New Debt Free Wannabe - Advice Needed

martinegan

Current Debt

Cahoot = £6,956.53 @ 14.9%
Citi Financial = £3,604.79 @ 46.8% ***silly mistake***
Graduate Loan = £1,343.90 @ 14.9%
Barclays Overdraft = £1,179.64 @ 9.9%
Cahoot Overdraft = £977.41 @ 11.8%
Barclaycard = £338.79 @ 19.9%
Studio Catalogue = £178.50
Great Universal Catalogue = £320.65

Total Debt: £14,900.21

Monthly Outgoings

Rent = 200.00
Internet = 37.00
Mobile = 35.00
Sky TV = 43.50
Telephone = 50.00
Car Insurance = 60.00
AA Membership = 10.00
Forbes Direct (Dryer Rental) = 25.00
Gas = 40.00
Electric = 40.00
Home Study course = 55.00

Debt (Min payments)

Cahoot Loan = 150.00
Graduate Loan = 100.00
Citi Financial = 160.00
Studio Catalogue = 10.00
Great Universal = 45.00
Barclaycard = 7.00

Total Outgoings: 1077.50
Total Income: 1600.00
Total left over: 522.50

Any advice on how I should be approaching clearing off this debt would be appreciated. The debt is mainly down to student debt with loans and overdrafts. I would like to initiate a plan to clear my debt as quick as possible.

If anyone can give me some advice on setting up a budget and also what bills to pay first along with the payments I should be making in order to best manage my debt. Making minimum payments is meaning the debt is taking an age to come down.

I have been looking into entering a DMP but as I am not actually in financial trouble (as such) having still a decent amount left over after bills etc I'm not sure this is suitable for me. I am just investigating this option as I am useless at managing my own finances and though instructing such a company might help in making sure the bills are paid and the amounts I can afford are put towards the correct debts etc.

What is everyones opinion on this?

Thanks for your feedback.

Rimmer

martinegan wrote: »

Current Debt

Cahoot = £6,956.53 @ 14.9%
Citi Financial = £3,604.79 @ 46.8% ***silly mistake***
Graduate Loan = £1,343.90 @ 14.9%
Barclays Overdraft = £1,179.64 @ 9.9%
Cahoot Overdraft = £977.41 @ 11.8%
Barclaycard = £338.79 @ 19.9%
Studio Catalogue = £178.50
Great Universal Catalogue = £320.65

Total Debt: £14,900.21

Monthly Outgoings

Rent = 200.00
Internet = 37.00
Mobile = 35.00
Sky TV = 43.50
Telephone = 50.00
Car Insurance = 60.00
AA Membership = 10.00
Forbes Direct (Dryer Rental) = 25.00
Gas = 40.00
Electric = 40.00
Home Study course = 55.00

Debt (Min payments)

Cahoot Loan = 150.00
Graduate Loan = 100.00
Citi Financial = 160.00
Studio Catalogue = 10.00
Great Universal = 45.00
Barclaycard = 7.00

Total Outgoings: 1077.50
Total Income: 1600.00
Total left over: 522.50

Any advice on how I should be approaching clearing off this debt would be appreciated. The debt is mainly down to student debt with loans and overdrafts. I would like to initiate a plan to clear my debt as quick as possible.

If anyone can give me some advice on setting up a budget and also what bills to pay first along with the payments I should be making in order to best manage my debt. Making minimum payments is meaning the debt is taking an age to come down.

I have been looking into entering a DMP but as I am not actually in financial trouble (as such) having still a decent amount left over after bills etc I'm not sure this is suitable for me. I am just investigating this option as I am useless at managing my own finances and though instructing such a company might help in making sure the bills are paid and the amounts I can afford are put towards the correct debts etc.

What is everyones opinion on this?

Thanks for your feedback.

You don't need to pay £80 for phone/tv/internet, virgin offer £30 for all of them

medman

I'm guessing from your rent that you don't live alone? What are your domestic arrangements.

