Advice Needed!

DragonAK

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1174
Total monthly income.................... 1174

Monthly Expense Details
Rent.................................... 100
Mobile phone............................ 35
TV Licence.............................. 12.12
Petrol/diesel........................... 150
Road tax................................ 0
Car Insurance........................... 65
Gym Membership.......................... 32.3
PC Finance.............................. 32
Bank Account............................ 20
Dad Payment............................. 100
Total monthly expenses.................. 546.42



Unsecured Debts
Description....................Debt......Monthly...APR
Natwest........................2841......40........0
Bank of Scotland...............769.5.....40........0
M&S............................1887......50........0
Total unsecured debts..........5497.5....130.......-


Monthly Budget Summary
Total monthly income.................... 1,174
Expenses (including HP & secured debts). 546.42
Available for debt repayments........... 627.58
Monthly UNsecured debt repayments....... 130
Amount left after debt repayments....... 497.58

Personal Balance Sheet Summary
Total Unsecured debt.................... -5,497.5
Net Assets.............................. -5,497.5



Afternoon all,

As you can see from my above SOA, I have a little bit of debt I need to clear.

I am back with my parents after a long story (which I won't go into)

I have an opportunity to pay off some of this debt, while I am paying practically nothing for rent/bills etc (a measly 100 a month)

I am the first to admit I have a huge problem with spending even though I know I can't afford to. I paid off the BoS credit card by transferring the balance to the 0% Natwest card only 2 months ago, and as you can see I have already put another 800 quid back onto it.

I have been juggling credit cards for a few years now and the current SOA where interest free periods are concerned is:

Natwest - 18 months 0% left
M&S - 5 months 0% left
BoS - 10 months 0% left

I actually have a very good credit rating, so I have just applied for another card (I know what you are thinking). I've been accepted for the nationwide 22 month 0% balance transfer card with a limit of 1800.

My initial idea was to transfer the balance of the M&S card onto the new card to make the most of the interest free period.

I am just worried about spending any more money.

I gave up smoking 2 months ago in an attempt to free up around £200 a month that I was spending on cigarettes. Granted I took out a gym membership to replace one habit with another, but I stand by that being a good decision.

There should be plenty of money there to have a life AND pay off the debts, I just can't stop myself spending too much on eating out or buying new things.

I think I have cut down my regular outgoings to a reasonable level.

I have purposely not entered amounts for going out or buying things, as this normally goes onto a credit card.

I am really looking for advice on what proportion I should pay to each card. As in, should I pay minimum payments to 2/3 of them while paying a large amount to clear one completely. Or should I split it across all?

Thanks in advance,

Adam

Barbeduk

If you stay with your parents for 11 months and chuck all you've got at it, you'll be debt free. The maths is simple.

BUT that won't happen if you see your new card as 'income' you have to spend. It's not, it's just more debt

Work out how much you need to pay off each month and pay it to your card on payday, don't let the money stay in your current account! I'd personally hit the m&s card first as it's got the shortest interest free term.

Have you thought about drawing out an amount of cash each week to allow yourself limited spends? Get you out of the habit of usingg cards too, it's harder to be so carefree with hard cash.

I'd also recommend joining some of the debt free challenges to keep you motivated.

Good luck.

mildredalien

It's probably not the monthly expenses you have listed that are the problem, it's all the other stuff you are spending your money on! The good news is you have £459 left over after the essentials to pay off your debt with - however I'd go through and complete a realistic, detailed SOA including all planned expenditure on food, socialising, entertainment, emergency funds if you think you'll need them and any other bits and pieces you think you will want to maintain while paying your debt off. Also, you have put nothing in road tax or car maintenance but you have stuff for petrol? Then you will have a realistic amount of money you can throw at your debts (you can be as stringent or as lax as you like about how much this is - it's your life after all!)

Once you have set a budget for all your non-essential spends, you need to figure out a way to stick to it! For some people it's withdrawing cash and leaving cards at home, for others it's making and updating spreadsheets and for some it's spending diaries etc. Whatever works for you

I'd always snowball by paying off the highest interest card first and minimum payments to the others. Once that's paid off you can throw everything you were paying to the first card on to the second and so on. Remember to cut up those cards - there is no reason to use them when you have a surplus each month, get in the habit of using the money you actually have while your outgoings are lower!

Good luck

mildredalien

Oh I just noticed that you have left off extras as you normally throw them on credit cards - I would certainly recommend getting out of that habit ASAP! It's oh so easy to just get the plastic out and not keep track of how much it's adding up to. You are in the lucky situation of having cash available - use it! Once you have paid off your debt that £627 a month will be all yours to do with as you will!

DragonAK

Thank you very much for the responses guys.

I know I'm not in as bad a position as others, but I do have a problem with spending.

I have tried the cash idea before, but it's sometimes worse for me, as it is readily available.

As suggested I am going to go through my online statements and do a detailed SOA of what I am actually spending my money on.

Will report back.


Adam

mildredalien

It depends how strict you can be with yourself. If you take out £50 in cash and know that has to pay for all your groceries and incidental bits and bobs for the entire week then you might think twice about spending it. If you keep taking out £20, £30, £40 whenever you run out then you'll spend it!!

What has worked for me is transferring all the money I have set aside each month for non-essential/irregular expenses (like clothing, presents, emergency fund etc.) into a separate account and making sure I check how those funds are before spending them. Some people do it in an even more detailed way, keeping track of how much they have for each 'pot', either virtually or physically with cash pots. I'm sure you'll find something that works for you, you just have to figure out how to keep motivated not to spend!

billinghamfan

put your cards in a tube full of water and then put them in the frezzer if you want to use them you'll have to wait till they defrost then you'll have time to think about what you are buying.

DragonAK

billinghamfan wrote: »

put your cards in a tube full of water and then put them in the frezzer if you want to use them you'll have to wait till they defrost then you'll have time to think about what you are buying.

That's a brilliant idea!! Most of the time I go off the idea of buying whatever it is shortly after.

Then again, I should really cut all my cards up (although I have just ordered replacements in the past)

As Mildred said I think I'll try taking out a set amount to last the week.

I have about 300 left to the 25th of June (after all my bills/debt payments have been made) I have already put a tank of fuel in, so will probably need another 70 out of that for another tank to last me the rest of the month.

camuk81

Try a spending diary so you can log where everything goes

mildredalien

It might be worth ringing the card companies and asking if you can close the account - I think there is a way you can do this so you continue paying at least the minimum payment, but can no longer actually use the cards. I know that you can do that if you refuse an interest rate increase...

DragonAK

I started keeping receipts for everything I paid for/bought last month with the intention of going through them all and seeing where my money has gone.

Most of it I paid for on my debit card though, so I'm going to go through my statements now and have a look.

I did see in another thread as well about closing the accounts so may give that a try.