Confessions of a 26 year old in £38'000 worth of debt !!! Please help me !

OnwardAndUpward81

Ok, I've never told anyone how much debt I'm in as I'm totally ashamed. I recognise that I need help and from today will take steps to clear my debts but I really need more help. I currently earn £1150 a month which is clearly not enough to clear my debts. I live with my mother and two sisters and she doesn't work so I can't possibly tell her the state I'm in.

My first step for clearing my debts today is looking at getting freeview boxes instead of paying monthly, changing my mobile phone tariff and writing down everything I spend. Oh yes, I have started selling bits in ebay.

I guess I should tell you what my debts and outgoings are:-

Loans and Credit Cards

Student Loan : £10858.85
Personal Loan: £20754.72
Credit Card: £3904.11

Bank balances

Graduate account - £1600 o/d
Current account - £876.18 o/d
Savings - ZILCH, NIL, NADA, NOTHING, ZERO

Mandatory out goings

Mobile - £50 monthly
House Phone and TV - £65 monthly
Car Insurance - £88.22 (it's expensive as someone crashed into to me and it's currently still being resolved)
Lottery Syndicate - £9 monthly
Personal Loan monthly- £494.16 monthly
Credit card monthly- minimum payment £50.00 monthly
Tube Travel monthly- £127 monthly
Food shopping - £100 monthly

Hope you can help, I'm open to all criticisms and advice.
Miss Debt

steve700

Welcome to MSE

The bank balances are in credit, are they - i.e. £2476.18 in Credit....

How come you haven't included a monthly payment to your Student Loan?

Can you not sell your car as you use the Tube so much (and pay £127 for the privilege)? That would save you insurance plus petrol (which you don't appear to have included) and whatever cash you get for the sale of your car.

My initial thoughts are to:

a) stop paying for Lottery

and

b) get a Pay As You Go Mobile - send texts instead of making calls (or let others call you).

There will be plenty of other people along to help but that would give you about £500 a year towards your debt if you use your mobile sparingly.

Good Luck

Steve

GettingThingsDone

Hi Miss Debt - welcome to MSE

Do you have anything you can ebay or any other ways you can think of for raising some cash?

gtd

smudgemanc26

Miss_Debt wrote: »

Ok, I've never told anyone how much debt I'm in as I'm totally ashamed. I recognise that I need help and from today will take steps to clear my debts but I really need more help. I currently earn £1150 a month which is clearly not enough to clear my debts. I live with my mother and two sisters and she doesn't work so I can't possibly tell her the state I'm in.

My first step for clearing my debts today is looking at getting freeview boxes instead of paying monthly, changing my mobile phone tariff and writing down everything I spend.

I guess I should tell you what my debts and outgoings are:-

Loans and Credit Cards

Student Loan : £10858.85
Personal Loan: £20754.72
Credit Card: £3904.11

Bank balances

Graduate account -£1600
Current account -£876.18
Savings - ZILCH, NIL, NADA, NOTHING, ZERO

Mandatory out goings

Mobile - £50 monthly
House Phone and TV - £65 monthly
Car Insurance - £88.22 (it's expensive as someone crashed into to me and it's currently still being resolved)
Lottery Syndicate - £9 monthly
Personal Loan monthly- £494.16 monthly
Credit card monthly- minimum payment £50.00 monthly
Tube Travel monthly- £127 monthly
Food shopping - £100 monthly

Hope you can help, I'm open to all criticisms and advice.
Miss Debt

Hi and welcome dont panic your in the right place there are lots of people on this board that will be able to help you.

So your total debts are: £37993.86

Your Incomings are: £1150.00

Your monthly expenditure is: £983.38

Money Left: £166.62 (what do you do with this extra money?)

Have you accounted for everything on this SOA?

Things that stand out to me are your food bill do you all pay £100 per month? Its seems quite high you can check out the OS (old style) board for ways to make home cooked meals and freeze things.

House phone and tv - Reduce this to freeview as you've said or go on a lower deal with sky or virgin

Why do you have a car and pay travel money for the tube?

Reduce your mobile to pay as you go or get on a cheaper tariff.

HairyHandofDartmoor

Hi. I agree with Steve, the lottery is a waste of money, get pay as you go on your mobile (mine costs £10 per quarter at the most) and use your mobile only for emergencies, and get freeview as you suggest. I have freeview and there are loads of great programmes to watch (why line sky's pockets?).

Your food bill doesn't seem too bad but I bet you could reduce it even further by buying value brands and only buying what is on special offer. With the money you save increase your debt repayments.

Finally, consider getting a second job at the weekend or evenings to speed up your debt repayments.

hypno06

Hi there!

Also, apart from cutting back, have you addressed the reasons why you got into so much debt originally - was it through continuing overspending, a one off disaster, an addiction of some sort etc?

The cutting back will only work if the spending has stopped and the temptation to spend has been addressed.

But you have taken the first step on your journey to becoming debt free. Keep posting and you will benefit from lots of support on this site.

fistfullofdollars

If you student loan is taken PAYE and is to the student loans company forget it!

Treat it like paying another £30 NI or pension. Dont beat yourself up about this as its not on your credit file. Yes it is borrowing of a sort but as the interest is so low its not a priority (for me anyway).

