New DFW Member £13k Debt!

hardcore_since84

Hi, I’ve been a member of this board for a number of months now and Love it. It’s a huge resource of information on dealing with debt and has been beneficial to me in lots of ways. After spending a few minutes on here I always leave feeling empowered and motivated to cut my debt. I’ve had flickers of inspiration to deal with debt in the past but my official light bulb date was 01/01/2007 and I am now very committed to getting it all paid off.

AIM: To be debt free and Save £10k to Travel the World in January 2010

I just wanted to introduce myself here and let you know I’ve also decided to write my own dfw diary in a separate thread (coming soon) and I really look forward to hearing all of your feedback and advice on that.

I hope overtime I can gain entry in to your prestigious Official DFW Nerd Club.

A bit of Background on how I got into approximately £13k worth of debt…
From the time when I was 19 up until now (I am now 22) I always took advantage of credit from lots of different sources; I had several credit cards, Car finance for a New Mini and personal loans. All of which I would make the minimum repayments to every month (sometimes paying off one credit card with another). I’d never turn down an expensive night out; I’d go on quite expensive holidays twice a year, satisfy my trainer and designer label fetish and when I was bored I surfed eBay and bought lots of stuff I didn’t need all the while using credit cards to pay for these. Being young and living at home I didn’t give too much thought to how much trouble I was getting myself in.

Since that time I have now cancelled all of my credit cards and got a consolidation loan with hsbc @ 11.9%. I sold my new mini, paid off the outstanding finance and bought a much cheaper Peugeot 306! I now also rent a house with a work colleague.

I just really want to throw my self into this so here goes:

Money Owed
hsbc loan: £11155 @ 11.9%
hsbc overdraft: £800
Natwest overdraft: £500
IKEA store card: £142 @ 12.9%
Girlfriend: £340

TOATL DEBT as of 22/01/07= £12937

I earn £1440 per month.

My Monthly outgoings

Hsbc loan £268
Rent & Bills £280
Broadband £10
Mobile £35 (usually higher than this)
AA £16
Petrol £180
Car Insurance £ 88.00
Groceries £180
GYM £26.50

I have been looking into loans with better rates and facilities (I want to increase my monthly payments thus reducing the time period + have the option to pay more off when it's possible) as I am aware that there are currently quite a few low rate loans out there. Unfortunately I have just been turned down for a consolidation loan by zorpa and am concerned that applying for too much credit at the moment would have a negative impact on my credit rating.

Can you advise me on how to reduce these outgoings and help to pay off my £13k debt?

I’d love to hear what you all have to say, please post a message or PM me thanks very much.

ktb

Hiya hardcore_since84

I'll be very interested to read your diary as I will be saving up to go to do a snowboard season after my debt is paid off.

I have to say that although I have only been using this site a couple of months I cant say how invaluable the advice to do a full SOA and spending diary have been. Obviously the advice that is given isn't always what you want to hear (i'm going to have to sell my much loved car ) but having that end goal in mind is keeping me well on the straight and narrow. If you are really serious about paying off your debt then forget about ever consolidating and just work out how to live within your means - there are so many inspiring tales on here about people managing to do that and really freeing themselves from the debt/consolidation cycle.

I really wish you all the best and will check out your diary when you start it.

sured

:hello: welcome aboard,

well done for posting soa,

you should get all the advice you need here,

Annie_Fanny

Hey there

Well done on getting stuck into the debts!

A few hints and suggestions:

FIRSTLY PLEASE DON'T ASSUME THAT CONSOLIDATION LOANS ARE THE WAY TO GO. THEY ARE OFTEN A BIG FAT RIP-OFF!

Apply for your credit report - they cost £2 each from Equifax and Experian.

What's the aprs on the overdrafts? Don't assume they don't - they are still a debt that could be costing you money.

How about getting more income? Can you do extra hours at work or get a part time job?

Ditch the gym - go running - or cycle to work etc...

Your mobile - is it on contract - don't forget to haggle, research deals and wittle them down!

You can do this - make it a mission!

