21 and in debt - Help me!

Weird_Nev

Hey,

I can see a few 'problems' with your SOA as it is.

1) It's unrealistic. You're honestly telling me that as a 21 year old apprentice you don't spend anything on clothing, going out, entertainment, computer games, booze, haircuts, holidays? You HAVE to be honest about your expenses. Clearly, you have a car that uses fuel and needs to be insured. However, it apparently doesn't need servicing, oil, tyres, or repairs, ever? This needs ot be planned and budgeted for because it WILL happen. A car needing brakes or tyres or a service is no an unplanned emergency, it's an expected expense.

2) You have not put APR's next to your debts. You have to know the interest you are being charged so that you can prioritise your repayments to attack the most damaging debt first.

As for what you need to do:

Get hold of your last 3 months spending, online bank or old bank statements. Re-Do your SOA with what you've actually spent in the past, not what you hope to spend in the future. That will give you focus and show you where there are savings to be made.

Reduce your fixed costs. £70 phone a month is ludicrous. Do you even use the benefits that kind of plan gives you? See if there is any way to reduce that. You are spnding 6% of your yearly post tax income on a phone! Is £100 food realistic, and can it be reduced by taking sandwiches in to work and cutting down on butties, coffees, takeaways? You need to free up more money each month whilst living is cheap for you.

Find APR's for all debts and prioritise them. Speak to your dad and ask if he's happy to defer payments whilst you tackle the costly debt first. think you've incorrectly listed them as secured debts. Typically, loans are unsecured debts since they're not leveraged against a car or home.

Anyway, this isn't insurmountable but I think you really need to get an accurate graps of where you are spending and the relative urgency of your debts to make a decent inroads into your situation. Once you have gathered that information you'll be in a much stronger position to make the spending changes you need to free up money every month and attack the debt.

asparagus1968

Agree with "weird nev" go through the advice there.

is your car only worth £200 ? but insurance is £115 a month?

do you have a massive commute to work? I do 1200 miles a month for about £230 a month

tell us more about the mobile phone....

MEM62

Have you looked at increasing your earnings?

How far are you into your training? Far enough to take on some freelance work?

My girlfriend is a QS and works freelance now she has kids. It is good money and you should easily be able to add a few hundred quid to your monthly income.

comeandgo

Hi I notice your fuel expenses are really high. Is your work related travel only to office and home? If your employer expects you to visit sites are you getting mileage for it?

mikegrainger

Hi weird nev,

I am currently in the process of reviewing my SOA as i agree it isnt very accurate to my actual spending, I have printed off my last 3 months statements and looks as if on average £50 a month goes on fast food! which for sure will be stopping

As for the high petrol costs it is because I drive from my house to work and then to my girlfriends which is about 30 mins away from my house nearly every night, plus taking her to and from work sometimes, this is something I have discussed with her and I am not going to stay at hers as often

Car Insurance - Car is 99 plate fiesta payed £350 for it only worth around £200 if I was so sell, insurance so high as I passed my test in August 2013 and crashed within 3 weeks

Phone Bill- iPhone 5 including insurance, which I do use a hell of a lot so I think that is worth the money, I have looked into reducing insurance but excess would be higher which is a shame

Extra Income- I am looking to start a market stall selling vintage clothing at the start of Feb which I know will bring in more income as I have done it before, but I have only just started training as QS so wouldnt be able to freelance just yet

Food- I think my problem is that I dont do a weekly shop, I just buy food either night before or when I am hungry, but I have recently become a pescatarian which is encouraging me to grow my own veg and prepare alot more meals, therefore saving more money

My finances are very muddled lots of transactions per month for food, lending money to girlfriend and friends, petrol, coffees, amazon/ebay purchases

Thanks for the advice everyone

mikegrainger

also 'comeandgo' i am paying for my own fuel to office and to sites which 'are not too far away'

MallyGirl

I would keep records of all site visits. Lots of 'not very far away's add up. Even if you don't claim, the tax man lets you have 40p per mile (for 1st 10,000) for using your car for business - you can offset this against your tax bill by doing a self assessment form. Make sure you have class 1 business insurance though or you could get caught out again.
Take a read of all the threads about lending to friends and family - you might want to stop after reading them as it often ends badly and you can't afford that.
Definitely find out your APRs and focus on the highest ones.
You have come on here before you got in too much of a mess so well done for that - make 2014 a frugal year and you can be debt free by Christmas.

mikegrainger

Hi mallygirl,

Could you give me some more details of the tax man giving me 40p a mile? or a link i could have a read through

I am insured through my company insurance

Thanks for the advice, Mike

MallyGirl

http://www.hmrc.gov.uk/mileage/employee-factsheet.pdf
and
http://www.hmrc.gov.uk/incometax/relief-mileage.htm

and it now seems to be 45p per mile.

This wouldn't give you any money back immediately but say you did 1000 miles over the year, you would have been able to receive £450 in mileage benefits according to HMRC. If you get none from your employer then this can be taken into account in your tax code so that you get 20% of £450 off your tax bill for the year. Worth doing if you aren't claiming the mileage.

tiger_eyes

mikegrainger wrote: »

Food- I think my problem is that I dont do a weekly shop, I just buy food either night before or when I am hungry, but I have recently become a pescatarian which is encouraging me to grow my own veg and prepare alot more meals, therefore saving more money

OK. Forward planning is your friend here. If you come in from work hungry and there's no food, you're already in a bad position to make food choices because the hunger is making you irrational. It's easy to pick up the phone and order fast food, and that hits you directly in the bank account.

A good food shopping strategy means you always have a range of food in the house, but without wastage. Plan for a regular big shop, perhaps once a week or once a month depending on how much freezer and cupboard space you have, with the occasional topup of eg. fresh milk. And never shop hungry. If necessary, eat before you go to the supermarket.

I find it helpful to routinely cook enough food for several people and freeze the excess in single servings. That way if I come in hungry, I can grab a homemade meal from the freezer and nuke it in the microwave, and in a few minutes I'm eating.

Just a few thoughts.