First steps. Please Advise

SmashEm_2

Hello

Well I`ve put off posting for long enough. Its time to do something about my debts. SO please advise

Income: £950-£1050 (4 weekly)

Rent: £500pm
Council tax: £77
tv licence: £12.12
water: £28.77
Gas :£40
mobile/internet: £30
electricity: £70 (quarterly)
Food: I work for a food company so get lots of free food and dont have to spend much

Halifax Credit card: £5733 atm (limit £5750) 26.45% apr- usual min repayment is £110-120

Halifax overdraft: £1988 atm (£2100) Charges £1 per day for overdrafts up to £2000 then £2 per day for above £2000

I`m on time with my repayments but I have made some late repayments and gone over the limit on the credit card in the past.


I imagine a low interest rate loan/credit card would be the best way to go but which one?

Please advise
Thanks

ellesbellesxxx

Looking at your incomings and outgoings you have in and around 200 left a month - but you have not given any details as to where this goes - holidays, entertainment etc. Your budget is tight as it is.
Looking at your debts, it seems everything left over is servicing your debts.
I don't think getting into any more debt is a good idea, as you are already spreading yourself thin.You would be best off contacting someone like Stepchange to get a Debt management plan to pay off your debt, then concentrate on cutting back - or making more money to fund your lifestyle.

Straightaway, I can see that your rent is pretty much half your income - is there any way to move somewhere cheaper? Houseshare/with family to give yourself some breathing space? You could def cut back on mobile phone tariff too! Have you got anything you could sell?
Good luck!

ellesbellesxxx

(PS if you have some late repayments on your file, and a high amount of credit you will find some low cost loans will be unavailable - please don't take out any more credit!)

stephane_2

Looking at your income and level of credit card debt & large overdraft always in use.....then I doubt very much that anyone will want to give you another credit card or a loan. You need to work out a budget to reduce your overdraft gradually....

datlex

SmashEm wrote: »

Hello

Well I`ve put off posting for long enough. Its time to do something about my debts. SO please advise

Income: £950-£1050 (4 weekly)

Rent: £500pm
Council tax: £77
tv licence: £12.12
water: £28.77
Gas :£40
mobile/internet: £30
electricity: £70 (quarterly)
Food: I work for a food company so get lots of free food and dont have to spend much

Halifax Credit card: £5733 atm (limit £5750) 26.45% apr- usual min repayment is £110-120

Halifax overdraft: £1988 atm (£2100) Charges £1 per day for overdrafts up to £2000 then £2 per day for above £2000

I`m on time with my repayments but I have made some late repayments and gone over the limit on the credit card in the past.


I imagine a low interest rate loan/credit card would be the best way to go but which one?

Please advise
Thanks

My first throughts are:

Elec - could you save by having monthly direct debit? Would be worth investigating

Your income is quite low, are you over 30? If so look at tax credits.

Open two bank account with another bank - get your salary paid in one. Set up a standing order on payday to transfer your fixed expenses (incl credit card payments/ overdraft payment) to the other account. Separating your debts/ expenses and spending money helps you find extra money.

Might be worth speaking to the Halifax about moving the credit card to a loan and then closing the card. Your interest rate would slash considerably.

mildredalien

It sounds like what you are looking for is consolidation - to move your current debts to a lower interest option in order to free up more money each month. This can work, but be VERY careful - a lot of people find that they just build up the debts again on the overdraft/credit cards that they clear. You need to be very sure that you can stick to a budget that will mean not spending any more on credit. A question you should be asking yourself is how you built up that debt in the first place.

Why not try for a few months to plan for and stick to a budget? Then you can see either how much you can pay off each month if you are strict, or that you would be able to manage consolidation (if you are able to get further credit). If you go down the consolidation route, make sure you reduce your overdraft drastically if not get rid of it altogether, and close down that credit card.

Try this link for more detailed budget planning - you can post the SoA on here if you like for further advice, but you don't have to. http://www.stoozing.com/msoc/soacalc.php

SmashEm_2

Hi guys

The aim is to reduce and eventually get out of debt. I`m managing to pay my bills and I`m making the repayments and overdraft fees. After having paid those I use whats left for entertainment/leisure etc

The idea was to consolidate and slash the interest so the repayments and overdraft fees I`m paying, actually go towards reducing the debt. At the moment I`m not getting further into debt but I`m not reducing it either. I`m just in the same place.
I have no intention of taking out more credit to live on, as I`m managing to making ends meet.

Ilona

You might consider knocking entertainment and leisure on the head for the time being, to free up some money to throw at your debts. You probably don't like that idea, but it's up to you to decide what is more important, a short term happy fix or long term debt misery. Try and find hobbies and interests you can enjoy for free which doesn't involve spending money.
Ilona

SmashEm_2

Ok so I`ve done an SOA which is more accurate:


Monthly Income Details
Monthly income after tax................ 950
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 50
Total monthly income.................... 1000

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 77
Electricity............................. 18
Gas..................................... 40
Oil..................................... 0
Water rates............................. 29
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 19
Groceries etc. ......................... 30 (work for a food company so get plenty of free food)
Clothing....(I just use the clothes I have, I dont tend to buy many)
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 20 (i cycle wherever possible)
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)...... 0
Haircuts................................ 0
Entertainment........................... 60
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 816


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................5740......120.......26.45
overdraft......................2000......40........0
Total unsecured debts..........7740......160.......- [/b]


Monthly Budget Summary
Total monthly income.................... 1,000
Expenses (including HP & secured debts). 816
Available for debt repayments........... 184
Monthly UNsecured debt repayments....... 160
Amount left after debt repayments....... 24

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -7,740
Net Assets.............................. -7,740

Created using the SOA calculator
Reproduced on Moneysavingexpert with permission, using other browser.

LittleMissGiggles123

Gas seems a bit high.

If you cut the enetertainment in half for a few months add it to the £24 you have spare each month to pay more on the credit card.

You do have a lot missing though, like haircuts, contents insurance, medical/prescriptions & emergency fund.

Do you really have the £24 spare each month? Might need to keep a spending diary for a few weeks

SmashEm_2

I pay £40 direct debit for gas and that has put my gas account into credit, so I have contacted them to reduce it to around £30

I dont have contents insurance because I dont have many valuables and most equipment is under warranty. I dont have any prescriptions. And I`ve got long hair so dont really have haircuts.

It seems like a DMP or consolidation loan(if i can get one) would be the most viable options, together with cutting back wherever possible