Trying to finally get a grip

dfw2012_2

Hi,

Trying to get sorted before I get in another panic about money. I've never been particularly good with controlling expenses and have racked up £7000 of credit card debt (albeit at 0%) over the last 2 years or so. The Virgin card debt is £4500 at 0% til Sept, the Barclaycard debt is £2500 at 0% til July. There is PPI on both cards and I'm paying £50 towards both.

There is no way I will be able to pay both these off in that time barring a major change in habits. I have improved and at least stabilised in the last few months, mostly breaking even or coming out a few hundred quid ahead a month. And I intend to continue crunching down on expenditure. My main outgoing after rent seems to be food. I don't think my lifestyle could be said to be at all extravagant - it seems I am just putting my income to inefficient use. Regardless, I'm willing to make more sacrifices to get rid of this albatross.

I don't think I can put that much pressure on myself to change that much that quickly but the debt is stressing me out.

Seriously tempted to try to get a consolidation loan of £7000 or so. CreditExpert claims my credit rating is excellent. I've only ever missed one payment AFAIR and that was over three years ago. However, when I use their loan search tool it can't seem to find any standard loan providers to offer. Nationwide offered a quote of 13% which seems a lot higher than the rates quoted on the site here (6 or 7%). Zopa however quoted me a rate of 8% for £7000 over 5 years (£150 a month payment). This seems quite managable.

I'm just worried about income and stuff with the economy shaky so I'd rather have a solid low-pressure plan in place rather than gambling on tarting my debt again for another 18 months and stressing myself out. Any suggestions? Here is my SOA, although it is missing some expenditure fields it seems, as my balance rarely improves by more than a few hundred a month.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1850
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1850

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 555
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 12.1
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 20
Petrol/diesel........................... 50
Road tax................................ 10
Car Insurance........................... 40
Car maintenance (including MOT)......... 50
Car parking............................. 2
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 12
Life assurance ......................... 0
Other insurance......................... 120
Presents (birthday, christmas etc)...... 5
Haircuts................................ 8
Entertainment........................... 5
Holiday................................. 0
Emergency fund.......................... 10
Total monthly expenses.................. 1334.1


Assets
Cash.................................... 1000
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 1500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard Visa...............2500......50........0
Virgin Mastercard..............4500......50........0
Total unsecured debts..........7000......100.......-


Monthly Budget Summary
Total monthly income.................... 1,850
Expenses (including HP & secured debts). 1,334.1
Available for debt repayments........... 515.9
Monthly UNsecured debt repayments....... 100
Amount left after debt repayments....... 415.9

Personal Balance Sheet Summary
Total assets (things you own)........... 1,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -7,000
Net Assets.............................. -5,500

Gonna have a look at my statements today and get a more accurate breakdown, but thought I'd get the ball rolling early today before breakfast

hp48910

Can you get rid of the PPI?

debtfreewannabe321

hi dfw well done on posting up the soa, the first thing i would do is start a spending diary (think you can download apps too for your phone) and note down everything you buy. You'll soon find out where your spare money goes to...Also £400 for grocery? And it's just you? You need to cut that down and you'll have more money for debt repayment. I would suggest halving it to £200 to start with and then whittling it down even more once you've got the hang of meal planning etc.

What is the 'other insurance' for?

Also do yu have £1000 in savings? I'd throw it straight at your debt. As for the ppi there are tonnes of threads around showing how to claim that back

dfw

debtfreewannabe321

sorry just noticed you have 0% till july....don't get a consolodation then! you'll be paying interest when you aren't at the moment...Try and tackle the one that finishes in july. If you would rather save it in your bank and pay a lump sum before the 0% ends do that, or if you think you can't trust yourself with the savings put it straight on the card.

dfw2012_2

Thanks for the warm welcome guys...

I can get rid of the PPI, but am worried that I actually need it.. Regardless, perhaps it is better to go with another PPI provider?

The Barclaycard debt is from Egg originally so that's probably favourable in terms of PPI reclaims. I've already done a DPA request to Egg to get all my statements, contracts etc. This has been transferred to Barclaycard who seem to have so far sent me a long printout of statements and a contract statement (I believe).

The other insurance is £60 for Pru Health, and £60 for iProtect Income Protection up to £1500 a month.

I will really try to cut down my grocery costs. I do eat a lot, but also waste a lot, which I'm not proud of. £200 sounds quite ambitious but I'm sure it's possible.

dfw2012_2

debtfreewannabe321 wrote: »

sorry just noticed you have 0% till july....don't get a consolodation then! you'll be paying interest when you aren't at the moment...Try and tackle the one that finishes in july. If you would rather save it in your bank and pay a lump sum before the 0% ends do that, or if you think you can't trust yourself with the savings put it straight on the card.

It does seem the sensible thing on the face of it to just pay off what I can and wait til July to see how the land lies - but with a lack of job security, the prospect of having to pay a high interest credit card debt scares me.

I guess having some sort of PPI should mitigate against that (if it actually works). At least, I should have the iProtect stuff.

Is consolidation at 8% such a terrible idea? I know this requires strong discipline to make work but a £150 monthly payment does feel pretty realistic. I am already paying £100 a month in credit card fees.

Sorry, am mulling things over - I need to get this stuff clear in my head.

psychopathbabble

£200 sounds ambitious? There are people feeding families of 4 for £100!

A spending diary is critical, as it seems you don't know where your money is going and until you figure it out, you won't be able to throw it at the debt.

What is iProtect Income Protection? Is not that the same kind of thing as PPI? Halicarp no longer sell PPI at all for any products so that shows how useless it is, I'd get it cancelled and reclaimed asap.

