Debt advice, whats my best option?

Olie1988

Hello.

I'm after a bit of advice, to cut a long story short, I've got myself into some debt, and it's become quite a weight on my shoulders.

I want to be out of debt, I really do, but when I assess the situation, it becomes too much for me to bear. I suppose I should give a quick break down:

£4100 Lloyds loan (24.9% £132 p/m)
£1350 Lloyds overdraft. (about £20 per month, this fluctuates as my weekly wage of £325 is paid into this account)
£650 Lloyds C/C (rate unknown, about £25 p/m minimum payment
£2150 MBNA Credit Card (0% expires Feb 15)
£850 debt with EE (This is the least of my worries to be honest)


So there it is, I get by, but I never really seem to make any progress with paying it off.

I got into debt by living outside my means, and I'm confident that I have addressed my spending habits enough that I am at least living within my means now, but the weight of the debt is causing my huge amounts of stress (as I'm sure you can all relate to!), I seem to be watching everybody around me grow and progress their lives while I just drown in debt.

The ideal situation would be to put the entire £9000 debt under one low interest personal loan, but alas I can't get decent interest rates for love nor money. My credit rating is through the floor, thanks to my stupid decisions.

I have been looking into a debt consolidation loan, but I understand this may not be the best course of action.

What do you lot recommend?

Many thanks,

Olie

Orange_Ena

Olie1988 wrote: »

Hello.

I'm after a bit of advice, to cut a long story short, I've got myself into some debt, and it's become quite a weight on my shoulders.

I want to be out of debt, I really do, but when I assess the situation, it becomes too much for me to bear. I suppose I should give a quick break down:

£4100 Lloyds loan (24.9% £132 p/m)
£1350 Lloyds overdraft. (about £20 per month, this fluctuates as my weekly wage of £325 is paid into this account)
£650 Lloyds C/C (rate unknown, about £25 p/m minimum payment
£2150 MBNA Credit Card (0% expires Feb 15)
£850 debt with EE (This is the least of my worries to be honest)


So there it is, I get by, but I never really seem to make any progress with paying it off.

I got into debt by living outside my means, and I'm confident that I have addressed my spending habits enough that I am at least living within my means now, but the weight of the debt is causing my huge amounts of stress (as I'm sure you can all relate to!), I seem to be watching everybody around me grow and progress their lives while I just drown in debt.

The ideal situation would be to put the entire £9000 debt under one low interest personal loan, but alas I can't get decent interest rates for love nor money. My credit rating is through the floor, thanks to my stupid decisions.

I have been looking into a debt consolidation loan, but I understand this may not be the best course of action.

What do you lot recommend?

Many thanks,

Olie

Hiya, welcome to the forum.

I think its worth filling out an statement of affairs so you can get a better idea of your situation http://www.stoozing.com/calculator/soa.php (format for MSE). People can then advise the best way of tackling the debt and maybe making some savings to allow you to throw extra money at it.

Once you've done that then there is a snowball calculator that you can work out in which order to tackle the debt.

Other options include a debt management plan (DMP) but I don't know much about that. I'm sure someone will be along that can explain more. Consolidation may not be the best course of action, you're right. Filling out the SOA is probably the first course of action.

Good luck

Olie1988

Hi thankyou, I think it's probably good to be in a place where I'm surrounded by people who know how it feels to be where I am, I guess from your signature you've been in my shoes before haha!

I've done these SOA's before, and I'll do the one in your link when I'm on my own pc (with Excel). The problem I always find is that I don't put things like 'new clothes' in the SOA, but I suppose if the idea here is to paint a picture of my lifestyle, it's best to be completely honest?

Orange_Ena

Oh yes, I'm in debt, but its going in the right direction now thanks to the lovely people on here.

Be totally honest with your SOA. And put in everything you can think of. If you have yearly bills, then just divide by 12. If you have a coffee or newspaper here and there, add that in too. Once everything is listed, its easier to see where you can make cut backs. Even if you save £10 on reducing a phone tarriff or other bill, that's £120 a year to pay towards debt or whatever!

For me the little savings on all my bills added up to £180 per month. And none of that was a sacrifice. I don't miss cable telly, freeview is enough for me and I saved £45 a month. Make every penny a prisoner :rotfl:

Olie1988

Haha, well I shall certainly have a go!