Annie

medman

Hi HC84

Welcome and well done.....so far

As above ditch the gym and go running, or join the TA where you get paid for using the gym!! You also get paid for attendance, camps etc.....but you might have to deploy at some stage!! :cool2: But hey you're hardcore since 84!

Petrol and groceries looks expensive....any way you can cut down. Check out the old style board.

You can look forward to your DF moment, whan all the money that the banks take, will be yours to save up for those holidays.

Good luck and keep posting

MM:wave:

hardcore_since84

Hi thanks for all of your replies. You're making me feel very welcome.

My dfw diary should be up within 2 days and will have quite a lot of info on what I've done this last month.

Just a couple of quick answers,

Unfortunately I don't have time to get a part time job or an extra income as I work 4 days a week for a construction firm and go to university 1 day a week. I'm also in a long distance relationship and only get to see my gf at weekends. Weeknights are usually taken up with coursework, trying to get fit or skating. + I always assumed I would get taxed heavily for having another job?

Im gonna try and sell stuff on ebay to earn some extra cash. And look into matched betting as well.

Yes I have officially cancelled my gym membership to total fitness. I now go running with my brother and will use the gym facilities at my college for £2.50 a session.

Current Mobile contract ends in march which is when I can cancel it. I've researched into various deals and it turns out that my best option would be orange payg. I've ordered new sims for me and my gf.

Petrol is expensive as I have quite a thirsty car. May think about changing it for a diesel in the future but for now I'm still very happy with it. Although trying to cut down on using it so much.

I didnt think £45 a week for 1 persons shopping was too bad. what are you guys paying?

What do I do with the experian and equifax reports when I have them?

cheers

CLAPTON

best to work out a full SOA..the current one seems a little light..

firstly can you increase income over the holiday periods especially summer?

on the spending side anything spent on car tax/ servicing/ MOT / allowance for repairs, anything on optical/dental/medical, anything on socialising, magazine/newspapers, haircuts, every have a holiday/ weekend away, takeaway , any presents/xmas costs , any clothes / running shoes / sport kit etc ..worth thinking about

important to add these because it shows the real picture of whether you actually spend less than your income or vice versa.

your car probaly costs you 25% of your income...do you really need it?

try keeping a spending diary to see where everything actually goes and go through old bank a/c and think back on last year and see where annual and oneoff spends have gone.

hardcore_since84

Hi, what constitutes a full soa. let me know and I'll post one up here.

Increasing income over summer period? what do you suggest? I'll be working 5 days a week from 8 till 5.

Car tax, I will have to pay for thats £180.
I have a friend who can do an mot for £22.
An annual CAR service costs £59 and I have an excellent deal from the aa on car repair cover- basically all mechanical repairs are paid for (I'll talk more in depth about this in my dfw diary).
I cut my own hair (grade 0 once a week).
I had laser eye surgery just over a year ago so optical bills aren't much of an issue.
Only buy 2 mags a month at the cost of £6
I'm saving up for a 2 week holiday in LA this july and I need about £1k for that + £407 for the flight

I need to work out a socialising / spending budget.

I 110% need my car for work it is a requirement. Although I am looking into was to reduce my motoring costs.

now I've got a spending diary as well as a diet diary to do haha

CLAPTON

a full SoA is simply a budget that shows everything that you will spend over the next 12 months, divided by 12 to show a monthly average.


so,. you see your car tax of 180, either you save up £15 each month (i.e. 180/12 ) and save it in a savings account or when the time comes to pay the tax your only option is to increase your debt by paying on credit card.

also if you dont do that, you are liable to kid yourself your doing better financially than you really are.

and that holiday in LA for 1407 in 6 months..you need to save £234 each and every month between now and July.

and one last thing .. add up the spending total so you can compare it with the income ..

Annie_Fanny

hardcore_since84 wrote:

Hi thanks for all of your replies. You're making me feel very welcome.

My dfw diary should be up within 2 days and will have quite a lot of info on what I've done this last month.

