Advice for a newbie? Am I going about this the right way?

bealski93

Hello everyone

I'm a student who over the past year or so (I'm a second year) has managed to nearly max out their (thankfully interest free) overdraft which is £750 through stupidity/nights out/eating out. I also have £280 on a student credit card (!) which I should have never taken out, which was mainly used on christmas presents and for parts to fix my laptop. So I'm £1030 in debt :eek: not including student loans. I'm a frivolous spender and learning to manage my own cash the hard way. That being said, I did manage to save before uni and I work FT in the holidays and PT term time.

Monthly Income:
£230 - Combination of own savings from year of FT work before uni and parental contribution - I don't have access to this cash apart from a monthly DD from parents.
£150 - PT job at Student Union (term time only and this is approximate depending on shifts I get, but should always be at least this amount)
Total: £380

My student loan payment for this term is £1611.06, and straight away my rent is paid for the term which is £1360, leaving me with £251.06. Internet is included in my rent costs.

Monthly Outgoings (besides rent):
£35 Gas & Electricity (I share with 2 others in a new-build flat)
£20 Water
£32 Mobile Phone Contract (ends in March)
£16 Unlimited card for cinema
£140 Food
£30 Socialising

Total: £273

My bus pass, gym membership, and contents insurance were all paid up front at the beginning of the academic year. Therefore I should quite easily be able to clear at least the credit card quickly, though it will mean breaking some habits!

Plan:
-Write all spending down in diary and keep receipts for everything.
-Draw out £20 for 'silly spending' e.g. snacks on campus, magazines. Once its gone, its gone.
-Don't take bank card out on nights out (I'm not a big drinker, but I am the idiot that buys others drinks and attempts to keep up with richer friends)
-Take packed lunch every day to uni.
-When phone contract is to be renewed, look for a cheaper contract/sim only deal.
-Pick up extra shifts to earn more money to clear debt quicker.


I just have some questions:
1) Would it be more advisable for me to use the 'extra' student loan money to pay off a chunk of my credit card, or pay some off and keep a piece for emergencies?
2) Is my budget realistic-ish? I'm learning slowly.
3) Does anyone have any tips/advice/criticisms?


Thanks to anyone who made it this far and has advice they can give me on clearing this mess and sorting me out!

[Deleted User]

Post an SOA, including all figures, including APRs.

That'll allow the good folk of MSE to see exactly where you stand.

http://www.stoozing.com/calculator/soa.php

The_Green_Lady

Well done for facing up to this now. I left uni 20 years ago and am still paying for it. I wish someone had explained that to me then rather than my looking at it as free money. Much as I wouldn't change things for the world and I loved that time of my life I wish I hadn't wasted so much money! Look forward to reading about your journey x

bealski93

Thanks Bedsit Bob, will do that now And thank you The Green Lady and haha, unfortunately for me there was no way about going to uni without taking out maintenance loans, even with working FT for a year beforehand! My year's FT work covered/is covering my laptop, my travel pass for the 3 years whilst in uni, gym for three years, contents insurance, paying for the difference in loan/rent and lastly contributing to monthly expenses.

I'm trying to learn and put things at least a bit straighter before it gets any worse. Next academic year I'm going on placement where I'll be earning £14k for the year and I'll be moving again so my money situation will change, but I want to learn and sort things out now and stop wasting my money away!

SoA:

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 380
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 272.58
Total monthly income.................... 652.58

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 230
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 16
Gas..................................... 16
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 32
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 140
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
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)...... 15
Haircuts................................ 12
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 541


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
Student Overdraft..............750.......0.........0
Credit Card....................280.......7.........18.9
Total unsecured debts..........1030......7.........-


Monthly Budget Summary
Total monthly income.................... 652.58
Expenses (including HP & secured debts). 541
Available for debt repayments........... 111.58
Monthly UNsecured debt repayments....... 7
Amount left after debt repayments....... 104.58

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -1,030
Net Assets.............................. -1,030

Created using the SOA calculator


To calculate the rent (I pay it by term) and my student loan money (again termly) I added up this term (receive it on monday, pay rent on the tuesday) and next terms and then divided it by 12... I'm not sure how else to put it into the account (?)