I agree with Rimmer the TV/Phone/Internet you're paying way too much. Also your gas and electric is double ours for a four bed house.

The APR on Citi Financial is alarming, would you get any interest back if you cleared it early? Might be worth trying to obtain some 0% cards or low life of balance cards if possible, provided you don't use them to shop!!


Renting a tumble drier seems wasteful, you could buy a second hand one for not much more than a months money, or better still use a washing line outside!

Your car insurance looks very high, I presume you're a young driver? Try shopping around for cheaper quotes. If you go through Quidco you can get cash back for switching insurance and utilities.

So reduce your outgoings, maximise your income and throw as much as you can at the debt with the highest APR. Sounds simple doesn't it.....it's a challenge but it's worth the effort.


OK good luck

MM

Emmzi

Generally you pay minimum on everything, and throw extra cash at the highest rate first, so citfinance -unless you can shift it to a lower rate card??

You will of course know sky is a luxury not a neccessity
£25 for dryer rental seems ridiculous to me when you can buy outright for a couple of hundred, or get an old one off freecycle.

Have you tried the snowball calculator?

http://www.whatsthecost.com/snowball.aspx

what's your estimated debt free date by it?

angelavdavis

Hi Martin and welcome,

Here are my suggestions, I am sure the good folks on here will come up with more too!!!

martinegan wrote: »

Current Debt

Cahoot = £6,956.53 @ 14.9%
Citi Financial = £3,604.79 @ 46.8% ***silly mistake*** Have you tried to get this moved to a life of balance credit card at a lower rate?
Graduate Loan = £1,343.90 @ 14.9%
Barclays Overdraft = £1,179.64 @ 9.9%
Cahoot Overdraft = £977.41 @ 11.8%
Barclaycard = £338.79 @ 19.9% Do you have anything to eBay to reduce this and the catalogue bills?
Studio Catalogue = £178.50
Great Universal Catalogue = £320.65

Total Debt: £14,900.21

Monthly Outgoings

Rent = 200.00
Internet = 37.00 See below
Mobile = 35.00 Cut down on using the mobile or switch to pay as you go
Sky TV = 43.50 Cancel the contract and use the box for freeview
Telephone = 50.00 See if you can get a combined broadband and phone deal
Car Insurance = 60.00
AA Membership = 10.00 Shop around - RAC offer deals through quidco - sign up with quidco.co.uk and you can get a deal
Forbes Direct (Dryer Rental) = 25.00 What is this for? Can't you hang stuff out in the sun or use the radiators?
Gas = 40.00 Turn the thermostat down, put on a jumper, buy a slow cooker and cook meals for the power of a lightbulb
Electric = 40.00 Replace bulbs with low power, turn off devices on standby, etc
Home Study course = 55.00 How long is this for?

Debt (Min payments)

Cahoot Loan = 150.00
Graduate Loan = 100.00
Citi Financial = 160.00
Studio Catalogue = 10.00
Great Universal = 45.00
Barclaycard = 7.00

Total Outgoings: 1077.50
Total Income: 1600.00
Total left over: 522.50 Have you been using this to overpay debts above? You haven't included food, socialising, Christmas/birthdays, holidays, car tax, council tax, water bills, etc so you might need to review the spending as it appears a bit light. You could easily pay off one of your smaller debts in one month every month for a couple of months if you used this money and cut back as suggested above.

Any advice on how I should be approaching clearing off this debt would be appreciated. The debt is mainly down to student debt with loans and overdrafts. I would like to initiate a plan to clear my debt as quick as possible.

If anyone can give me some advice on setting up a budget and also what bills to pay first along with the payments I should be making in order to best manage my debt. Making minimum payments is meaning the debt is taking an age to come down.

