Desperate to be debt-free, but where to start?

holsinthesun

ok I've been struggling to be debt-free for as long as I care to remember, but I'm desperate to reach my goal now.
i earn a good wage but £800 a month gets spent on loans and minimum payments. i've been trying to live off a £60 budget, which would leave me £200 a month to pay towards my debts.
My question really is what should i concentrate on first? At the moment it's my overdraft, but I don't know if i should be tackling the credit cards, with the obvious higher interest?
Heres a summary (gulp) of whats owed where....
Overdraft £3100
NW Credit card £1800
Tesco Credit card £2100
MBNA Credit card £3800
Argos Store card £1220
Natwest loan £10000 (4yrs left)
Zopa loan £1000 (10ths left - yeah!)
Nationwide loan £6000 (2yrs left)

What do you reckon?

x

gizmo111

There is something abut having a bank account in credit so Iwould go for the OD first and then the highest interest card.
Have you done an SOA? This will show you exactly how much you have left to pay the debts off.

amiehall

On the other hand, I found the overdraft to be the hardest thing to clear when I was trying to pay off my debts. It's really hard to reduce the OD when you're still using at as your bank account. I paid off my credit cards first then opened a new bank account and paid off the overdraft like it was a CC.

holsinthesun

I think being overdrawn makes me feel so depressed, more so than the other debts, I guess that's why I've tried to chip away at this first. My problem seems to be, I say I have about £200 to use, but there's always something that crops up.. like this month it was my car tax, and i know next week I must buy my son new school shoes (his have a hole in - the shame) !
An S.O.A - statement of affairs right? Is that where I list all outgoings/incomings? But like absolutely everything, down to the last penny? I've never done that.. too scared to find out I haven't actually got £200 left to play with I suppose!
Ok... I know whats going to happen... you're going to tell me to get rid of Sky Movies aren't you? ;0) I'll set to working it all out... jeez this is scary, I wanna cry already !

x

gizmo111

holsinthesun wrote: »

I think being overdrawn makes me feel so depressed, more so than the other debts, I guess that's why I've tried to chip away at this first. My problem seems to be, I say I have about £200 to use, but there's always something that crops up.. like this month it was my car tax, and i know next week I must buy my son new school shoes (his have a hole in - the shame) !
An S.O.A - statement of affairs right? Is that where I list all outgoings/incomings? But like absolutely everything, down to the last penny? I've never done that.. too scared to find out I haven't actually got £200 left to play with I suppose!
Ok... I know whats going to happen... you're going to tell me to get rid of Sky Movies aren't you? ;0) I'll set to working it all out... jeez this is scary, I wanna cry already !

x

Yes it is where you set it all down and nobody is going to tell you do anything - just make suggestions - do you ever watch sky movies?

joedenise

You really need to post up a Statement of Affairs (SOA) from the "makesenseofmoney" (see sticky at beginning of Debtfree Wanabee forum. If you don't feel ready to post it on to the forum at least do it for your own benefit. Also use the Snowball calculator from the same website and that will show you the best order of clearing your debts. And remember you can make payments at any time not just on the dates the minimum payments are due (you may not be able to do with some loans without incurring charges or they may have been "front loaded" which means the interest is added at the beginning so there is no point in clearing early because you'll still end up paying the same amount of interest). Perhaps join the "PAD" forum.

Denise

Edit: seems others have posted similar while I was typing this

mrsb83_2

Things like car tax and new clothes shouldn't come as a surprise. You need to start budgeting properly if you're going to clear the overdraft.

Do two SOAs - one with what you're spending now - be honest!! - and then another with a realistic budget that you can stick to.

I 2nd joining the Payment a Day thread - it's made a huge difference to me.

holsinthesun

This is a last months outgoings which to honest is a typical month. I take £250 cash out after I get paid and use that, and only that, for things like fresh bread/milk etc, haircuts, treats for me and my son. Basically as soon as that's gone it's tough luck. I've been very strict with myself and it has worked these past two months, so i do intend to continue with it. My monthly food shop is fixed, as I've worked out a monthly menu plan, which we have also stuck to and that works a treat - no wasted food for a change.
I do appreciate any comments, but I won't budge on my sons kickboxing, its the only hobby he does and I wouldn't want him to give that up because I'm crap with money! Oh and one final thing... I rarely go out (3 times a year if that) and have no hobbies (saddo eh) so there's nothing I'm hiding from you all honest !

Ok..... lets have it :0)

(don't forget I'm £3100 overdrawn, the debts outstanding are a rough guess going on memory as i don't have details and apr's to hand...)

Missed a few off thanks gizmo111 - updated in red

Monthly Ingoing/Outgoings...

Wages £2458
Rent (my brother staying with me) £200
Child Benefit £81
Tax Credits £42
Child Mainentance £50
Total £2831

Nationwide Loan £269 (£6000 2yrs left)
Natwest Loan £259 (£10000 4yrs left)
Zopa Loan £97 (£1000 10mths left)
MBNA credit card £100 (£3800)
Natwest Credit Card £41 (£1800)
Tesco Credit Card £65 (£2100)
Argos Card £43 (£1200)
Overdraft Interest £42
Total £918

Natwest Mortgage £719
Council Tax £91
Water £43
TV Licence £12
EDF Gas/Electric £92
Sky Phone/Internet/TV £72
Mobile £26
Total £1055

Car Insurance £43
Car Tax/Maintenance £35
Life/Critical Care Insurance £60
Homeserve Insurance £29
Xbox Insurance £2
House/Buildings Insurance £33
Total £202

Monthly Asda Shop £95
Petrol £80
National Lottery £10
Kickboxing (sons) £39
Window Cleaner £10
Xmas Club £40
Emergency Fund £25
Misc Budget: £250
Hairdressers - me & my son (£40)
Fresh Milk/Veg/Bread etc (£80)
Alcohol/Cigs (£80)
Total £549

Total Incoming £2831
Total Outgoing £2725
Balance £109

gizmo111

You've got nothing for car tax and maintenance.
Do you actually have £257 left at the end of th month?

holsinthesun

I don't put aside money for my car, if i've needed a new tyre for instance, i just pay for it. I guess I could budget for car stuff each month, but I have always paid for these things as and when they happen.
I do have about £250 left after everything that is expected has been paid out for. I suppose I could budget for car tax/maintainenace monthly? That would be £35 a month... still leaving me with the £200 I thought I had to use each month before I wrote it all down?

gizmo111

holsinthesun wrote: »

I don't put aside money for my car, if i've needed a new tyre for instance, i just pay for it. I guess I could budget for car stuff each month, but I have always paid for these things as and when they happen.
I do have about £250 left after everything that is expected has been paid out for. I suppose I could budget for car tax/maintainenace monthly? That would be £35 a month... still leaving me with the £200 I thought I had to use each month before I wrote it all down?

Yes - its the only way you will have a true figure of what you have left to throw at the debts.
Also need to add council tax an an emergency fund.