Newbie in need of some advice please!

boo2905

Hi

I'm wondering if anyone has any words of advice for me.

I'm only 22 but have about £10,000 of debt without including my student loan which I would like to clear before I get a house and have a huge mortgage to pay so I've had my lightbulb moment and decided that 2007 is the year to try and become a bit more solvent.

I've read a lot of threads and seen that I need to put a SOA so here goes.

Income = £860 a month after tax (although I am looking for a better paid job)

Debts

HSBC Overdraft: £500
RBS Overdraft: £500
RBS Credit Card: £2583.00 (limit £2650) 0% interest at the moment
Loan: 5,000 over 4 years (RBS)
Mobile Phone bill over last 6 months: £985.00
Parents: £5,000
Boyfriend for costs on holiday: £250
Student Loan: £12,500

Monthly Outgoings

Rent: £80 (£20 a week living with parents)
Parents: £200 to clear debts
Loan: £100 (should be £124.36 a month but OH is paying the remainder till I get sorted)
Mobile Phone company: £60 (to clear debt)
Mobile Phone: £10 (Pay as you go)
RBS Credit Card: £60 minimum payment
Car Insurance = £50.24 (1st time insurance - only pay until september and then get 3 months off before i have to start paying again and should go down £100
Car Tax = £10.50 (put in savings account until it is due)
Food = £40 (any left over is saved)
Going Out = £20 as we are staying in as much as possible
Petrol = £40 a month

Any tips would really help and I would be really grateful.

abitrubbish

Hi there

Well done for posting!

My first thoughts when looking at your SOA is wow - it really is cheap to live with your parents! Are you really only paying £40 a month on food?

I worked out that based on what you have put down, you should have £164 a month left over to put towards your debt. I assume, given that your OH is helping out with the loan, that you don't actually have this money at the end of the month. In which case the first thing you need to do is figure out where it is going. Are you buying clothes, lunches/coffee at work, dvds, anything else? Many people on here suggest you start a spending diary where you write down everything you spend for a month to try and get to the bottom of this. Then you can make a realistic budget which includes all the things you really can't live without and anything left over can be put towards your debts.

Also you have nothing on your budget for large one-off expenses like car service/MOT, Xmas/birthday presents or holidays. You need to work out how much these things cost you in a year and actually put something away each month and include this in your budget otherwise you are going to be reaching for the credit card when something comes up (how you got in this situation in the first place I suspect!)

Apart from that, I can't see how you could reduce your outgoings, it is just a case of making a budget and really sticking to it. You will soon see the debts going down once you start making extra payments. I guess the phone bill should be the first to go, do you know what the interest rates are? Can you overpay on the loan?

You could also try and make a bit of extra cash by selling any stuff you don't need any more, ebay or amazon are good places to start.

Good luck and let us know how you're getting on!

boo2905

Hi

Thanks for the reply - it's really interesting to get an outside opinion on what I'm doing financially.

The rent for living with my parents is something that they agreed on because they knew I had a lot to pay off and they would rather my money goes towards my debts which is really good of them.
The £40 food is just for little bits like soup at work and I try and stretch it so it's £10 a week and I put the change left over into my savings jar. I make my lunch every day and I have meals with my mum and dad so I don't need to spend any there.

Since the beginning of April I've stuck to not using the credit card and hope to just build up the amount on there.

The phone bill hasn't got any interest on it which is good but as you suggest maybe I should clear this first rather than other things.

Lucy1982_2

Hi Boo

Welcome to the board. Like you I have just over £10,000 of debt excluding my student loan (although at nearly 25 :eek: a little older). I think I want your parents as my Mother charges me £50 a week! But this is much cheaper than private renting.

I agree that there is very little to pick up on your SoA but I would suggest trying a spending diary as it is amazing what you can spend without realising it. Also trying to get rid of some old stuff on Ebay or Amazon can help make a little bit of extra cash. I've made about £38 in the last week. Not bad for a quick sort out and my CD collection is looking a little less embarassing!!

But good luck and keep posting so we can see how your getting on.

lynzpower

HI there :wave:

My first thought is on 860 a month, you should be entitled to working tax credit. My oH is on about that too, and he is entitled to 22 quid a week. Do apply, all the details on the benefits & tax credits board.

