Not sure what to do...

anxiety

Hi Everyone.
This is my first time here.
I am not sure what to do so I am going to write it all down and take it from there.
I have some debts, and I feel a bit lost. I have always tried to be as sensible as possible with money but I have made some mistakes and I am getting more and more stressed, depressed and anxious about my situation.
Whilst at uni in 2007, I took out a credit card (they were giving them out like sweets in those days) and racked up £1800 of debt for living expenses- I don't mean partying, I spent it on food, rent and bills. I have repaid and re-spent on this credit card many times and today I am still maxed out on this. I have never missed a payment, and when I can I always make extra payments to the card, but somehow at the end of the month I end up having to use it to pay for necessities.

I also accumulated an overdraft about this time, which has varied in size. One day when I was very fed-up, I went to the bank and asked for help. I was ready to try anything that might help, but went in adamant that I wouldn't come out with more debt. In my suggestible state of mind, I was then sold an expensive loan to cover the debt owed on my credit card and overdraft. I paid off the overdraft and cut up the credit card and all was good with the world.
I feel incredibly stupid writing this next part, but predictably I felt the pinch and started spending on both of these again. Now I am right back where I started, with the addition of a monthly loan repayment. Fantastic!!

I live with my partner, who knows about this but is not financially involved at all, which is the way I want to keep it. I earn just over £20k a year,which at the moment is just about enough to cover my repayments and living costs. But its really tight and I cannot budget it ANYTHING extra, which leaves me in a sticky situation at birthday time, Christmas or for anything unexpected. I feel like I have done everything I can to help myself- I have budgeted and stripped out everything not strictly necessary from the expediture. I don't go out, I don't buy clothes or shoes.
The only two things I can think of are increasing my income, or looking into negotiation options. I have heard of DMPs, am I a candidate? Does anyone have any experience of these? The final embarrassing and bizarre twist is that I am a trainee accountant! **** This is only a career development of the last couple of years- my debt was accumulated before then.


So now I have written it all down and got it off my chest. I know many many people are so much worse off than me but I am at a loss and I don't seem to be getting anywhere. Any thoughts would be appreciated. Thanks.:(

TakingControl

First of all, take a deep breath

The thing with a DMP is that your credit rating will be shot for quite some time and as its an volunteer agreement between you and your creditors, you could end up with defaults and even a CCJ, all depending on the creditor. Not sure if this would affect your career as a accountant at all?

The best way for people to help is to post a SOA and see where you could budget more. There might not be a need for a DMP at all.

anxiety

thanks, I might do an SOA. I noticed your debt free date was just the other day- was that an expected date? or are you actually debt free?If so, well done! :T How does it feel??

TakingControl

anxiety wrote: »

thanks, I might do an SOA. I noticed your debt free date was just the other day- was that an expected date? or are you actually debt free?If so, well done! :T How does it feel??

Thank you. My debt free date was suppose to be 2015 however I managed to get debt free quicker and I am indeed debt free as off the 14/11/2012

chevalier

http://www.makesenseofcards.com/soacalc.html

Link to an SOA. You mention you are in training. I would be VERY careful about going even onto a DMP, as I am unsure whether this would affect your training.

Also ref the OH, whilst it is fine that you keep your finances separate, you are paying a fair proportion of the bills? Ie if he earned 40k and your earn 20k then a fair split would be him 66% you 33%. Then when you are qualified and hopefully your income soars you would perhaps go the other way?

good luck
chev

anxiety

Thanks for your reply.I went through the preliminary stages of enquiring about DMP, and right enough the final question asked specifically about my career and if it was in accountancy. I am not as qualified as the levels they were referring to but I don't want to hamper my chances in the future, especially if it is do-able with out a DMP. So I think I'll shelve that.
Just figured out what "OH" refers to. He earns only slightly more than me, but as he is on a management graduate scheme, I expect we will both be earning a decent amount in a few years time. We do a traditional 50-50 split of all the bills each month. The difference is he doesn't have a credit card or a loan and is managing to save a little. Hmmm....

anxiety

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1293
Partners monthly income after tax....... 1320
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2613

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 20
Gas..................................... 20
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 15
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 400
Clothing................................ 0
Petrol/diesel........................... 150
Road tax................................ 0
Car Insurance........................... 90
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1410


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................1800......36........17
Bank Loan......................3025......125.......28
Overdraft......................1200......0.........0
Total unsecured debts..........6025......161.......-


Monthly Budget Summary
Total monthly income.................... 2,613
Expenses (including HP & secured debts). 1,410
Available for debt repayments........... 1,203
Monthly UNsecured debt repayments....... 161
Amount left after debt repayments....... 1,042

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -6,025
Net Assets.............................. -5,025



All figures are approximate as I do not have my paperwork to hand for interest rates etc.

