£3,300 DEBT - help required

marshmallowkisses

Hi

Although this is my first post here on the forums, I am keen to seek advice at this time, despite having read many a post here before.

I am currently worrying about debts that I have,

Credit Card 1: 1104
Credit Card 2: 1136
Overdraft: 1050
TOTAL: £3290

I currently early £1450 pcm but had been extending my overdraft and spending on credit cards (being completely stupid in all honesty) - I am so worried now that my spending will go out of control if I keep spending like this.

I am constantly in my overdraft, although have stopped using the credit cards (cut them up!!).

My bank actually phoned me the other week (BOS/Halifax) - offering me a consolidation loan stating that it would work out better for me but I am not convinced.

I just really need some suggestions, I think I could really reign in what I am spending but it is the committing to paying back a certain amount of £100's per month that worries me!!

Any advice would be very much appreciated.

Thanks in advance, MMK.

byjimini

ok, so that at this rate, it would cost you £300 a month to pay off the debt in under a year, interest free. Get a 0% card or two and transfer over those balances, cut your spending right back to the bare essentials, then work out how much you can pay of your overdraft each month.

If the cards are 0% then they can be paid the minimum until the overdraft is under control.

You've about the same amount of debt as me, so don;t worry, it's very manageable but does take time to get rid of.

marshmallowkisses

Thanks very much for your reply and help.

I have looked at how much it would cost me to pay back, and I could afford that, living on the bare essentials. It's just deciding what to pay first and committing to that which is the most scary problem here! I am tempted to get rid of the overdraft first, but at the same time think it would be a good idea to also pay back something towards the other credit card.

Currently the 1136 is on a 0% card, however the deal does not allow me to do a balance transfer as it was a purchase rate (not thought through at all), I am therefore reluctant to take out another, but if this would help it would be worthwhile.

I am really quite new to all of this and have been pretty naive

The worst thing is my partner and I have a mortgage appointment soon (I currently rent) and I am worried this would affect us. (Note we are just looking for advice at the moment and would need to save a deposit first!).

Thanks again.

Tixy

Hi

First you need to work out how much you have you can put towards your debts each month but still being able to afford all the essentials you need.

The way we recommend doing this is by completing a statement of affairs. And be realistic - no point assuming you can live with no new clothes/no entertainment and eat only beans on toast for a year if you cannot. It has to be a long term budget and if you set it too tight you will be much more likely to fail.

Once you know what you can afford a month then to decide the best order to tackle your debts you need to consider the APRs on all the debts and for the overdaft how much it is actually costing you a month.
Another thing to conisder is if you might be able to improve the APRs you are paying (eg by a 0% card etc - although you might not be approved for a new card).

marshmallowkisses

Thanks very much for your help!

bargainbetty

Do set aside a bit of money just for fun. Your earnings should cover all your commitments so having a mad ten minutes won't be terrible.

Have a 'lipstick and hats' budget, with a small amount set aside for pointless tat. You will probably find you won't use it very often, because you'll get quite keen on money-saving!

With your overdraft, when you get paid this month, call the bank and ask them to reduce it by £100. Or £50, if you like. If it isn't there, you can't spend it.

Final thought, have a really good search through all your cupboards. Make a list of what you have and plan meals around it, look at your wardrobe and see if you could eBay things, same with books, CDs etc to have a good declutter (important if you are thinking about moving in with the partner) do a boot fair, and throw any cash you make at the highest interest debt.

I have to save due to being out of work for a while. I found I had enough staples in the cupboard to only buy milk for a fortnight and stille at well, enough cleaning products to last three months, I haven't bought moisturiser in over a year now (still working the stash) and for some reason I had 36 loo rolls. I lived alone. 36 loo rolls. Oh well.

It's all dead cash. Bring it back to life!

teaandcupcakesplease

Hi

Im in a similar situation. I have about £1500 on a credit card and about £500 in overdraft the only difference is i have £1000 savings. I know you shouldnt have savings when you have debt but im worried i wont get it back. However i think im just going to have to bite the bullet. x

marshmallowkisses

bargainbetty wrote: »

Do set aside a bit of money just for fun. Your earnings should cover all your commitments so having a mad ten minutes won't be terrible.

Have a 'lipstick and hats' budget, with a small amount set aside for pointless tat. You will probably find you won't use it very often, because you'll get quite keen on money-saving!

With your overdraft, when you get paid this month, call the bank and ask them to reduce it by £100. Or £50, if you like. If it isn't there, you can't spend it.

Final thought, have a really good search through all your cupboards. Make a list of what you have and plan meals around it, look at your wardrobe and see if you could eBay things, same with books, CDs etc to have a good declutter (important if you are thinking about moving in with the partner) do a boot fair, and throw any cash you make at the highest interest debt.

I have to save due to being out of work for a while. I found I had enough staples in the cupboard to only buy milk for a fortnight and stille at well, enough cleaning products to last three months, I haven't bought moisturiser in over a year now (still working the stash) and for some reason I had 36 loo rolls. I lived alone. 36 loo rolls. Oh well.

It's all dead cash. Bring it back to life!

Thanks very much Betty! I will take all that on board! I have been quite good at selling on ebay recently, although the money in the past has been put straight into my account and then is swallowed up by unnecessary purchases!

These tips are really useful! So thanks, I am trying as we speak to think of some things I could list on ebay when I get home, and have some stuff in the freezer to use for tea! :O)

teaandcupcakesplease wrote:

Hi

Im in a similar situation. I have about £1500 on a credit card and about £500 in overdraft the only difference is i have £1000 savings. I know you shouldnt have savings when you have debt but im worried i wont get it back. However i think im just going to have to bite the bullet. x

I am in that situation too, I have some savings, which I received from my grandparents but have locked away in a 2-year ISA. It does seem silly, but I guess it gives me an aim, that once I have cleared what I owe, I'll be able to add to that

Thanks!

his_missus

Hi!

Don't go for a consolidation loan, I did that once (ok, twice oh and an extended one too) and all I did was continue spending on the then empty credit card (originally just kept for emergencies but...)

Try to see if you can cut back a bit and live within your means. Are you getting the best deals for utilities, phone etc? A night in with your mates instead of going out is much cheaper. Do you really need to buy it or do you just want it? (A lot of my I need it nows weren't even really I wants the week after)

Selling things is an easy way to make extra money - one man's trash is another man's treasure and all that.

Pay the debt with the greatest interest first. Ask to have your overdraft or credit card limit reduced as you pay them off so you're not tempted to spend on them.

Don't lose heart if you do have a moment of madness spend - put it down to experience and work a bit harder on debt busting. Many of us have had lapses on the way, it's being able to pick yourself up instead of giving up that gets us debt free.

Good luck x

marshmallowkisses

Thanks so much for the kind advice, it is just great to have found so much help here already with people who have been/are in the same situations!

I am trying really hard to stop spending on things I dont really NEED i.e. magazines, snacks, meals out! Can sometimes be easier said than done though But I guess that's just life and I will have to balance what I really do NEED!

I have a lot of good ideas now that I have been fishing around in the forums for advice - thank you all very much, I hope I can succeed much sooner than I originally thought

MMK x

byjimini

Good stuff. The biggest thing to get over for me was to start using the stuff I had; often I'd buy things because the thrill was collecting DVD's, books etc rather than actually watching and reading. So I would read a book and sell it off, and keep doing that until I was out of books and films. Saves money and uses the time constructively, without costing money.