I think I touched on this, but I have addressed a lot of my spending habits.. (20 Marlboro a day. far too many take aways, far to many daily treats etc)

I've cut down to spending £8 a week on cigarettes from £8 a day, I have 2 take aways a week instead of about 16 (yes 16 haha)

So I think an SOA based on my current spending may be a bit misleading, as I was far worse 3 months ago.

I certainly feel as though I've done a lot of tightening my belt these last couple of months, still seems to be too much month left at the end of the money though!

Orange_Ena

Olie1988 wrote: »

Haha, well I shall certainly have a go!

I think I touched on this, but I have addressed a lot of my spending habits.. (20 Marlboro a day. far too many take aways, far to many daily treats etc)

I've cut down to spending £8 a week on cigarettes from £8 a day, I have 2 take aways a week instead of about 16 (yes 16 haha)

So I think an SOA based on my current spending may be a bit misleading, as I was far worse 3 months ago.

I certainly feel as though I've done a lot of tightening my belt these last couple of months, still seems to be too much month left at the end of the money though!

16 takeaways a week?! :eek::eek::rotfl: I think there maybe still a little room for improvement but well done on cutting down on 16 takeaways a WEEK! :T:D

I think this is where snowballing comes in. Once you've paid off one debt, use that money to pay down the next debt. If you've been without that bit of money, you won't miss it but it will make a difference to clearing the next debt, if you see what I mean.

There's always too much month left at the end of the money............if you don't budget and stick to it. :rotfl: I'm fairly new to budgetting and I have several online saving pots (for diesel, house insurance, hair etc) that I put money into when I've been paid. Once all my DD's have gone out, what's left in my current account is for food and random spends. Some of those saving pots will be down to zero by the next month (any surplus goes on debt repayment) and some will grow until I need them, like my house insurance or line rental. I've only been doing it 4 months but so far its working. Because the money is separate, I keep my paws off it. Although I can easily move the money across to my current account so there is a certain amount of willpower

Olie1988

Haha, the funny thing is 16 was probably an understatement.

I was living with my parents, and it wasn't a nice place to be for me, me and my Dad argue quite a lot (get on like a house on fire now I've moved out, mind you!). Anyway, I would basically spend most of the week staying at friends, doing anything I could to not be at home. Most weeks I'd probably only have 2 or three meals at home, the rest were all take aways!

The problem is I do genuinely just love stuffing my face, but since I've moved out I have been going food shopping on a Monday and that seems to be saving me an absolute fortune. I quite enjoy getting all the bargain meat and that actually, to be honest haha!

I just have chips & gravy from the work canteen most days for lunch (70p). I do find myself having a couple of takeways whilst out and about at the weekend, but I feel that should be allowed after a 40 hour week haha.

I will have a go at the SOA and see if anybody can advise me further, but I genuinely feel like my life is pretty empty as it is, as far as nights out and hobbies are concerned.

My only real hobby is playing with, and driving cars. I have had a few (extremely depressing) months 'out the game', but all this has done is confirm to me how much I need cars in my life haha.

Orange_Ena

I love a bit of yellow sticker shopping! I got 5 packs of Tesc0 finest bacon that was £3.15 down to 35p :T Bargains like that defo work out cheaper than takeaways, and probably much tastier.

70p isn't bad at all for a dinner. Saves all that electricity too. Win win! When you work out your budgets, factor in your weekend takeaways. It all adds up!

Getting into debt didn't happen overnight and getting out of it might not be quick either. The more sacrifices we make, the quicker we can get debt free and get on with our lives. But then, taking the scenic route might make our lives just that bit nicer, but the debt hangs around longer.

I've made a few painless sacrifices and I'm happy with that. I know I could do better and could be debt free in the next few months, but my scenic route at the moment is good enough and if it takes a few months longer then so be it. You've done the hardest bit by posting and asking for advice. In time you'll work out how you want to play it.

Good luck to you

Olie1988

Thankyou very much for the words of support, I'm sure talking to people like you will be a huge help

Slightly off topic, but I was reading an article about how Facebook is depressing, due to the fact that everyone only shares the positives of their lives, leaving you with a feeling that your life is somehow worse than everyone else you know. I'll admit I am susceptible to this physiological trap, but it's refreshing, and comforting to be in a place where people are so open about their debt problems.

