Debt free advice/help sought.

Ashmeister_UK

Hi all,

I am 26, I currently rent with my GF. I work in I.T and earn 25k a year. I own my car which has done 150000 miles and probably worth around 2k now. That's probably it in terms of assets, unless I count my laptop.

I currently owe £3600 on a barclaycard which is now at 0% for the next 9 months, well 2600 of it is, I'm not sure when the term runs out on the previous balance transfer.

I also owe £5600 on a Sainbury's Loan at 9.1% (Was 8600 but I recently paid my £3000 savings off it.)

I want to save a deposit and buy a house under the new scheme that comes out in April 2014. It's a 5% deposit minimum and the government underwrites the rest, as of April 2014 this is available on pre-owned properties not just New properties as it is currently.

My net income is about £1500 per month. My outgoings equate to:

200 rent
70 car insurance
100 savings *now empty*
209 - sainsburys loan
100 - barclaycard
300 - additional payment to sainsburys loan (Just set this up)

879 total which should leave about 600 for the month.

That tends to get spent on food shopping and petrol and the odd meal out.

I'm just looking for advice/ideas etc on my situation, I feel like I'm always scraping the barrel come mid-month and not really getting anywhere financially, I really want to be living in my own house as oppose to renting one. I'm open to all ideas/suggestions and as you can tell I'm not entirely savvy when it comes to finances.

Thanks in advance.

Ashley

R_P_W

Is that 200 your half of the rent? What about council tax, water, gas, electric, mobile, broadband, insurance etc?

You need to get that debt paid off as soon as you can. Can ia so how you got the debt in the first place? Whilst not massive I wouldnt say it is insignificant.

Ashmeister_UK

Hi yeah that includes that there are 3 of us sharing. My company pays for my mobile phone and the broadband.

The loan debt is from a consolidation loan I did about 2 years ago. I had a humongous overdraft and a maxed out credit card that was just spiralling out of control.

The barclaycard debt is from a balance transfer from my other credit card, I had been using it for work expenses then gradually it seemed to build up, I also used it to pay for a holiday so that didn't help. I then started to pay off like a grand at the start of every month however found I couldn't get by the rest of the month without using it and so ended up living off the credit card and it just grew and grew, hence I've just done this balance transfer to keep the interest down whilst I try and pay it off gradually.

It just feels like it's never ending, I've had debt now since the age of 19 when I had my first loan to pay for a car and the insurance. It's just gone up and up instead of down.

nicp60

Hi Ashley,
From you've said it sounds like you're not really 100% sure on why you're in debt.
I would say that before you look at getting a mortgage you need to address your overspending. If you tackle this now, then you'll have fewer issues in the future. It'll give you more options and greater freedom if you can pinpoint what your expenditure is like.

If you've just set up the loan overpayment, does that mean that until now you've been spending the £900 left over from your salary and spending on the credit card as well??

I would be brutal and go through your bank statements and work out where the money has been going. You can then work out how to cut back.
£600 on food shopping for 2 is ridiculous. If your GF is spending the same, then there's a leak somewhere.

Your priority should be paying off the debt, but as you've said you want to save for a deposit, I'd set up some proper goals for this with your OH. I don't think the size of the debt will stop you from getting a mortgage (providing your history is OK), but getting a grip on your finances now will help you save a deposit a lot quicker.

If you use this: http://www.stoozing.com/calculator/soa.php and then paste it on here, you can get some great advice from the lovely people here.

Best of luck!