Independant Financial Advisor?

Pinkpenguin

Hi all,

I'm new to this so please be gentle! Im 25 and after 4 years at uni studying Law I have come away with crippling debts. I have two loans, one of which is a Regular Student Loan which I am paying a nominal amount back on, the other a Professional Studies Loan which I am paying a staggering £365 a month back on. I live on my own but fortunately in a house that my Father owns so I dont have to pay rent, but the bills alone are bad enough.

My wage just isnt enough to pay this loan every month with bills and then living expenses on top. I have also taken out two credit cards which I have maxed out, making minimum payments of £40 each a month.

My Credit Score is really bad now because I have missed several payments on my loan and countless times on my credit cards. I am in my Overdraft and am always going over this limit too.

I need to sort out my finances but dont know where to start. Ive been to the bank already and asked about getting a mortgage to pay off my loan but a) I'm not earning enough to get a mortgage on my own (my Father is over 60 so cannot get one with him either) and b) they say I have to pay off my loan before I can even get a mortgage.

Ive been thinking about enlisting the help of an Independant Financial Advisor - does anyone here have any recommendations? I live in Devon.

I would be really grateful for any advice you can offer, I am getting really desperate now.

Thanks in advance

Lil x

antonia1

Hi Pinkpenguin,

I can't offer any recommendations on a financial advisor, but I imagine you'd have to have money to pay the advisor anyway. You really should get in touch with one of the free debt advice charities (such as CCCS) and they can help. In the mean time, try posting an SOA on here and see if any of these nice people can help cut your costs.

Tixy

You need to contact one of the free debt advice charities, not an IFA or anyone who will charge you fees. See this link IMPORTANT - Where to seek professional impartial advice about your debts.

Then it would be sensible to work out a detailed statement of affairs using this link http://www.makesenseofcards.com/soacalc.html to see how much you have coming in and going out and how much your debt repayments are. If you can post the results on here people should be able to offer advice on possible debt solutions and also on whether there are areas you can get things cheaper/make your bills less/make savings etc.

The info on the statement of affairs will help the debt charity make suggestions to you as well.

A mortgage isn't going to be possible if you don't own a property - even if your credit history was good. But once we can see more about your finances there will definitely be options and advice for you.

lemonpopsicle

You don't need an independent financial advisor- you just need this site and the fab people on here, (oh and possibly CCCS). Post your SOA (statement of affairs) and someone will be along to give you advice.:)

glasgowdan

You also need to get out of the habit of looking for more financial commitments. If you don't have the money for something then you can't have it (mortgage, IFA services). You also view getting a mortgage as a solution but the fact is this costs even more, so all of these sorts of decisions make life MORE expensive.

I think you need to sort this out asap, before you get a bit older. It really sounds like bad habits to me sorry.

Knuckle down and spend less money each day, shopping or living expenses. every spare bit of cash you can should be treated carefully with the aim of getting this debt sorted out, and also look at work - are you in a career role right now or a stop-gap job? If the latter then work like crazy to get a more suitable job. Really hard work but you need it!

tallyhoh

Financial advisers are there to find ways of investing money etc, if you are after a broker to get you a loan, its a really bad idea. Not only will you be borrowing more money it will be at a high rate of interest, probably more than you are paying now.

Start by posting your SOA using the sticky at the top of this forum for suggestions, you can also see for yourself where to cut back.

Pinkpenguin

Hi,

Thank you all so much for your advice already, it really is appreciated. I have completed my SOA - posted below - all comments welcome!! I have increased the amount for presents because Christmas coming up (probably wouldnt spend that much every month) and also for Entertainment because of xmas parties etc (normally would spend half that amount).

In answer to your question about my job Glasgowdan, I am working in the field that I want to qualify in but its not my Ideal job - as you will see my wage isnt all that bad for my age.

Thank you guys.

Statement of Affairs and Personal Balance Sheet

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details[/b]
Monthly income after tax................ 1343.59
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1343.59
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 27
Gas..................................... 0
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 53.06
TV Licence.............................. 12.12
Satellite/Cable TV...................... 39.25
Internet Services....................... 22.2
Groceries etc. ......................... 100
Clothing................................ 70
Petrol/diesel........................... 50
Road tax................................ 0
Car Insurance........................... 58
Car maintenance (including MOT)......... 20
Car parking............................. 5
Other travel............................ 0
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)...... 70
Haircuts................................ 30
Entertainment........................... 100
Holiday................................. 20
Emergency fund.......................... 0
Total monthly expenses.................. 711.63

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan ..........................22950.....363.......0
Tesco CC.......................2000......45........0
Natwest........................1800......45........0
Total unsecured debts..........26750.....453.......-

