First step into tackling debt!

debtfree_bride

Good Morning!

I am in a position whereby I am getting married next september (2013) and need to face up to my debt and really need some help on where to start! The wedding itself is a very small affair and is costing under £1000 so this does not need to be included as it is already paid for. Anyway enough stalling. I want to reduce my debt as much as possible but do not know where to start. I have not managed my finances well at all and am hoping if I list where I am, someone can assist me?

Ok to here is what I owe:

Halifax Overdraft (current authorised) £1200 (use this each month)
Lloyds Overdraft (closed account passed to iQor) £1270
Capital one credit card £343 (limit is £300)
British Gas (closed account passed to DCA) £171
Post Office insurance (closed account) £241
Very catalogue £74
Quickquid £312 (due end july)

I also have a debt to my current partner of £1400 which is interest free and he is in no immediate rush for repayments.

Incomings per month:

£850 wages

Outgoings:

£47 Mobile phone (contract up in November)
£69 Car insurance (renewal due Apr 2013)
£50 petrol
£150 Food and toiletries
£345 Rent and bills (including rates)
£40 Overdraft fees (from halifax)

I am being charged interest on the Halifax account (£40 per month, £10 of this is ultimate reward account fee) Also on the Capital One card (34%)

I really need some help on how to prioritse these and how much to pay off on what each month. I have no access to anymore funds other than what is left of my wages. My wages this month will be £1010 as I have a week carried over from last month (just started work).

Can anyone advise on where I should start with this? Credit rating is terrible. I have a vanquis card with 30% apr with £300 avaliable, and zero balance.

I know I have been stupid getting into this mess. I left an awful relationship two years ago and my finances have spiralled out of control since :-(

Thank you in advance.

D_B xx

bexiboo92

debtfree_bride wrote: »

Good Morning!

I am in a position whereby I am getting married next september (2013) and need to face up to my debt and really need some help on where to start! The wedding itself is a very small affair and is costing under £1000 so this does not need to be included as it is already paid for. Anyway enough stalling. I want to reduce my debt as much as possible but do not know where to start. I have not managed my finances well at all and am hoping if I list where I am, someone can assist me?

Ok to here is what I owe:

Halifax Overdraft (current authorised) £1200 (use this each month)
Lloyds Overdraft (closed account passed to iQor) £1270
Capital one credit card £343 (limit is £300)
British Gas (closed account passed to DCA) £171
Post Office insurance (closed account) £241
Very catalogue £74
Quickquid £312 (due end july)

I also have a debt to my current partner of £1400 which is interest free and he is in no immediate rush for repayments.

Incomings per month:

£850 wages

Outgoings:

£47 Mobile phone (contract up in November) Can you get this reduced?
£69 Car insurance (renewal due Apr 2013)
£50 petrol
£150 Food and toiletries - how many people is this for?
£345 Rent and bills (including rates)
£40 Overdraft fees (from halifax) - maybe discuss with Halifax you're having financial difficulties? I know Lloyds help out when you're in trouble.

I am being charged interest on the Halifax account (£40 per month, £10 of this is ultimate reward account fee) Also on the Capital One card (34%)

I really need some help on how to prioritse these and how much to pay off on what each month. I have no access to anymore funds other than what is left of my wages. My wages this month will be £1010 as I have a week carried over from last month (just started work).

Can anyone advise on where I should start with this? Credit rating is terrible. I have a vanquis card with 30% apr with £300 avaliable, and zero balance.

I know I have been stupid getting into this mess. I left an awful relationship two years ago and my finances have spiralled out of control since :-(

Thank you in advance.

D_B xx

Good morning.

Well done on taking your first step

First of all do a SAO - http://www.makesenseofcards.com/soacalc.html, so people can advise you on what to cut down on

Good luck with your journey

debtfree_bride

Here is my statement. Although I live with my partner, we keep our own money. We pay half each toward everything. My halves are listed below. This excludes my debt and mobile, and insurtance.



Household Information

Number of adults in household 2
Number of children in household 0
Number of cars owned 1

Income, Expense, Debt & Asset Details

IncomeAmount(£)
Monthly income after tax 850
Partners monthly income 0
Benefits 0
Other income 0
Total monthly income 850

ExpensesAmount(£)
Mortgage 0
Secured/HP loan payments 0
Rent 220
Management charge (leasehold property) 0
Council tax 47
Electricity 25
Gas 0
Oil 0
Water Rates 18
Telephone (land line) 0
Mobile phone 47
TV Licence 6.25
Satellite/Cable TV 25
Internet services 20
Groceries etc. 150
Clothing 0
Petrol/diesel 50
Road tax 15
Car Insuranc e69
Car maintenance (including MOT)15
Car Parking 0
Other travel 0
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 15
Pet Insurance/Vet bills 0
Buildings Insurance 0
Contents Insurance 0
Life Assurance 0
Other Insurance 0
Presents (birthday, christmas etc.)15
Haircuts 15
Entertainment 0
Holiday 0
Emergency
Total monthly expenses 752.25