There we go. Reduced your debt by £10k in 7 posts arent we good!

Steel_2

I agree with HairyHandofDartmoor - you have to look at ways of increasing your income as well. Cutting back is not going to be enough.

My advise though is pretty much like everyone else's.

Can you work your !!!! off and get a pay raise? How feasible is it for you to take on a Saturday job or evening bar job - it could be a vital bit of extra cash you need to begin throwing at your debt. What work do you do at the moment? However, beware! Once you hit income of £1,250 a month you will start to have to pay back your student loan so try to keep under this if you can.

A few extra things to consider:

1. Are you paying loan protection insurance on any of your loans? If so cancel straight away, which should bring some of your payments down.

2. Have you claimed back any bank or credit card charges you've been hit with for unauthorised overdrafts, declined direct debits, going over your C/C limits etc etc?

3. As other's have said, switch to a pay-as-you-go phone and then only use
it for emergencies. You could probably get that £50 a month down to £10

4. Cut down the food bill a bit - cook from scratch, take your own lunch to work, don't buy take-aways any more etc etc.

5. If you take the tube a lot, do you have a monthly travelcard? Could you ditch the car for a few months and travel by tube etc? Also I don't see petrol or taxes anywhere on your list of expenses?

6. As you live at home with two sisters, I take it they pay other expenses in the house like gas and electric etc?

7. As others have said, ditch the lottery syndicate. How often have you won anything from it compared to how much you're spent on it?

8. Start preparing and planning for how you are going to afford Christmas now - if you wait until the silly season is here you'll end up stashing more money on your credit card.

OnwardAndUpward81

steve700 wrote: »

Welcome to MSE

The bank balances are in credit, are they - i.e. £2476.18 in Credit....

How come you haven't included a monthly payment to your Student Loan?

Can you not sell your car as you use the Tube so much (and pay £127 for the privilege)? That would save you insurance plus petrol (which you don't appear to have included) and whatever cash you get for the sale of your car.

My initial thoughts are to:

a) stop paying for Lottery

and

b) get a Pay As You Go Mobile - send texts instead of making calls (or let others call you).

There will be plenty of other people along to help but that would give you about £500 a year towards your debt if you use your mobile sparingly.

Good Luck

Steve

I’ve amended the original post as the bank balances are overdrawn. I haven’t started paying of my student loan yet. I have considered downgrading my car but I’m not sure I can live without one, I know you might be thinking that I’m not taking your advice but I’ve relied on cars for 7 years and it would be hard to suddenly not have one as I’ve use it so much, I use my travel card for work only. Listening to your advice though downgrading my car will help me substantially and is something I'm going to do as it makes so much sense. I’ve looked at other tariffs and my upgrade is due next month so I’ve looked online and spoken to T-mobile and I’m thinking of the flext 35 (£35) tariff. I’m being totally honest and know that I will end up constantly putting credit on my phone, I know I will. As for the lottery, there are 20 of us that do it and I’ve received over £500 in the last two years so I’m in two minds as to whether I should cancel the S/O or not.

I really hope you haven’t read this and think I’m not listening to you because believe me I am as your help and advice has got me thinking.

Thanks so much steve

OnwardAndUpward81

GettingThingsDone wrote: »

Hi Miss Debt - welcome to MSE

Do you have anything you can ebay or any other ways you can think of for raising some cash?

gtd

I've started selling items on ebay and in the past I've always ended up going back on Ebay and buying. However, I'm trying my best to stop and I've only made one purchase of the site in a month (two concert tickets which totalled to £91, tut tut).

I'm going to try and get a weekend job which will be hard because I work an hour and a half away and work long hours and will be going back to uni end of Sept but it's something I need to do.

climbgirl

Miss_Debt wrote: »

I know you might be thinking that I’m not taking your advice but I’ve relied on cars for 7 years and it would be hard to suddenly not have one as I’ve use it so much, I use my travel card for work only. Listening to your advice though downgrading my car will help me substantially and is something I'm going to do as it makes so much sense. I’ve looked at other tariffs and my upgrade is due next month so I’ve looked online and spoken to T-mobile and I’m thinking of the flext 35 (£35) tariff. I’m being totally honest and know that I will end up constantly putting credit on my phone, I know I will. As for the lottery, there are 20 of us that do it and I’ve received over £500 in the last two years so I’m in two minds as to whether I should cancel the S/O or not.

I think you need to start thinking more outside the box. £35 for a mobile phone tariff is far too high when you have the debt levels you have! And saying that not having a car suddenly would be hard after 7 years....well, I'm sorry but that's not a reason not to get rid of it. Yes, it's going to be hard but paying back £38,000 isn't going to be a walk in the park. In fact, it may very well end up being one of the hardest things you do.

You have to start making some radical changes here to get rid of that debt. You simply can't afford to be spending £35 a month on a mobile, even if it is a reduction from what you already spend.

I'm sorry if this seems harsh but I think you need to make a lot of radical changes here. A few years of working every hour you can to get more money and cutting ALL unnecessary spending while you're young and you can clear these debts quickly.

Cancel the lottery - you've spent over £200 to get that £500, which is a pretty good return. But it's not guaranteed and I think you're better off quitting while you're ahead.

Have you addressed the reasons why you got yourself into so much debt in the first place?