HSBC Overdraft: £500 ( what are the APRs on these?)
RBS Overdraft: £500 ( again APR?)
RBS Credit Card: £2583.00 (limit £2650) 0% interest at the moment
Loan: 5,000 over 4 years (RBS) ( APR?can you overpay?))
Mobile Phone bill over last 6 months: £985.00 ( are you really spending 164 a month!!!!! You need to cut this back hun- to the BONE- do not use the phone at all, outside of your free mins, what contract are you on- how much is it who with, what mins do you get?? Parents: £5,000
Boyfriend for costs on holiday: £250
Student Loan: £12,500 ( apr? I take it they are not taking the money from you at the mo ?but the interest is still stacking so do remember that)

Monthly Outgoings

Rent: £80 (£20 a week living with parents)
Parents: £200 to clear debts
Loan: £100 (should be £124.36 a month but OH is paying the remainder till I get sorted)
Mobile Phone company: £60 (to clear debt) ( what is it usually?)
Mobile Phone: £10 (Pay as you go) ( do you need 2 phones? I would be tempted to sell the one with the contract on and raise some cash. Try ebay. I would also dig about and see if you have any old phones laying about and sell them to https://www.envirofone.co.uk)
RBS Credit Card: £60 minimum payment
Car Insurance = £50.24 (1st time insurance - only pay until september and then get 3 months off before i have to start paying again and should go down £100
Car Tax = £10.50 (put in savings account until it is due)
Food = £40 (any left over is saved) ( try and make soups ( lots of cheap & easy recipes on the Old style board- for work ,whatever you can save ut of this will help. When I start work im going to do a quid a day challenge- if i take my lunch I need no more than a pound a day, some days I dont even spend it, and save it for something else)
Going Out = £20 as we are staying in as much as possible ( look out for free cinema tickets on the freebies board) Petrol = £40 a month

All the best and do let us know how you go on

lynz

atypicalblonde

Hi Boo and welcome! You are in the right place for advice and support, big congratulations to you for getting everything down on paper and sharing it. I too have a student loan and some other debts, and it can be dealt with hun so first things first is to take a deep breath and not panic.

As Lynz has said above, you need to find out the APRs you are paying on your debts as a priority. Secondly, have you got any bits and pieces that you can put on ebay/Amazon/carboot?

Good luck and keep posting hun x

hypno06

The quid a day challenge that lynz mentions above is a really good and easy "start". Apart from the stuff mentioned above, I can't really think of anything else productive, other than write down absolutely everything you spend in May and have a look at it to see if there is anything you can cut out without it feeling as though you have lost your right arm?

Also, have you checked your credit reference? You can do this online for free by using https://www.creditexpert.com but first of all sign up for https://www.quidco.com so that you can get £5 cashback (I think). The reason for saying this is that if your ultimate aim is to get a mortgage, you need to keep as good a credit file as possible, and any "blips" need to be worked on right now in order to allow you to get the best deal available when the time is right.

Good luck and keep posting!

boo2905

Thanks for everyone's advice so far - it's opening my eyes to different things that I can do.

I only spent 96p yesterday so I am going to use the '£1 a day' challenge and see how well I do through May.

In answer to some of the things that Lynz mentioned

HSBC Overdraft: No APR as they don't charge me for it until July this year I think but they owe me £270 in charges :j which should half it.
RBS Overdraft: Not sure on the APR because apparently it changes everyday on the account but I pay on average about £6 a month on it.
RBS Loan: Not sure on the APR but it's £5000 over 4 years and the interest that I pay overall is £996.64. At the minute my settlement figure would be £4651 - the bank has said I can overpay when I want to but for amounts of like £100 a time.
The Mobile Phone: I admit I have been very stupid with this:o but I have completly stopped using it now apart from the 500 free texts and 500 free minutes after 7pm other than that I use Pay As You Go which is why I have the two phones.
Student Loan: I think I pay about £12 a month in interest so it's quite a low interest one but because I don't earn above the threshold I don't have to pay anything - i would still like to though.

I have tried to sell a few things on Ebay and made about £12 so far - does anyone have any suggestions as to what sells well?

hypno06

Have a look on the "things you never thought you could sell" thread that is on here somewhere, or look on the "olympic challenge" thread - full of good ideas for making extra money out of nothing!

Toto

regarding the mobile phones, have you cancelled your contract with the original one? If not, check that you aren't paying more per minute on the PAYG than you do on the contract phone, otherwise it's false economy having two. Personally I would cancel the contract one if possible and sell it on ebay (free minutes aren't free when you're paying a contract fee after all). If you can't cancel yet I would stick with it but be very strict with myself over usage.