Having a look around this forum has made me feel like maybe I'm not such a lost cause after all haha, hope that makes some sense!

Anyway, I'm deffo with you on the yellow labels aha!

I saw Pizza Express pepperoni pizzas in Tesco for 15p the other day. I bought 15 of them! That was a mighty cheap week :P

Thanks again

Orange_Ena

Olie1988 wrote: »

Thankyou very much for the words of support, I'm sure talking to people like you will be a huge help

Slightly off topic, but I was reading an article about how Facebook is depressing, due to the fact that everyone only shares the positives of their lives, leaving you with a feeling that your life is somehow worse than everyone else you know. I'll admit I am susceptible to this physiological trap, but it's refreshing, and comforting to be in a place where people are so open about their debt problems.

Having a look around this forum has made me feel like maybe I'm not such a lost cause after all haha, hope that makes some sense!

Anyway, I'm deffo with you on the yellow labels aha!

I saw Pizza Express pepperoni pizzas in Tesco for 15p the other day. I bought 15 of them! That was a mighty cheap week :P

Thanks again

I think it definitely helps talking to other people about debt problems. I've got one friend that I talk about debt with, she's in the same boat although somewhat buried her head in the sand. Every other word that comes out of my mouth is MSE this and MSE that so hopefully I'm slowly getting through to her. Subtle as always

I read something about FB too recently and about people are either attention seeking or making themselves feel better by making everyone else feel worse about their lives. Wonder if it was the same article? I've got friends that post numerous times a day and its all carp! I wouldn't want their lives anyway :rotfl:

I've always been a lurker on here but its nice to be a part of it. And I feel a renewed energy for money saving and setting myself more targets! Keep posting away, its all good support.

Course you're not a lost cause! You're up on a lot of people out there with debt problems - you've found MSE. And the wonderful :money: always says that there's no money problem that can't be solved.

Jealous of your bargain pizzas. I bet buying a takeaway pizza from D0min0es is never that cheap

All the best

Olie1988

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1408
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1408

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 350
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 130
Clothing................................ 20
Petrol/diesel........................... 100
Road tax................................ 20
Car Insurance........................... 30
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
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)...... 10
Haircuts................................ 5
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Beverages............................... 80
Take Aways.............................. 60
Smoking ................................ 43
Total monthly expenses.................. 1098


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
Loan ..........................4116......132.......24.9
Lloyds CC......................651.98....18........20
MBNA CC........................2167......20........1
Lloyds Overdraft...............1350......23........10
Total unsecured debts..........8284.98...193.......-


Monthly Budget Summary
Total monthly income.................... 1,408
Expenses (including HP & secured debts). 1,098
Available for debt repayments........... 310
Monthly UNsecured debt repayments....... 193
Amount left after debt repayments....... 117

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -8,284.98
Net Assets.............................. -8,284.98





I feel I must make a few comments on this though, I am unsure of the interest on my Lloyds credit card and overdraft, however the payments are correct.

The petrol/car related costs are also a bit of a guestimate too, I don't have a car at the minute, but am in the process of inheriting an old BMW from my father.

I know how that sounds, but cars are my only interest in this world! Driving them and working on them is my only hobby. I sold my last car to try to save some money, but I really can't be without one, it's killing me not having something to take apart aha

Anyway, I now live 5 minute walk from work, so the car will be used only for weekends. Also due to it's age (1988) I can insure it on a classic policy, which is £600 a year cheaper than my last cars insurance

Anyway, like I say the costs of that are a bit of a guess. I didn't put anything in the 'car maintenance' section, as I figured because the car is maintained as a hobby, the money for this comes out of my 'entertainment' haha.

I know I still spend a lot on take aways, but as said above I used to literally live on them, a big portion of my debt is probably in the Colonel's till to be honest haha. I've cut down from 16+ take aways a week to 2 at a push, and these are usually at the weekend when I'm at friends or something.

Again, smoking, I used to smoke 20 Marlboro Reds a day (£8.50 a day), now I've cut down to rollups I get through 2 small packs a week (£8 a week) I'll sometimes still buy 20 Marlboro at the weekend if I'm feeling flush.



As said previously my debt was brought on by living outside my means, I used to have a car that cost me £1600 a year to insure, for example. And generally I am doing much better with making ends meet.

I guess I am more after advice the most constructive way to pay it off

Sorry for the huge ramble aha

Olie