First Post- please please help!

zootsit81

Hi Everyone

I'm a 25 year old with a considerable amount of debt, having studied for 5 years then gone traveling for 6 months. Here are my debt at present:

Barclay's Graduate overdraft - £1800 (7.94 %/first £1000 0% until June then then a max of £500 allowed at 9.9%)

RBS Graduate Account - £2000 with the same conditions as above at 9.9%

Barclay's graduate loan £3500 outstanding, at 7.9 % APR

M&S card £1500 at £3.9% for life

£2000 borrowed from my parents


Total = £10800


Here are my monthly outgoings:

(Annual Salary £18000 / Monthly = £ 1145)

Rent = £380
Travel = £50
bills =£50
Food = £100
Social = £100
Graduate loan = £115
M&S Credit card = £50
phone = £30
Toiletries = £20
Odds & Sods= £50
Paying back my dad = £50
Paying back RBS Overdraft = £50
Paying back Barclyas overdraft = £50

Total = £1145


the problem is I'm not great at sticking to my budget exactly , maybe a large bill comes etc, or over spend here and there ,and I don't pay back my two overdrafts.

I've kept them this long as the first £1000 on both has been free of interest, but as that will change in June and I have to get them down to £500, I am thinking of consolidating both overdrafts with my loan. I have avoided this in the past as I thought i would pay them off quicker and didn't want to be tied into a loan repayment scheme, but I have now had these debts since graduating in 2004. When I first left uni I moved home for a year to save money, but then went traveling and used all i had saved. I cannot really move back home as i need to stay in London for my job. As a design graduate I am also finding it hard to get an increased salary.

Please can anyone advise whether its a good idea to consolidate the overdrafts into the existing loan? Also if I do consolidate them, but find a better loan offer than Barclay's, can i ay off my existing loan in full with the new one? At the moment i feel like ive got lenders coming at me from all angles for repayment and its making my life hell!

emzig123

zootsit81 wrote:

Hi Everyone

I'm a 25 year old with a considerable amount of debt, having studied for 5 years then gone traveling for 6 months. Here are my debt at present:

Barclay's Graduate overdraft - £1800 (7.94 %/first £1000 0% until June then then a max of £500 allowed at 9.9%)

RBS Graduate Account - £2000 with the same conditions as above at 9.9%

Barclay's graduate loan £3500 outstanding, at 7.9 % APR

M&S card £1500 at £3.9% for life

£2000 borrowed from my parents


Total = £10800


Here are my monthly outgoings:

(Annual Salary £18000 / Monthly = £ 1145)

Rent = £380 Can you get cheaper rent?
Travel = £50 Is it possible to walk or cycle any of the distance to reduce travel costs?
bills =£50 Can you break these down? How much for each?
Food = £100 Get over to Old Style boards and cook from scratch. For one person you can get that down
Social = £100 Unfortunately, this has to be cut. I know it's hard but you need to pay off that OD. Can you drink soft drinks instead of alcohol, or have friends round instead??
Graduate loan = £115
M&S Credit card = £50
phone = £30 If this is mobile, go down to PAYG asap, check you are on the right tarriff for your needs
Toiletries = £20 How much???
Odds & Sods= £50 Exactly what is this for? can you break it down?
Paying back my dad = £50
Paying back RBS Overdraft = £50
Paying back Barclyas overdraft = £50

Total = £1145


the problem is I'm not great at sticking to my budget exactly , maybe a large bill comes etc, or over spend here and there ,and I don't pay back my two overdrafts.

I've kept them this long as the first £1000 on both has been free of interest, but as that will change in June and I have to get them down to £500, I am thinking of consolidating both overdrafts with my loan. I have avoided this in the past as I thought i would pay them off quicker and didn't want to be tied into a loan repayment scheme, but I have now had these debts since graduating in 2004. When I first left uni I moved home for a year to save money, but then went traveling and used all i had saved. I cannot really move back home as i need to stay in London for my job. As a design graduate I am also finding it hard to get an increased salary.

Please can anyone advise whether its a good idea to consolidate the overdrafts into the existing loan? Also if I do consolidate them, but find a better loan offer than Barclay's, can i ay off my existing loan in full with the new one? At the moment i feel like ive got lenders coming at me from all angles for repayment and its making my life hell!

If I were you I wouldn'tconsolidate. It often leads to more problems, use this link https://www.whatsthecost.co.uk/snowball to determine a debt free date to see how long itcould take you to become debt free. Also, keep a spending diary to see where all those pennies are going, it's a real eye opener!! Good luck, and welcome to the boards!

zootsit81

Hi

thanks for the advice, I have looked at snowballing, but unfortunately I have to get the Barclays OD down to £500 overdrawn and the RBS to nothing by June thats 3200 to pay off! There is no way i can pay these off by then, thats why i thought of consolidating them. I know ill pay more in the end, but how else can i pay them off in time?

CLAPTON

your income is low; can you get a part time job, say bar work then that would help you cut down on your socialising budget too

start a spending diary and find out where everything goes,

you can't afford 100 on socialising especially as there are loads of things left out of your budget.

in the short term however, you're not going to save 3,200 by June so you options are :

try to extend the overdrafts even if you have to pay interest

try for anothe LOB CC and transfer the debt

a loan, if you can extend the existing one then its not too bad a rate.

