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

webitha

hi there and good luck on your road to financial freedom
one thing that i reccommend is to keep a spending diary for a month write EVERYTHING in it that you spend day by day inc choc bar chewing gum etc then you will soon notice where you can save money
have you started taking packups to work? re PAYG virgin gives you 300 texts and 300 mins every month for £10 you can also get your tv landline broadband and mobile with them for £40 so that should help
why does your mum not work? if your younger sisters are both at school could she not get at least a part time job
and i would recondsider telling her about your debt yes she maybe upset but if she knew then she will realise that your trying to get rid of it and wont mind if you say no IYSWIM

dont forget your spending diary :money:

firesidemaid

well done on you for taking the first steps, and good luck with your masters!

i know what you say about your car and phone - i'm just going to mention a few options without meaning to get at you.

the only times i haven't had a car is when i have lived in cities - london and bristol. there are always tubes and night buses (and i lived quite a way out).
think of it this way - if you add up all your car and basic running costs, over five years you will be spending out £8520! can you afford not to get rid of it?

re: phones etc. you can also get sky tv, broadband and phone (line rental £10 with bt still) for £26. this includes unlimited evening and weekend calls to landline, which will save on your phone bill.

if you click on the 'sticky' at the top of the phones board there are also other ways to make cheaper calls. calls to mobiles with 18185 are 6p/min day and 2p/min w/end ?eve too)

there is a way to get a completely free mobile phone service if you can be a bit disciplined. people post here on the phones board, or on hot uk deals (or u can check for yourself) when mobile phone cos eg. carphone warehouse, phones4u etc online do deals where you pay so much per month Eg. £35 tariff and then can claim all the money back at 3 monthly intervals.

you must write down/be aware of when to send the info back to make sure u get the money back. that would be another £2100 over 5 years. look! nearly £10,000 saved already! this is how i look at it, as it will take you at least this long to pay it back - much longer if you can't.

as for every potential purchase you make, think: do i need this? can i afford this? can i get it cheaper anywhere else?

start buying for christmas now, in sales etc. get martin's the money diet - it's about getting a quality lifestyle for much less money.

and remember, anything will sell on ebay - old phones, broken electricals - there is a thread on here - 'things you thought you could never sell on ebay'. i even sold my OHs unused nicotine patches etc!

good luck x

poodlehorse

Do what you can at the moment and I believe that sometimes LBMs happen in stages. You get the first one but you still hold on to some things you can't live without etc but then once you are into the swing of it you have another epiphany. Doing something is better than doing nothing although let's face it unless you take the radical course of action it is just going to make a long hard slog even longer and harder. You might feel you are never making progress. What I found helped me was treating it like a game with each month trying to save that bit more, shaving a bit more off the shopping etc. That kept the fun in it for me.
However, I appreciate you don't want to worry your mum but as a parent now myself I have realised mum's just worry fullstop. If they don't know there is something to worry about they worry about what it is they dont' know they should be worrying about. They must do some procedure when they cut the cord that makes this happen as I think it is pretty universal. But I think your mum would be happier knowing and then you can tackle this as a family. I am sure she will be a bit shocked at the amount but you know what you have got into that debt with their help in a way as you are helping to support that family. They need to be a part of the solution. Thinking about telling her will be a lot worse than the reality. Even if you don't tell her the extent of the debt you can at least let on that there is some and there have to be some cutbacks. Also are you in control of doing the shopping or just hand over the money to your mum? Could you sit down and work out a menu plan together and write a list of what is needed and you can go and get it so you are in control of no extras going in the basket? If you don't normally cook from scratch as a family then this could be under the guise of getting healthy. learning to cook and teaching your sisters. And you could take leftovers to work. Sorry this is long but I am just throwing a lot at the wall and seeing what sticks iyswim
Also what about something like direct selling. I know you usually have to pay something out to start with but maybe you could save up your £2 coins until you have enough. I think Virgin Vie do a system where you can just distribute the catalogues on behalf of a consultant and you get a cut or soemthing so less of a committment from you and you might find it is easy to pass round your colleagues/new uni friends/old friends to get enough to at least get your Xmas pressies sorted.:grouphug: That is meant to be a group hug smilie and it was all I could find on here but it looks a bit pervy to me, apologies. But have a hug anyway. Baby steps will get you there.

DontDoDebtKids

Hi Miss Debt,

First off I'd like to say that you're not in £38,000 worth of debt. Your debts are:

[STRIKE]Student Loan : £10858.85[/STRIKE]
Personal Loan: £20754.72
Credit Card: £3904.11
Graduate account - £1600 o/d
Current account - £876.18 o/d

Total: £27,135.01

Your student loan shouldn't be considered a debt. Really. Consider it a tax as it's so cheap that you would make more money paying the amount into a high-interest savings account than you would paying it off. In fact, you aren't even paying it off yet so ignore it. It just distracts you from the expensive debt you have.

You do have to sort out your overdraft situation. I'd probably start here as these are likely to be your most expensive debts.

My advice, nothing fancy, is:

1) Start a spending diary. I was reluctant to do this but it is essential as it can stop you spending (e.g. you know you have to write in the book if you buy something, so you think again and don't) and it helps track where the "surplus" money goes.

2) Work up a budget. This I left for ages, but this step is essential if you are to take control of the situation. Martin has a good article on budgeting on this site, and a handy spreadsheet you should use. Data from your spending diary will help here too. Once you have a budget, you can put aside money you need to have for big bills (e.g. car insurance) into an instant access savings account so you don't spend it by accident.

3) Consider alternatives to paying £50 (or £35 - still too high) a month for your mobile. Everyone is suggesting PAYG. I would also consider getting rid of it all together, or a cashback scheme or even one of those contracts that pay you for receiving calls (see the 3 PAYG offer and www.noodle.co.uk). I think you want to keep this so then you have to figure out the most money-savvy way of running it! Research, research, research.

4) Learn to cook. This was actually really good fun and I cook everything from scratch now. It turns out that it is also much much cheaper. Also, start a meal planner for the week as this really cuts down on wastage - I hate chucking away food and now it almost never happens.

5) The car. I need mine to get to work but you don't so it's a luxury - remember this! Consider getting a bicycle instead? Or a cheaper car? It seems to me that you won't get rid of this either so you're going to have to come up with a clever solution here too! I'm not sure what to advise, but you need to try and minimise costs.

Once you've done the above, work out how long it will take to pay off your debts. Then start to earn some extra money to pay them off:

1) Mystery shopping
2) Quidco
3) Matched betting
4) Second job
5) etc.

Also, I think you'll be better off in the long run if you 'fess up to your Mum - but do it with a plan in hand and having made a few first steps.

Another thing, perhaps you should move to a better bank account - e.g. Alliance & Leicester do a 0% overdraft which will make it easier to pay it off.

DDDK

EdCov

You have had a lot of advice, so I may have missed this one. I had flext 20, I told t-mobile I would not renew because I was only prepared to spend a £5. They said no the least we could go to is £8. I said I could get it free with cashbacks but they were a pain and I was prepared to spend £5. They said no. I said give me my PAC. They said okay you can have it for a £5. Flext 20 gives you 170 minutes or 340 texts. If you can stop when the inclusive runs out it may work out a cheaper deal than PAYG.

Look at your whole life. You are consuming a lot that you do not need to. Assess how you can have fun without spending money.

My advice is have a diary of your spending(as others have suggested). Then each week go through it and work out what you can do better. Take the first week as a starting point, and then celebrate every pound you save.