Just a couple of quick answers,

Unfortunately I don't have time to get a part time job or an extra income as I work 4 days a week for a construction firm and go to university 1 day a week. I'm also in a long distance relationship and only get to see my gf at weekends. Weeknights are usually taken up with coursework, trying to get fit or skating. + I always assumed I would get taxed heavily for having another job?

Im gonna try and sell stuff on ebay to earn some extra cash. And look into matched betting as well.

Yes I have officially cancelled my gym membership to total fitness. I now go running with my brother and will use the gym facilities at my college for £2.50 a session.

Current Mobile contract ends in march which is when I can cancel it. I've researched into various deals and it turns out that my best option would be orange payg. I've ordered new sims for me and my gf.

Petrol is expensive as I have quite a thirsty car. May think about changing it for a diesel in the future but for now I'm still very happy with it. Although trying to cut down on using it so much.

I didnt think £45 a week for 1 persons shopping was too bad. what are you guys paying?

What do I do with the experian and equifax reports when I have them?

cheers

"I always assumed I would get taxed heavily for having another job?"
This is often the first thing people say when you suggest getting another job. Yes you will be taxed BUT it will be at whatever tax rate you are paying at your week day job. So I work full time and have a weekend job. I don't get to see my partner very much (although we do live in the same house at the weekends) but I sat my partner down and explained the situation that I was sick of being in debt and that I was doing this for our future. My partner understood what I had to do. I bring home an extra £200 a month (after tax) which is a welcome addition. I don't see being taxed as an excuse not to work if you see what I mean. £200 is £200 and is helping massively to pay off the dreaded debts. Maybe i am a sicko but to me there is nothing better then knowing you are doing all you can to get yourself financially sorted.

You say you were turned down for a consolidation loan so getting your credits reports is a good way to check that everything is in order.

For full information on posting a 'Statement of Affairs' (SOA) have a luck here:
http://forums.moneysavingexpert.com/showthread.html?t=107280

For information on setting up a budget look here. (Fantastic spreadsheet - ok not the most exciting thing but hey!):
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1089226742,17582,

Also I know this is harsh but how will you fund your holiday to LA. I think you need to seriously consider this as it is, I presume, going to put you another £1500+ in debt (ouch!)

Good luck!

hardcore_since84

Annie_Fanny wrote:

"I always assumed I would get taxed heavily for having another job?"
This is often the first thing people say when you suggest getting another job. Yes you will be taxed BUT it will be at whatever tax rate you are paying at your week day job. So I work full time and have a weekend job. I don't get to see my partner very much (although we do live in the same house at the weekends) but I sat my partner down and explained the situation that I was sick of being in debt and that I was doing this for our future. My partner understood what I had to do. I bring home an extra £200 a month (after tax) which is a welcome addition. I don't see being taxed as an excuse not to work if you see what I mean. £200 is £200 and is helping massively to pay off the dreaded debts. Maybe i am a sicko but to me there is nothing better then knowing you are doing all you can to get yourself financially sorted.

You say you were turned down for a consolidation loan so getting your credits reports is a good way to check that everything is in order.

For full information on posting a 'Statement of Affairs' (SOA) have a luck here:
http://forums.moneysavingexpert.com/showthread.html?t=107280

For information on setting up a budget look here. (Fantastic spreadsheet - ok not the most exciting thing but hey!):
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1089226742,17582,

Also I know this is harsh but how will you fund your holiday to LA. I think you need to seriously consider this as it is, I presume, going to put you another £1500+ in debt (ouch!)

Good luck!

I may be able to get a weekend job sometime in the not too distant future as my girlfriend is actually moving to my area(so will see her in the week). Can I ask what you do? how many hours a week? is it minimum wage? do you not go crazy working 7days a week? I know after just doing 5 I need a break.

For now to try and earn some extra cash I'm gonna sell stuff on ebay and perhaps try some matched betting.

I'll definately have a look at my credit reports tonight

I've done a bank charge reclaim for £948 and hsbc have already offered me £800. But I'm pushing for the full amout. This will cover the flight to LA, The money I owe to my gf and the balance of the ikea store card. I'll need to save approximately £1k between now and then for LA