You have £400 remaining but need to add council tax, gas and electricity, internet, landline phone. Unless these are included in your rent?

Don't budget for clothes unless entirely necessary. What is the £15 prescriptions etc for? If it's a regular presciption, you can buy prescription cards (i think for 1 year or 3 months at a time) which means you get unlimited free prescriptions which could save you money.

Don't consolidate, even once you have completed your SOA, you are in a good position to get this debt reduced with a bit of effort on your part to significantly reduce your grocery bill. A bit of organisation and meal planning can go a long way... for a long time my budget was £15 per week and I managed to stick to it.

If that £1k cash is in savings, get it on the barclaycard, already you have nearly halved it and chucking a minimum of £200 per month at it will get it paid off in 8 months!

Join some of the various challenges, payment a day, debt free by christmas 2012, sealed pot challenge, no spend days etc etc to give you ideas and help keep you motivated to stop spending and start reducing debt.

You have made the biggest step in coming on here and posting your SOA admitting you need help. Now it's easy Good luck and you can do it!

psychopathbabble

dfw2012 wrote: »

It does seem the sensible thing on the face of it to just pay off what I can and wait til July to see how the land lies - but with a lack of job security, the prospect of having to pay a high interest credit card debt scares me.

I guess having some sort of PPI should mitigate against that (if it actually works). At least, I should have the iProtect stuff.

Is consolidation at 8% such a terrible idea? I know this requires strong discipline to make work but a £150 monthly payment does feel pretty realistic. I am already paying £100 a month in credit card fees.

Sorry, am mulling things over - I need to get this stuff clear in my head.

Loan is advertised at 8% but it's not a guaranteed rate, it could end up double or triple that. Wait until your 0% is almost finished and see what position you are in then.

The biggest trouble with consolidation is if you then go on to rack up your credit cards again.... many people have done that myself included and I ended up with £13k in total!

dfw2012_2

psychopathbabble wrote: »

£200 sounds ambitious? There are people feeding families of 4 for £100!

A spending diary is critical, as it seems you don't know where your money is going and until you figure it out, you won't be able to throw it at the debt.

What is iProtect Income Protection? Is not that the same kind of thing as PPI?

Not quite, it's basically ASU (Accident Sickness and Unemployment) insurance and seems to have a reasonable reputation.

psychopathbabble wrote: »

Halicarp no longer sell PPI at all for any products so that shows how useless it is, I'd get it cancelled and reclaimed asap.

You have £400 remaining but need to add council tax, gas and electricity, internet, landline phone. Unless these are included in your rent?

Included...

psychopathbabble wrote: »

Don't budget for clothes unless entirely necessary.

I think that quote was an overestimate but I'll work it out. I have a large collection of tattered jeans and a lot of my shirts are years old

psychopathbabble wrote: »

What is the £15 prescriptions etc for? If it's a regular presciption, you can buy prescription cards (i think for 1 year or 3 months at a time) which means you get unlimited free prescriptions which could save you money.

Antidepressants and IBS meds.. Thanks for the tip, I"ll check that out.

psychopathbabble wrote: »

Don't consolidate, even once you have completed your SOA, you are in a good position to get this debt reduced with a bit of effort on your part to significantly reduce your grocery bill. A bit of organisation and meal planning can go a long way... for a long time my budget was £15 per week and I managed to stick to it.

If that £1k cash is in savings, get it on the barclaycard, already you have nearly halved it and chucking a minimum of £200 per month at it will get it paid off in 8 months!

Join some of the various challenges, payment a day, debt free by christmas 2012, sealed pot challenge, no spend days etc etc to give you ideas and help keep you motivated to stop spending and start reducing debt.

You have made the biggest step in coming on here and posting your SOA admitting you need help. Now it's easy Good luck and you can do it!

Many thanks PB I needed the pep talk

psychopathbabble

dfw2012 wrote: »

Not quite, it's basically ASU (Accident Sickness and Unemployment) insurance and seems to have a reasonable reputation.


Included...


Antidepressants and IBS meds.. Thanks for the tip, I"ll check that out.


Many thanks PB I needed the pep talk

Hope you don't think I'm being harsh... I felt a little bit guilty when I posted it I know how hard it is to face up to it, I spent years thinking I couldn't pay it off so why bother trying, but it's surprising how much you can pay off when you put your mind to it The changes you need to make aren't for long, just to get rid of debt, but you will become addicted... I promise!

I was on anti-depressants but hated paying for them (i went cold turkey on them which I also don't advise!), the pre payment card is £30 for 3 months or £104 for a year so it's more upfront but worth it over time. You can find info on the link below:

https://apps.nhsbsa.nhs.uk/ppcwebsales/

ETA: I think your first personal challenge is to get the Barcl0ycard paid off before it runs out. It's definitely more than achievable

dfw2012_2

psychopathbabble wrote: »

Hope you don't think I'm being harsh... I felt a little bit guilty when I posted it I know how hard it is to face up to it, I spent years thinking I couldn't pay it off so why bother trying, but it's surprising how much you can pay off when you put your mind to it The changes you need to make aren't for long, just to get rid of debt, but you will become addicted... I promise!

I was on anti-depressants but hated paying for them (i went cold turkey on them which I also don't advise!), the pre payment card is £30 for 3 months or £104 for a year so it's more upfront but worth it over time. You can find info on the link below:



ETA: I think your first personal challenge is to get the Barcl0ycard paid off before it runs out. It's definitely more than achievable

Cheers PPB