Monthly Budget Summary
Total monthly income.................... 1,343.59
Expenses (including HP & secured debts). 711.63
Available for debt repayments........... 631.96
Monthly UNsecured debt repayments....... 453
Amount left after debt repayments....... 178.96
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -26,750
Net Assets.............................. -25,750

mustmakealist

Well done on posting your SOA. I've made a couple of comments below

Statement of Affairs and Personal Balance Sheet

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details[/b]
Monthly income after tax................ 1343.59
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1343.59
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 27
Gas..................................... 0
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 53.06 - Can you reduce this? See if you can downgrade your package until your contract is up
TV Licence.............................. 12.12
Satellite/Cable TV...................... 39.25 You might have to give this up or downgrade
Internet Services....................... 22.2 Can you get this cheaper? I believe some ISPs are as little as £5 per month or get it included as part of cable if you are not getting rid of that
Groceries etc. ......................... 100
Clothing................................ 70 - even with Chritsmas coming up I think you might need to reduce this
Petrol/diesel........................... 50
Road tax................................ 0 Do you not pay anything?
Car Insurance........................... 58
Car maintenance (including MOT)......... 20
Car parking............................. 5
Other travel............................ 0
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)...... 70 Try making your own or cutting back every little bit will help
Haircuts................................ 30 Try a cheaper salon you might be pleasantly surprised
Entertainment........................... 100 I know that christmas is coming up but try to reduce this. Have a fun night in rather than go out. What dies it actually cover?
Holiday................................. 20 I can't see this in your assets so where is it?
Emergency fund.......................... 0
Total monthly expenses.................. 711.63

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan ..........................22950.....363.......0
Tesco CC.......................2000......45........0
Natwest........................1800......45........0
Total unsecured debts..........26750.....453.......- Can you give the APR for these ?

Monthly Budget Summary
Total monthly income.................... 1,343.59
Expenses (including HP & secured debts). 711.63
Available for debt repayments........... 631.96
Monthly UNsecured debt repayments....... 453
Amount left after debt repayments....... 178.96 Do you really have this?
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -26,750
Net Assets.............................. -25,750

The good news is that you should have some money left over each month, but I suspect that like most of us you don't really have this. Your grocery costs are really low have you included everything or is the £178.96 eaten up by popping out to get the odd pint of milk and loaf of bread. By cutting down on some of the areas above you should be able to free up a bit more. A spending diary might help. There's probably one that you can get for yout phone.

It will not be an easy ride but in the end you are in charge of the choices you make. If it is more important to you to get on top of your loan and debts than to have the new clothes then that is the choice you will need to make. You are the only one that can decide.

Good luck

Tixy

Hi

Well at the moment your SoA looks like you have enough money to pay off your minimums and an extra £178 towards your debts each month. I'm guessing you find that this isn't the case so I would strongly suggest a spending diary of every single thing you spend for a month or 2 to work out where else your money is going thats not listed on your statement of affairs.

I've put a few suggestions for what you might want to look at reducing and what also might be missing below.

Pinkpenguin wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details[/b]
Monthly income after tax................ 1343.59
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1343.59
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0 who is paying this? Dad or you? If you live alone in the property are you claiming the 25% discount?
Electricity............................. 27
Gas..................................... 0
Oil..................................... 0
Water rates............................. 35 is this on a meter or unmeasured? If its not on a meter research if getting one would be cheaper (it should be quite a bit cheaper), if you are on a meter then you need to do a leak check (details on water company website) and read up on reducing your water use.
Telephone (land line)................... 0
Mobile phone............................ 53.06 are you in contract? if so see if you can drop a tariff, if not shop around for a cheaper contract.
TV Licence.............................. 12.12
Satellite/Cable TV...................... 39.25 consider ditching or reducing to basic package.
Internet Services....................... 22.2 look for a cheaper provider - or combine with tv package.
Groceries etc. ......................... 100
Clothing................................ 70 work on reducing this down, where what you have and sell what you don't wear.
Petrol/diesel........................... 50 you don't seem to be doing a lot of miles - is a car essential?
Road tax................................ 0 ? budget 1/12 of annual cost
Car Insurance........................... 58 do you shop around at renewal time? use the tips on this site next time you renew to see if you can reduce a bit.
Car maintenance (including MOT)......... 20
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 does Dad pay this?
Contents insurance...................... 0 does Dad pay this? if not then consider getting some for yourself
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 70 I understand about xmas, but after that work out a realistic annual budget and try to stash 1/12 of that each month in a seperate account
Haircuts................................ 30 could you go slightly less often? or consider a cheaper hairdresser?
Entertainment........................... 100 again after xmas try to reduce this
Holiday................................. 20 are you putting this aside? do you have a holiday booked? If not I would focus on paying off your debts first.
Emergency fund.......................... 0
Total monthly expenses.................. 711.63

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan ..........................22950.....363.......0
Tesco CC.......................2000......45........0
Natwest........................1800......45........0
Total unsecured debts..........26750.....453.......-

Monthly Budget Summary
Total monthly income.................... 1,343.59
Expenses (including HP & secured debts). 711.63
Available for debt repayments........... 631.96
Monthly UNsecured debt repayments....... 453
Amount left after debt repayments....... 178.96
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -26,750
Net Assets.............................. -25,750

Find out the APRs on all your debts so you know which to focus on paying off first (the most expensive one!).

The issue is that not only must you be spending £178 more than you've listed - but that you've also maxed out the cards. Over how long have you built up that £3800 of card debt? If its over a year then you have actually been spending almost £500 a month more than you have listed. Have you cut the cards up now?

You haven't mentioned an overdraft - do you have one? if you do then you need to include that on the list of debts.

Looking at the above you do earn enough to cover the bills that you pay and your living expenses reasonably comfortably, its just a case of getting on top of your spending and trying to stick to a budget. The spending diary should be a big help with that so try starting it today.

Good luck.