Secured & HP Debt DescriptionDebt(£)Monthly(£)APR(%)
Mortgage0 (0) 0
Secured & HP Debt totals0 - -

Unsecured Debt DescriptionDebt(£)Monthly(£)APR(%)
Capital one card £343 34%
Halifax Overdraft £1200 APR: £1 per day + £10 pm account fee
Lloyds Overdraft Old £1270 0%
British Gas £171 0%
Post office £214 0%
Very.co.uk£ £74 29%
Unsecured Debt totals £3272 -
Asset DescriptionValue (£)

Cash 0
House Value (Gross) 0
Shares and bonds 0
Car(s)500Other assets (e.g. endowments, jewellery etc) 0
Total Assets 500

HappyMJ

Which expenses have the ability to be cut? It looks like very few such as medical, presents and haircuts so you need to increase your income to pay off your debts.

Is your mobile really £47 a month? You can get the latest phone on the market with unlimited everything for less than £47 a month.

Priority number one is to pay off QuickQuid and never use them again. If you use them you will be digging yourself a bigger hole you can't get out of. Borrow from your partner if you need more money but really you should not need any more money at all.

debtfree_bride

Is your mobile really £47 a month? You can get the latest phone on the market with unlimited everything for less than £47 a month.

Yes, I got the new iPhone last summer on an 18 month contract. Never again

Moneymash

So you and your partner pay £150 each month for groceries totalling £300 a month. I feel this could be reduced, try lidl, Aldi, or Martin's shopping challenge dropping a brand.

Also, there is a website called Approved foods, who sell discounted food as it is near it's sell-by date. However, before any of this use up what you have in your cupboards or freezer first. You both should be able to halve your grocery bill.

It is a pity about the iphone I was going to suggest giffgaff as they do great deals.

BluePumpkin

debtfree_bride wrote: »

Yes, I got the new iPhone last summer on an 18 month contract. Never again

Same, maybe we should set up a support group??!!

I'm still fairly new at this, but try keeping a spending diary. I've put my onto a spreadsheet and I'm updating it every evening. I know my SOA for example isn't as accurate as it could be, so as I update the information I can work out where all my money goes.

bargainbetty

Can you include your repayments on the SOA, to show if you are within your monthly income or not? If your debt repayments take you over your income, then your debt will just keep rising!

Firstly, try to get your Capital One card back below it's limit. This will save you additional charges.

Can you call Vanquis and ask if they would consider a low-life-of-balance transfer rate? If the rate they offer is lower than the current rate you are paying (allowing for the transfer fee) think about taking it. You can also do it before your next monthly payment is due, so it counts as a payment, saving the actual cash to be put towards another debt.

Your car insurance is really high for a cheap car - can you drop it to third party for the remainder of the year?

I think you might need to look at ebaying, boot fairs, selling off stuff you don't need to raise some capital to throw at the debts, or find a second source of income. Part time bar work, shop work, baby-sitting, dog-walking, anything you can do to get money in and clear the debts. You can live within your means, if you don't have these to pay off. You are paying £42 per month to Halifax alone in charges! For a start, ask about switching to a non-fee-paying account, save a tenner per month?

Best of luck x

debtfree_bride

Thanks everyone for your replies. I am really focussed on getting this resolved. I have decided to go for the snowball effect, and will hope to be debtfree in 18 months.

I am pretty confident I can cut back on the food shop. This includes alcohol as we have been having friday nights in since we started cutting back. I will perhaps write a menu for the week and buy ONLY that as I have a tendency to pop to the shop for bits, and I think I lose track that way.

I cannot get cheaper car insurance, I had two claims, one in December 2010 in April 2011 (1 week after renewal) (both my fault) and I am still paying the price. It renews in April 2013 so hopefully I will have some no claims by then!

I have issued letters to my creditors so will see what they say. I have tried to spread quickquid over 4 months but they have said they will only do this once the loan defaults so I need to wait until the end of the month.

It's hard to get a second job as I work 8-5 mon-fri and only get minimum wage. I have borderline personality disorder and had a bit of a breakdown doing my previous £20k PA job and no mentally cannot cope with responsibility at work. It's sad because I went to uni and worked hard for ten years but the BPD has become a lot worse and I can only manage it without adding extra stress.

So heres to hoping it all works out!! xx

debtfree_bride

Also....my ultimate reward account costs me £10 per month, however I get free mibile insurance, AA cover, and worldwide travel insurance. Is it best to cancel this and purchase mobile and AA insurance seperately? The travel insurance I can get on a PAYG basis, but I am not going away until next year anyway...

x