper come march (and may have knock on effect of cheaper council tax). If you could get somewhere £100 cheaper this together with the extra money when your council tax arrears clear and £40 by cancelling satellite tv would give you an extra £210 PER MONTH - you could clear your overdraft and cc in less than 18 months well before your 30th. Surely making a comprise on the rent for a short period of time would be worth it to be debt free in less that 2 yrs?

Good luck with your journey

Hello, thanks for your post I'm not a full-time student, I'm a paralegal (the uni fees are for a Masters course, which I am completing a dissertation for in my spare time). I am on a structured pay system meaning I am on £17k at the moment, but this will be going up to £18k from November, which will be an etra £50ish per month (very welcome!). I have considered getting a second job, maybe some bar work in the evenings or at weekends. Even if its just minimum wage it would certainly help.

My situation is a bit complicated in that I left an abusive relationship almost exactly a year ago, with literally the clothes I was wearing and nothing else. Anything I have has been accumulated in the last year and needless to say its not a lot of stuff! I'm not sure I have very much I could sell, no old clothes, books etc. But I will have a look nonetheless, mebbe I can dig out some stuff

The council tax arrears end at the end of the council tax year, which is Feb/March time I think. It would be a lot easier if I could spread it out over next year as well, but I'm not sure if they would let me do that.

Haha you've inspired me, I'm already having a quick nosey on Rightmove etc to see what I can get for £400 pcm.

lvm

Hey Pinkpink!

You don't seem to overspend in too many areas so you're off to a good start anyway.

With regards to the house sharing...is it a 1 bed place you live in just now? If you had a 2nd bedroom, you could even look for people who wanted a short term lease (3 months or so). I had never ever lived with anyway but since April have been getting lodgers and the extra £350 a month is AMAZING!

Anyway...if you're defo not up for that, I'd say a part time job is definitely the way to go. Loads of retail places are taking on extra staff for Crimbo. You should be able to net an extra £200 a month easily...

Good luck!

pinkpinkuk

Thanks for your reply

Its a one bed flat I'm living in at the moment, over a shop. I know its quie expensive but it is really a bargain for the area. I would like to stay here if possible, but I realise I might have to move to save costs.

I'm going to have a look round for evening work. I reckon if I work say 2 evening shifts per week for minimum wage it would really add up. I live on a road with lots of bars/cafes so I will start looking around for any regular shifts going.

curlytop12

just some thoughts of mine.......

see if you can get a 0% balance transfer credit card,or a lower interest "life of balance" card.getting rid/lessening the interest will help.

get a bike!

really think you can do this in less than 5 years, and without consolidation,you seem a determined,strong person by what you have said,
good luck

pinkpinkuk

Thanks Gem. My current credit card was a 0% for the first 6 months one, but of course after 6 months it went BOOM. I will have a browse. Thank you for all your encouragement =D

Kk I just plucked up the courage to check my credit report. I've never done this as I had imagined it would be a sea of red for some reason.

I have only one red item - says I'm not on the Electoral Roll at my current address, which I'm fairly sure I am, but I'll check with the council tomorrow. Also one yellow from a late payment on my credit card in June *facepalm* I now have a DD set up for this. But generally, wow it doesn't look half bad, once the Electoral issue is sorted.

That's given me a bit of a psychological boost, I'm not such a financial disaster as I think I am.