Newbie, motivated and on a mission - Now very ANNOYED

pork_pie_2

Hi All,

I've been reading this board for a few weeks now and had my lightbulb moment a couple of weeks ago.

I've had good news that my bank are going to refund £1000 worth of bank charges and now I am really motivated to clear my debts as quickly as possible.

I know that my situation can be resolved and the only reason i'm in this position is because I spend more than I earn, mostly on unnecessary items, going out etc etc.

In summary my debts are as follows:

Cahoot Loan £9000 @ 14.9%
Egg Loan £2000 @ 14.9%
First Direct Overdraft £850 <---- Cleared by FD refunding my charges!
A&L Overdraft £100 <---- Cleared by FD refunding my charges!
Student Loan £750
Total £12700

My first problem is to stop spending more than I earn. I need to tackle this as a priority because otherwise my debt will keep getting worse. I have included what I've already tackled. All ideas welcome!

Income
Salary: £1600

Direct Debits
Mortgage: £560
AOL: £18 <

---

Now reduced to £10 after calling them and asking to leave
Car Insurance: Paid (next due in August)
Cahoot: £180
Mobile Phone: £40-50 <

---

Now reduced to £31
Student Loan: £68
Gas & Elec: £35
TV Licence: £11
Sky: £44 <

---

Now reduced to £15 (got rid of Movies and Sports) - Am going to completely cancel this week.
Egg: £50
Gym: £54
Council Tax: £62
Water: £20

Total: £1152 <---- Now reduced to £1096

This leaves me with £470 for Food, Travel, Entertainment etc, which is £108 a week. I will live on cash and will withdraw £50 on a Monday for the week and £50 on Friday for the Weekend.
However i'll only be making minimum payments on my debts.


Secondly I need to start working out how to overpay the debts!
1. Will use the £1000 from FD to reduce my overdrafts to zero (should i ask my banks to remove my overdraft facilities completely to remove the temptation of using them again?
2. Selling various items on Ebay with a view to overpay on my Loans.
3. I am going to look into Matched betting as this looks pretty profitable by all accounts.
4. This is kind of embarrassing but I'm due a £4000 bonus (please note this is not usual) from work later this week. I do however need to buy a car as my current car will not pass its MOT next month and is uneconomical to repair. I think that £2000 should be enough to buy a reasonable car - any suggestions?? The other £2000 can be used to pay off the Egg Loan.
5. Ideas on how to make my income go further so I can use this to overpay my debts.
5. ???? Anyone got any good ideas that I've not thought of or missed while reading the boards.


Thanks for reading especially as the post is longer than I thought it would be.

I would appreciate comments and thoughts. I will keep this updated as it should help keep me motivated.

clearskies

Hi, just wanted to say well done for taking such a positive step. Still new to this myself so can't really offer you any practical help as such, but other more experienced people will be along in a minute to offer you advice. Good luck!

Annie_Fanny

Hello Pork Pie
I think you are staring at the answer but you can't see it...
You could:
Cancel the gym...running is free
Cancel sky altogether and just have the free channels for a while until you sort yourself out
Cut your spends at weekend to say 20 pounds

The above would make you:
99 pounds a month....

How about that for starters?

Annie

pork_pie wrote: »

Hi All,

I've been reading this board for a few weeks now and had my lightbulb moment a couple of weeks ago.

I've had good news that my bank are going to refund £1000 worth of bank charges and now I am really motivated to clear my debts as quickly as possible.

I know that my situation can be resolved and the only reason i'm in this position is because I spend more than I earn, mostly on unnecessary items, going out etc etc.

In summary my debts are as follows:

Cahoot Loan £9000 @ 14.9%
Egg Loan £2000 @ 14.9%
First Direct Overdraft £850
A&L Overdraft £100
Student Loan £750
Total £12600

My first problem is to stop spending more than I earn. I need to tackle this as a priority because otherwise my debt will keep getting worse. I have included what I've already tackled. All ideas welcome!

Income
Salary: £1600

Direct Debits
Mortgage: £560
AOL: £18 <

---

Now reduced to £10 after calling them and asking to leave
Car Insurance: Paid (next due in August)
Cahoot: £180
Mobile Phone: £40-50
Student Loan: £68
Gas & Elec: £35
TV Licence: £11
Sky: £44 <

---

Now reduced to £15 (got rid of Movies and Sports)
Egg: £50
Gym: £54
Council Tax: £62

Total: £1132 <---- Now reduced to £1095

This leaves me with £470 for Food, Travel, Entertainment etc, which is £108 a week. I will live on cash and will withdraw £50 on a Monday for the week and £50 on Friday for the Weekend.
However i'll only be making minimum payments on my debts.


Secondly I need to start working out how to overpay the debts!
1. Will use the £1000 from FD to reduce my overdrafts to zero (should i ask my banks to remove my overdraft facilities completely to remove the temptation of using them again?
2. Selling various items on Ebay with a view to overpay on my Loans.
3. I am going to look into Matched betting as this looks pretty profitable by all accounts.
4. This is kind of embarrassing but I'm due a £4000 bonus (please note this is not usual) from work later this week. I do however need to buy a car as my current car will not pass its MOT next month and is uneconomical to repair. I think that £2000 should be enough to buy a reasonable car - any suggestions?? The other £2000 can be used to pay off the Egg Loan.
5. Ideas on how to make my income go further so I can use this to overpay my debts.
5. ???? Anyone got any good ideas that I've not thought of or missed while reading the boards.


