Help with budgeting

RJ1890

Hi there,

This is my first post and I'm not sure if I've put it in the right place - I also considered the Debt-Free and Student Money areas so feel free to move the post if it would be better off somewhere else!

After a few years of frivolous spending I've ended up with a reasonable chunk of debt - I am currently a final year student and, although I know many people in more difficult situations than myself, I have recently developed an urge to try and remedy this situation. I'm going to try and outline my situation with as much useful information as I can, including future changes, and any advice on areas I can cut down, save money, or what debt I should write off first would be much appreciated! My big worry at the moment is not having any kind of cash buffer for unexpected expenses - even £50 in my account that I knew didn't need to spend would help me to sleep at night.

So, as it stands:

Debts:
- Natwest Student Overdraft (0%, and low interest for a post graduation period) - £2000.
- Lloyds TSB Current Acct O/D - £200 (int + fee is around £9/month)
- Vanquis CC (Circa 40% interest) - £1500 (around £85 monthly min)
- Natwest Student CC (Much less interest) - £490 (Around £12/month)
- Jacamo acct - £150 - minimum around £12

Other Outgoings/DD's:
- Orange phone contract - circa £40/month, ends in July.
- Contents insurance - £9/month
- Share of Virgin internet - £13/month

Now, on the income side:
- £90/week - this is my student loan, in what I hope is a prudish decision I have given it to my parents, who feed it back to me weekly whilst also putting some aside for surprise utility bills.
- Part time work - generally around £250 a month, this month (Jan) will be around £100 due to not working over Xmas, March will be around double due to an extra short term job.
- Very occasionally a bit of cash from photography jobs, but I'm usually paid in drinks.
- I am owed around £400 in tax rebate by HMRC, but due to a few issues this is taking ages. Any advice on ways to expedite the process would be gratefully received.

I've already started trying to take some control. I now track everything in a double-entry book-keeping system. This is something I was considering taking a course in, so even if it isn't the most convenient method of tracking my spending I figure the knowledge gained will offset that. I don't use or need to use either of the credit cards. Currently I just pay the minimum charges, but it did occur to me recently that anything extra I can put in (especially to Vanquis) will help me in future months.

I have looked into using a pay packet to nuke my contract with Orange, as it would be £220 to escape now. On balance, I'm paying for the service either way so might as well actually use it. Longer term I'm looking at GiffGaff sims, I've heard good things.

My Lloyds overdraft is my top priority to get rid of, as I don't pay into this acct as much as I should and have once been threatened with immediate request to repay due to lack of ingoing funds. I want to get rid of this ASAP so I can stop worrying about it. Second target I guess would be Vanquis, as that can be a crippling amount to direct debit if it falls on the wrong day.

Jacamo account I don't use for day-to-day shopping (it's a ripoff really) and in fact I have plenty of clothes, but it has saved me once or twice when I've needed something in a rush and haven't had cash to hand.

Something that I have found useful in the last week or two, and plan on implementing full time, is an Orange Cash prepaid mastercard. My plan is to load this with a proportion of my weekly income (probably £45) to pay for groceries, travel to uni, and the odd bit of socialising, plus a proportion of monthly pay for the occasional treat (a meal out with friends or similar). This way, I can let the other money sit in my Natwest account and, after minimum payments have all been made at the end of the month, divide it as appropriate between debts. I know I won't be able to get rid of all my debt before I graduate, but a bit of leeway for celebration over summer would be nice!

Longer term, I have a grad job with a large bank sorted for September (as long as I get a 2:1 - eek!), which comes with a nice salary and also a welcome payment with the first salary packet. I plan on using the welcome pay to get rid of any remaining personal debt, and then putting it into savings (which I currently have zero of!).

I think a lot of this post has been for me to structure my thoughts, but any money saving ideas anyone has that would suit me, or alternate suggestions to my approach, would be greatly appreciated. If you have any questions feel free to ask and I should be able to give any info I've missed! Thanks in advance, and I look forward to being a part of the MSE community!

getmore4less

might be easier if the format is better the standard one used these days is

http://www.stoozing.com/msoc/soacalc.php

it will also do the adding up for you

Desperate_Housewife_2-2

Hi and welcome to the forums. You have done the best thing posting on here to get help and there is plenty around. You may want to repost your post in the debt free wannabee board as they will help you sort it out better there.
Your debt is 'do-able' ...if you act now which you have. Could you swap over your existing credit card debt to another provider with a lower rate and overpay to get the balance down?
I always think the trick to saving and paying off debt (I have extensive experience in both!) is to manage your everyday expenses, especially food. Try to plan ahead for things. You mention jacamo which I havent heard of is it a store card? I would get rid of it if it is and shop 2nd hand. get to charity shops and buy interview clothes etc there to put in your wardrobe for emergencies
Good luck and keep us posted

Willing2Learn

Hi, and as stated earlier by the "Desperate Housewife (although hopefully not too desperate any more), welcome to the forum!

As far as paying back your debts are concerned. Google "debt snowball" as that is imho the most effective method to repay debt as quickly as possible. There are two slightly different schools of thought with snowballing. I recommend focussing on the debt with the highest interest first to achieve the maximum benefit. The Dave Ramsey method (think that's his name though can't be bothered to google) recommends focussing on the smallest debt first for psychological reasons, in order to allow the debtor to visualise the progress. The latter is not as financially beneficial though in the long term.

RE income. I get about £25-£30/month doing online surveys on consumer habits, politics and society. If you are interested, you can find further information on this elsewhere on the MSE boards.

Very interesting first post you made. It is good that you have understood the need to manage your budget effectively. Good luck with your studies and getting to grips with your finances.