Need help with Debt and low income

Isak

Hi

Love this WEBSITE!!!

Q: We are a family of 3 and my wife is expecting a second child in Feb 2012! Im currently working and our earnings for the combined household is £1700pm. My wife is a housewife and my little boy is 4 years old. My out goings is £1400pm incl Bills and monthly Loan. Im currently getting child support of £281pm for Child Tax Credits and Child Benefits.

BUT

This year i had a huge expense of a car that broken down and service which took me into overdraft on my credit card and current account of total -£1500!!

Can you advise me or steer me in the right direction as im desperate for help!!

redbull5

Hi Isak. If you have a surplus at the end of each month then that should go straight towards the credit card, thats priority. And get saving for number 2 whos on it way, keep exploring the forum and youll discover what proper saving is all about.

Tixy

Hi Isak

Have you worked out a detailed budget - and do you have £300 spare a month (£1700 income, less £1400 outgoings)? If so you should be able to reduce that debt pretty quickly. If you don't have £300 spare a month then you might need to do a more detailed budget, and keep a spending diary to see where else you are spending money that isn't on your budget. Maybe complete the statement of affairs calculator and post the results on here - as people will be able to suggest possible savings you can make/things you can get cheaper.

Make sure your new budget includes a monthly estimate for car servicing, new tyres etc. Try to work out an annual estimate then put 1/12 into your monthly budget and try to put that amount into a savings account each month. That way you should hopefully not end up in the same position again.

Do you have debt on both your current account (overdraft) and your credit card? If so which is costing you the most each month? what are the APRs on each?