Thanks for reading especially as the post is longer than I thought it would be.

I would appreciate comments and thoughts. I will keep this updated as it should help keep me motivated.

gallygirl

OK, a few points.....

Car Insurance - how will you be paying for this in August? Keep some of your bonus for this - no point paying off a debt then incurring more.

Overdraft -yes, pay it off, but don't ask bank to cancel. Reduce limit but keep a few hundred of a cushion for when you make a mistake one month.

Stick all your debts into the snowball (www.whatsthecost,com) which will give you a debt free day - and then work to reduce it!!!!!

Your SOA is not complete, this is only your monthly commitments. You need to add on amounts for hair cuts, Xmas, birthdays, MOT, insurance, maintenance etc. Then set aside that amount every month in a separate account. Only use it for the items you've budgeted for, and monitor it in case you need to up amount a little.

Mobile phone - can you change to PAYG? Shop around and shut up

Gas & electric - this is very low (which is a novelty to say on here!!!!!!). What have you based it on? Make sure you're not running up massive arrears! And even although low amount check you are on best deal - try uswitch.com then see if the cheapest co. is offering cashback on www.quidco.com.

No water - are you in Scotland/NI?

Use price comparison sites like www.moneysupermarket.com for house & car insurance, then quidco & other cash back sites for cash back on teh cheapest.

Spending - start a spending diary. Write down every penny then analyse! Start one of the spending challenges on here & pop over to money saving old style to save money on housekeeping.

You're very lucky. Your debts are manageable & you'll have decent amounts to chuck at them soon, so good luck!

hypno06

Hi there and as said above, this is really achievable!

So, my suggestion would be to cancel the gym - £54 a month is over £600 a year which means that after tax etc you have to earn about £1000 to go to the gym each year!!!

What are you spending your £100 a week on? This is the area that you can cut down most on, probably by £25 a week.

If you put your details into https://www.whatsthecost.com with your current balances, APRs and minimum payments you will get your DFD. Now edit it so add in an extra £100 a month (from reducing your weekly spends) and see what the difference is on the Debt free date.

Now edit again and bung in the extra £54 from the gym and get another date,

then do it again with the gym money AND the weekly saved money and see what date you get there with a bit of extra effort!

Let us know how you get on!

lynzpower

I would say that your money back from bank charges should really be paid to the cahoot flexi loan.

Cahoot have a nasty habit of uppping APRS whnen ever they feel like it, and Id be inclined to pay off the mony from there and reduce the level asap.

pork_pie_2

Hi Guys,

Thank you for your kind messages and suggests of things to do!

In response to suggestions:

Gym - You are right it is expensive and I did have my reasons for joining but i guess the bottom line is that I am under contract until October, so i can't cancel until then.

Sky - You are right about cancelling it, I just needed pushing into doing it. I will cancel it this week.

Cut my weekly spend from £100 - OK i'll try but would like to split it to £40 on a Monday and £30 on a Friday. Will let you know how I get on.

Car Insurance - Should be about £300, but I agree and will put something aside for it.

Snowball Result - Debt free date assuming minimum payments on the loans is Oct 2012. Adding £100 to payment changes this to Oct 2010, so i'll use that as my first target but aim to improve.

Incomplete SOA - This is what my £100 (now £70) per week is for, but i'm going to start logging and budgeting all of this properly.

Mobile Phone - Again under contract until Nov, but have spoken to them and was on a really old and expensive tariff. This has been changed so i get 4 times the minutes for £31 per month (saving £10-19 per month). I guess this is a start until my contract is finished.

Water - Sorry this is £20 / month

Gas / Electric - It is actually about right. I live by myself and have no central heating. Will have a look round to see if i can get a better deal tho.


I'll get all of this in place over the next couple of days and post an update of all my spending etc. In particular where that £70 per week goes.

Thank you again for all your advise and comments.

pork_pie_2

Just testing my signature!

pork_pie_2

I've been going through my accounts to add things up properly, see the summary below for the correct figures. It is a bit worse than my first post.

The main change is that my mortgage is actually £660. (£100 more than i originally posted + i guess it is due to go as the base rate went up today)

In summary:
Income: £1610
Fix Outgoings: £1207

Balance per month: £403 which equates to £93 per week

(I've still to cancel sky so that'll save me £15 a month)


Now you might say £93 a week for food, travel, etc is easy but I'm struggling to spend less than £120. Better than it was tho.

I've now got my bonus so i have £2000 to pay something off. What are peoples thoughts on me paying off my Student Loan and Egg Loan first as at least this will mean I have more money left per week than i'm currently spending. I know it is the wrong way around BUT if i can't live in my means then the debt will get worse.

pork_pie_2

Oh yeah and matched betting is great, i've made £640 so far :T

pork_pie_2

Just checked by Gas and Electric online and given them some meter readings.

I owe the £11, so it looks like my monthly payments are pretty much spot on.

I'm with Scottish Power, anyone know who is the cheapest supplier at the moment, because i might switch. Plus quidco are doing £50 cashback for swopping to Powergen. Will i get that as i was previously a customer with them?