Zoology_Dragon

Well done for dealing with this before it becomes a big problem, I wish I'd been as sensible as you when I was a student!

[Deleted User]

You asked about paying off the Credit Card.

Having seen the APR, I'd say clear it ASAP.

At your current £7pm, it will take you 62 months to clear it, and cost you £152 (more the half the current balance) in interest.

According to your SOA, you have over £100pm left.

If you had a very lean 3 months, and put £100 of that toward the CC (ie. a total of £107pm), you could clear the card in the 3 months, with interest of just £4.

If you also did without the presents, haircut, or entertainment, for just one month, you could be clear in 2 months, for £1 of interest.

I know not going out, for a whole month, would be hard, but it's only one month, and the CC debt would be dead and buried.

BTW. Any chance you can swap that £32 mobile bill, for a £10-ish SIM only/PAYG deal?

bealski93

Bedsit_Bob wrote: »

You asked about paying off the Credit Card.

Having seen the APR, I'd say clear it ASAP.

At your current £7pm, it will take you 62 months to clear it, and cost you £152 (more the half the current balance) in interest.

According to your SOA, you have over £100pm left.

If you had a very lean 3 months, and put £100 of that toward the CC (ie. a total of £107pm), you could clear the card in the 3 months, with interest of just £4.

If you also did without the presents, haircut, or entertainment, for just one month, you could be clear in 2 months, for £1 of interest.

I know not going out, for a whole month, would be hard, but it's only one month, and the CC debt would be dead and buried.

BTW. Any chance you can swap that £32 mobile bill, for a £10-ish SIM only/PAYG deal?

Thank you, wow you have put it into perspective really well! I think I could do this I won't be going out at all this month as I have a lot of deadlines to meet for university and I want to straighten myself out money-wise. None of my friends or family have a birthday this month and I can wait for a haircut so I think I'll go for two months.

I'm going to write down everything I spend, stick to university campus greengrocer for fruit/veg and Aldo for the other bits. No more on campus cups of tea or buying lunch! As for mobile bill, it runs out in March so intend on swapping it for a SIM only contract. Though could be worth calling them up and seeing if they'll reduce it?

Thanks for the advice, it is much appreciated

bealski93

Zoology_Dragon wrote: »

Well done for dealing with this before it becomes a big problem, I wish I'd been as sensible as you when I was a student!

Thank you I figured if I tackle it now whilst it isn't a huge problem I will learn to manage my money properly and keep doing so when I have far more things to keep track of

The_Moo

I'm impressed with your planning -wish I'd been as sensible as you when I was a student.

Could I suggest you give some thought to contents insurance and to setting money aside for dental appointments? You should have contents cover for your stuff, student flats and houses can be targeted for burglary or thefts as they tend to have a lot of portable high value items like iPods, laptops etc.

Very important to have regular dental checks to head off any issues before they become expensive and painful.

Good luck!

[Deleted User]

If you go PAYG, Virgin offers an excellent deal for £10pm.

120 mobile minutes and unlimited UK landline calls

OR

1GB of data and unlimited texts.

Plus, you keep your £10 topup as well.

The advantage of the 1st one is, no matter what happens (financially) toward the end of the month, you can still ring family, friends, etc., for help and/or reassurance.

AlexLK

Wow, I'm very impressed for you managing to do this as a student! It has taken me until I was 32 and over £350,000 (not counting my mortgage) to face up to the fact I'm terrible with money. Keep this up and you'll go far.

Unfortunately, I do not have any tips for money saving as your SOA looks extremely lean other than to say cut that mobile phone contract down a bit.