Seaxwyn

Hi zootsit

£3200 is a lot to pay off in just over 3 months but it's not totally impossible - see if you can find the 'Olympic Challenge' thread on here which is full of people who are trying to do just that.

First off, have you got anything you could sell? Old textbooks go well on Amazon. Any clothes, dvds, cds you could ebay?

Could you get an extra job at evenings and/or weekends? If you worked all hours you could go a long way to paying off that debt, and knowing it was only for a limited period would make it bearable.

From my own experience I would advise against consolidating - I've done it four times now and it has never solved the problem!

Good luck.

david_hellier

Hi and welcome,

According to my calculations you have £73.85 per week to spend on yourself, food, clothes, social etc. To prevent further overspend, I suggest you write this amount in a little book on a Monday (say) and keep a track of what you withdraw/spend by subtracting it. I'm afraid you are going to have to be more disciplined in budgetting or you will never be out of debt. Your over all rates are not too bad so consolidating only makes matters worse, so do not bother.

I also suggest you use the RBS current account as this is the more expensive od. So more cash flow in this account will reduce the cost. Do not make any more purchases using CCs and ignore your bank balance. Go only by the book. If you need more money now, get another pt job.

The key is to stop overspend.

Good luck, the figures are as follows:

income weekly monthly
self 1145.00
partner







total 0.00 1145.00 divide by 4.33
£264.23

£264.23 total weekly income

spend weekly monthly
rent/mortgage 380.00
council tax 0.00
elec 0.00
gas 0.00
water 0.00
secured loans 0.00
TV licence 0.00
fines 0.00
travel 50.00
bills 50.00
M+S 50.00
phone 30.00
dad 50.00
rbs od payoff 50.00
barclays od payoff 50.00
g loan 115.00














total 0.00 825.00 divide by 4.33
£190.38

£190.38 total weekly spend

Start= income - spend = £73.85 per week

justmarried06

zootsit81 wrote:

Hi

thanks for the advice, I have looked at snowballing, but unfortunately I have to get the Barclays OD down to £500 overdrawn and the RBS to nothing by June thats 3200 to pay off! There is no way i can pay these off by then, thats why i thought of consolidating them. I know ill pay more in the end, but how else can i pay them off in time?

hi there, welcome to the boards!!

One of the biggest thigns you may be able to do is get ebaying - I know that when I came out of university a couple of years ago I had bought loads of books that I'd probably only used once or twice for reference but still 'had' to have them (can you see where my spending habits came from?! ) so one of my plans is to get them all on ebay in the next few weeks while students are getting their book lists for the next year. There are also other sites that sell academic books only so that may well be worth looking into.

your food bill is also high for one person - I am now feeding two of us on £100 per month and that includes the cat food and toiletries. there are ways and means of cutting costs, check out the Old Style boards for menu ideas and also the Freebies board - often people post about the free samples of toiletries etc and these all help to reduce those bills!!

I honestly think that if you get your head down and work at it you can clear those overdrafts - to echo others too the socialising needs to come down. your friends will understand and may even take a leaf from your book

HTH

JM xx

ktb

Hi zootsit81...

It is unlikely that anyone on here will say to you that consolidation is the way forward i'm afraid. The advice you get here is far less 'quick fix' and over all far more effective long term. If you are prepared to make some real changes you can avoid ending up on here in a couple of years time with twice as much debt as you have now!

I can highly reccommend doing a spending diary... carry a note book or something similar around with you and every time you buy something, whther it costs 20p or £20 make a note of it. This really will highlight the places that you are leaking money and give you the power to control your spending, stop you wasting your hard earned money and start throwing more at paying off your debts.

zootsit81

Hi

Thanks for all the great advice. Im going to start looking what I can sell on ebay! And Ill make a big effort to cut down food & social bills. Ive also just changed my phone bill to a cheaper tarrif!

At the moment interest charges on both overdrafts are about £10 a month (I've just checked- they're both 9.9% after the base rate increased.)- add this to my £20 interest pm from my loan and I am paying £40pm in interest. This is why i thought consolidation would be better- although ill be paying interest on a loan, the rate is only 7.9% . I also asked RBS if i could take up a loan with them, and they said they can offer me a flexible one, which allows me to pay extra whenever I like (which i can't do with Barclays) and if I pay it off early I will be refunded for the interest that would have been accrued over the original time frame (sounds a bit too good -so I've asked for it in writing!)Any thoughts?

I guess it comes down to whether I can pay it off quicker as it is by budgeting, or i consolidate the overdrafts with my loan and have a structured payment say 3 years, costing a little more. Ive been trying to budget for the last 3 years but im not getting anywhere!

I dont have time for a part time job at the moment - I'm spending my evenings and weekends working on my portfolio in an effort to get a better job. I aim to have this done by April so i can look for a part time job then.

I have asked Barclays and RBS to give me a quote for a loan - ill post it here when they arrive to see how much interest i would have to pay


thanks again! either way this has spurred me to watch my budget and improve as much as i can

Seaxwyn

HI zootsit

A truly flexible loan at a lower rate of interest than you are paying now doesn't sound so bad, if you are careful not to run up any further overdraft or credit card debt once the immediate pressure is off. I'll be interested to see your offer from RBOS as I have never found a loan that was very flexible.

Good luck