What would you do...

Welshlassie

weeg wrote: »

My salary gets spent on frivoulous things like a mortgage and council tax. Plus feeding and clothing myself. I even have fun occaisionally. Any spare goes to paying off stuff.

My company do not issue credit cards to anyone below partner – which makes about 200 of us in the company which occur expenses. And Life is too damn short to stay in the only hotel near my head office which a) falls into spending limits and b) will allow payment by invoice. If I’m going to be away from home then I want to stay somewhere OK and eat nice food. After all, it isn’t costing me anything! Or it wouldn’t if I reactivated one of my paid-off-so-cut-up cards, and thus cleared it every month. But I’m happier only having 1 card. This is entirely standard practice in my industry.

I really have thought this through, and my debts are heading in the right direction.

(PS sorry if I sound really defensive, I wish I could type in tones of voice!)

I understand where you are coming from regarding the hotels as I spend quite a bit of time away from home, however I have a corporate credit card to make life easier.

Just a thought, maybe you should consider staying the one of the direct invoice hotels for a couple of weeks/a month so can have a month without adding to your Egg card. This may give you a bit of breathing space to clear it down a bit, reduce the interest etc and put you in a better position.

The reason I queried what happens to your salary is because in your first post you state that you use the card for things like groceries.

If you're credit rating is ok, it may be worth considering getting a cashback credit card (morgan stanley, american express platinum) to use exclusively for work expenses, this way you'll be able to keep them separate and anything left over from your expense payments can be used to clear your Egg card or saved for large car items like insurance etc. I do this for the petrol costs I incur for work and pay it off every month in full therefore not incurring and interest, but building up cashback to be paid out once a year that I can use for a treat for myself. Have had my card 6 months and already have £30 sitting there.

vix1978_2

Egg Money pays casback too (at least mine does).

I think you should pay £100 into a savings account to save up for the yearly expenses on the car. Then pay the extra £110 off the Egg card to clear this quicker and to get you down to a situation where you only have your expenses on there which will be cleared once a month.

Skint_Catt

Post a full SOA and we can find some more money for you to use while ploughing the £210 into your card to pay it off so that eventually you will be out of this Catch 22 situation!

Catt xx

weeg

Hmmm, an SOA. Here goes. I haven’t included the 1 payment left car loan.

(NB I don’t have all the paperwork to hand, so there may be some vagary in the figures)

Income (after tax and pension) £1570
Mileage from work was £769 last year, varies from month to month.

Outgoings: Every Month
Mortgage £345
Council tax (inc water) £92
Student Loan £117
Landline: £11
Mobile & broadband £32 (more than a year left on contract)
Electricity £15
Gas £15
Cinema £11 Please don’t ask me to give this up. That’s an all-in cost for 6 nights out a month, and goes a long way to keeping me sane.
Institute of Civil Engineers £21 until August.
Petrol £20ish
Groceries (inc toiletries) £100ish
Charity £10 ( but I get a free holiday every year)

Other – not paid monthly.
Factors £27/quarter
Buildings insurance (paid through factors) 2 installments of approx £140
Car Insurance £350ish
Car Tax £110/year
TV licence £140/year
Car Servicing ? Say 350/year? Still under warranty, so unsure about figures.
Weddings: £200/year
Birthdays £120/year
Christmas £120/year

Things I haven’t forgotten but cost between 0-50/ year. Make up, hair cuts, dentist.

Reasons I got into debt: Home refurbishment, buying PC, buying car, 4 months unemployment 3 years go. In addition to the obvious spending more than I earn. (Not any more!)

Debts: £2065 Egg 7.9 APR pay £300 month
O/D limit £1350. Normally at limit by end of month
Student Loan £3500 ish at last statement

beanielou

Why dont you put the amount you had been paying to the car loan to Egg for a good few months & get it down a good bit.
Then youcould also try building up a rainy day fund.

webitha

i wold put 6 months of you car laon into an isa that way you got a rainy day fund then after that plow it onto your egg

or half and half that way ont only are you building saving but getting the egg card down

Welshlassie

What is the APR on your overdraft. Are there any bank charges you can claim back and then throw at the o/d or Egg whichever is the higher APR.

What is Factors £27/quarter when you pay them £140 twice a year for buildings insurance. Have a look to see if you can find this cheaper anywhere else. Same goes for the car insurance although that is a good price. Check out the cash back websites likes Quidco for that little extra cash if you take out insurance etc through them.

Even taking into account a monthly figure for each of the none-monthly amounts you still should have around £650 per month floating around somewhere. Try keeping a spending diary, everytime you buy something which isn't on direct debit note it down and how much and over the space of a few weeks or a month or two you may start to notice a pattern of things that you could cut out, for example newspapers, coffee on the way to work, the odd chocolate bar at lunchtime. You'd be surprised how these things add up. (A £2.10 coffee 250 days a year costs £525 a year).

You obviously want to get this sorted so keep up the good work. I would suggest throwing £150 of the loan money at the Egg card (or o/d if this has a higher APR) and put the remainder into a savings account eg ISA for rainy day/car servicing etc money.

It might also be worth considering getting a new current account so that your salary isn't swallowed up by your o/d every month, that way you can see exactly what you have and then use any surplus to put towards you o/d and/or Egg account until paid off. You don't have huge debts that with a bit of belt tightening and clever movement of money you could have paid off quite quickly.

Good luck.

weeg

I spent a terribly exciting lunch hour transferring all the numbers form my spending diary into a spreadsheet.

Which led me to the conclusion that I eat and drink too much. Or rather I eat out and drink too much! On the plus side having to write it down has decimated my spending on books, cds and newspapers.

At least I can console myself that the most expensive month of the year has just past (5 birthdays, mothers day, MOT month, insurance payment).

I live in a tenement block – 8 flats on 1 stairwell. The factors charge a standing fee to do inspections and organise any work that needs done. They also organise the buildings insurance – all 8 flats on 1 policy, so I have no option but to pay up and carp about it.

No bank charges to claim – I know it’s not very in tune with the ethos of this board, but I rally don’t think the hassle is worth it for the £25 I’m owed. APR is, apparently, 15.9% on the o/d. Interestingly I see that the same bank has another account which is only 7.9%apr, and gives you 1% cashback on your debit card, so I may phone them and see if I can switch.

lynzpower

what is your OD limit?

SMile gives an interest free overdraft of 500 quid on all current aco!!!!!, I have 2 accounts with them and am very impressed with them thus far.

Welshlassie

Hi Weeg

Sounds like you will have that much extra cash floating around if you've now find out where some of that £650 extra a month you had was going. Try to keep hold of it and use it pay of the o/d.

On the basis that your O/d has the higher APR throw the extra Car loan money at that as you will be paying more interest on that than the Egg card. Work out realistically how much you can actually pay off without cutting your life completely, (you've got to have a bit of fun) and plug all the figures into a snowball calculator, this will show you how quickly you could pay off your debts and start using that £500 you are currently throwing at your debts to save or buy something you've always wanted.