I have been looking into entering a DMP but as I am not actually in financial trouble (as such) having still a decent amount left over after bills etc I'm not sure this is suitable for me. I am just investigating this option as I am useless at managing my own finances and though instructing such a company might help in making sure the bills are paid and the amounts I can afford are put towards the correct debts etc.

What is everyones opinion on this?

Thanks for your feedback.

Start a spending diary and keep it for a couple of months to capture where you spending is. Then you will see other areas to cut down.

You seem to be earning enough to make more of an impact on your debts. I would clear the Barclaycard and catalogue loans first - this will provide you with more money to throw at other debts.

Try to switch the higher interest debt to a lower life of balance card and then see if you can apply for zero percent cards to minimise the growth of your debts.

Use the link to the snowball calculator - Take a look at www.whatsthecost.com and select snowballing on the left hand side it will calculate your snowballed repayments. This will indicate which debts to pay off first.

Check the terms and conditions of the loans to see if you are penalised for settling them early.

Cut up all your cards, stick the catalogues in the recycling and STOP SPENDING!

eBay anything you can to try to reduce the outgoings.

Good luck!

martinegan

I know, but I am in a 12 month contract with my current suppliers (only moved into my new house in January). I am looking into the possibility of downgrading the services they offer though as that shouldn't breach my contracts with them?

Can anyone offer any other advice where savings can be made? Also how I can go about budgeting and also organising a snowballing payment plan! as I explained I'm fairly rubbish when it comes to money management (or should I say I have been) I've finally seen the light and need some advice to help me claw back to being debt free once more.

Is it worth me talking to some debt management company to see if they can help me structure my payments and budget to aid in clearing my debt ASAP?

Any feedback / advice is welcome.

martinegan

angelavdavis wrote: »

Hi Martin and welcome,

Here are my suggestions, I am sure the good folks on here will come up with more too!!!



Start a spending diary and keep it for a couple of months to capture where you spending is. Then you will see other areas to cut down.

You seem to be earning enough to make more of an impact on your debts. I would clear the Barclaycard and catalogue loans first - this will provide you with more money to throw at other debts.

Try to switch the higher interest debt to a lower life of balance card and then see if you can apply for zero percent cards to minimise the growth of your debts.

Use the link to the snowball calculator - Take a look at www.whatsthecost.com and select snowballing on the left hand side it will calculate your snowballed repayments. This will indicate which debts to pay off first.

Check the terms and conditions of the loans to see if you are penalised for settling them early.

Cut up all your cards, stick the catalogues in the recycling and STOP SPENDING!

eBay anything you can to try to reduce the outgoings.

Good luck!

Great advice thank you!! I will do as you have suggested and try to determine my spending patterns. As you have said my salary is such that with some decent cut backs and financial management I should be able to make a decent dent in my debts! I often make over payments where possible to try bring balances down (i.e credit cards/overdrafts) but I'm aware I could and perhaps should be doing more. That is why I have come here for some advice on where to start! I will keep this post updated as and when I begin to get a grip on things.

Keep your advice coming people.

Emmzi

I've fed you through the snowball calcultaor with £700 a month going to debt and it comes back with 27 months to debt free date. How does that sound?

martinegan

Emmzi wrote: »

I've fed you through the snowball calcultaor with £700 a month going to debt and it comes back with 27 months to debt free date. How does that sound?

Sounds good I am going to try my best to budget/cutback anywhere I can in order to enable me to pay off more on my debt each month. £700 sounds achievable for sure

angelavdavis

Martin,

I know you had missed out food from your calculations, but it is worth (if you don't already) making your own sandwiches for work and looking over on the MoneySaving Old Style board for ideas of cutting back food shopping costs. Suggestions are meal planning (which means you only buy produce for your meals and don't buy anything that ends up being binned), storecupboard challenge - try to cook a few meals out of what you have in the cupboard to help the shopping stretch a bit longer, etc.

I saved £70 per month avoiding the canteen at work!

I think you will surprised if you keep a spending diary on what you are actually spending!

Good luck!