TakingControl

anxiety wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1293
Partners monthly income after tax....... 1320
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2613

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 20
Gas..................................... 20
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 15
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 400 This is massive for 2 people, you can easy shave off £100 at least
Clothing................................ 0 Never? You should have something in here
Petrol/diesel........................... 150
Road tax................................ 0
Car Insurance........................... 90
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 No contents insurance?
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0 No hair cuts at all?
Entertainment........................... 30 That is very low?
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1410


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................1800......36........17
Bank Loan......................3025......125.......28
Overdraft......................1200......0.........0
Total unsecured debts..........6025......161.......-


Monthly Budget Summary
Total monthly income.................... 2,613
Expenses (including HP & secured debts). 1,410
Available for debt repayments........... 1,203
Monthly UNsecured debt repayments....... 161
Amount left after debt repayments....... 1,042

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -6,025
Net Assets.............................. -5,025



All figures are approximate as I do not have my paperwork to hand for interest rates etc.

I have added some comments in red for you. It also seems that you have plenty of surplus money on paper but assume not in reality. Start a spending diary, today and note oown everything you buy/spend on to find out where all your money is going

anxiety

I think you are probably right about the food bill. The supermarket is where most of my money goes unfortunately.I very seldom buy clothes though. Certainly not every month, but I guess if you took the total for the year/12 it would be maybe £15-20/month. I actively avoid the hairdressers,and go perhaps once a year.

The SOA above implies that our combined income goes towards paying my personal debts- I pay my own repayments etc. from my income. I wouldn't expect my OH to contribute to this as they are not his debts. So I think it gives a bit of a false picture. My salary covers my share of the rent, bills and utilities and also my repayments, car insurance and petrol...just!!

"Taking control" - how did you acheive your debt free status then? Did you use any special techniques or was there any thing that sticks in your mind as being particularly effective? I'm ready to try anything to be honest!

TakingControl

anxiety wrote: »

I think you are probably right about the food bill. The supermarket is where most of my money goes unfortunately.I very seldom buy clothes though. Certainly not every month, but I guess if you took the total for the year/12 it would be maybe £15-20/month. I actively avoid the hairdressers,and go perhaps once a year.

The SOA above implies that our combined income goes towards paying my personal debts- I pay my own repayments etc. from my income. I wouldn't expect my OH to contribute to this as they are not his debts. So I think it gives a bit of a false picture. My salary covers my share of the rent, bills and utilities and also my repayments, car insurance and petrol...just!!

"Taking control" - how did you acheive your debt free status then? Did you use any special techniques or was there any thing that sticks in your mind as being particularly effective? I'm ready to try anything to be honest!

In that case, maybe re-do your SOA with your income alone and your share of the bills. Do include the monthly cloth shopping at £20 and put something for prescriptions and hairdressing to get a true picture.

As for my debt free journey. I started on a DMP and was lucky that a family member gave me a monetary gift that I could pay off on a F&F my biggest creditor. This was 2 years ago. I kept a monthly spreadsheet with all my payments and outgoings/spendings and became rather obsessed with shaving off even more each month and throw more at my debts. I stopped the DMP 2 years ago and just existed rather than lived but it meant I paid everything off 2 years early. :j My motto was 'Live frugal for shorter than comfortable and in debt for longer'

foxgloves

That £400 a month on groceries really jumped out at me. We budget £250 a month & that feeds two of us (partner has huge appetite!) very well. The key tools for reducing this spend are meal planning & being prepared to cook a lot more from scratch. Don't buy unnecessary products....for example, no-one needs a different cleaning product for each job, a bottle of 'Stardrops' & a cheap 5L container of basic bleach will last for ages. Do you have a freeezer? Freeze extra portions & these will give you a 'free' meal for later in the month. Shop around. Fresh fruit & veg almost always cheaper at local markets or on the regular Aldi super-6 offer. I think this is the expense you can most easily cut. You can probably do it on £200, but even if you did £250 like we do, that'd free up £150 a month to chuck straight at your debts. That'd be £1800 a year. I can promise you that with some careful planning & buying, you will not feel like you are living on bread & lard! We eat really well, but we both cook & are prepared to shop around. £400 really is a LOT for 2 people. Best of luck with it all. You sound like just how me & partner used to be, but you CAN turn it around if you do things differently.