Where does all the money go?!?! £1,000 PCM...24 months to go!!

YoungBusinessman

Well I might require the forums help as early as this month. £2,500 in the bank going into September. £1,000 of the £37,000 is on credit card. Hmrc have just sent me a fine for £1,200 for a late self assessment return when iv never had to fill one out as I am not and never have been self employed. First court case is in a month. Feels like things are starting to get on top of me now....

Projected income for September is around £2,900 with expenditure being £2,400. Might make a minimum payment to the cc and try to "save" the £500 until court is over and done with. So solicitor upfront fee of £150 is due. Just don't want to run out of money, if I can make my debt payments of £1,350 each month plus some overpayments next year so it averages £1,500 a month then I could well be down below £20k with a little emergency fund behind me by the end of 2015. Right now I need to try and work this income up if I can so I have greater surplus left. Can't believe on the money I'm on I am living payday to payday aslong as I can pay all the bills through out winter il be happy, never missed any payments and don't want to start now. Feeling so skint. Need to sit down tonight and do a proper budget forecast so I can cut back where possible and make sure the debts get paid. £5,400 between now and the end of the year just on debt repayments makes me feel sick!!!

in_need_of_direction

You've done it so far so just stick with what you have been doing. The one thing I'd say is that you should immediately contest the tax office fine by recorded delivery.

gothrockchic1

Hi YB!

The first thing you should do is revise your SOA (you don't need to put it up here) prioritise what's more important. I would put money aside for the solicitors fees and then pay your credit card. You can always pay more later if you overestimate it (preferably before your next bill so less interest)

As for the fine just like In Need of Direction says contest it put it in writing and include evidence if you have some but take copies if everything you send and send Recorded Mail. Use the tracking system they have to see if it's been received.

You will get through this but at least you can come on here and get advice when it gets too much xxx

Lomcevak

Good luck YB, sorry you're going through a tough time

I'm £37k in debt, at 23% apr,

Ouch! That APR is truly awful, I know you are trying to set yourself up to attack it hard over 2 - 3 years but have you explored all the options for moving some or all of it to a lower rate and longer-term loan to give yourself some flexibility? You can always overpay in the future when things are less tight.

Personally with that size of debt at such a huge APR i'd ditch the motor, £11k finance is not what you need now and i'd guess the repayments for that are likely to scupper getting a more sensible loan for the rest of the debt. I know it's a major downer and you'll take a big financial hit from depreciation if you sell a brand-new car, but you'll take a bigger hit from that damn APR if you're paying it off over a couple of years. The move as much of the remaining debt as possible on to a longer-term, lower-rate loan, throw everything else to get rid of the tax man, solicitor, etc. to get things under control, then focus on overpaying and getting life back on track. You're in a rubbish situation but you'll get through it, you've already shown what you can do on the savings board and plenty of the rest of your life for a nice motor once this is past.


I know that the advice is to never turn unsecured debt in to secured debt, but with a

£90k mortgage on a £122k property

it might be worth chatting to a broker to see what's possible if you were to get rid of the car?

Good luck!

Mara_uk7

Look back at your post 31 , you mentioned self employed side earnings .. Maybe thats what HMRC are referring to ? Do you declare this for tax ?

Lomcevak

if I can make my debt payments of £1,350 each month plus some overpayments next year so it averages £1,500 a month then I could well be down below £20k with a little emergency fund behind me by the end of 2015.

Unless i'm missing something, you'd not get below £20k with that interest rate - at 23% APR almost half of your £1500 each month is going on interest, so over a year you'd pay £18k but only pay off about £10k of debt. So i reckon you'd be around £23k - £24k by the end of 2015, having paid around £10k in interest (obviously depends on exact figures here, they are just rough numbers). That's why the car's got to go and the rest of the debt needs to go to a lower rate - without the car and with a 10% APR loan (which is not a great rate, by any means) I reckon you could be down at around £10k by the end of 2015 instead with a much shorter path to freedom ahead.

YoungBusinessman

I appreciate all the advice and followers I have been cracking on with overtime just now to maximise income, October should be a high income month and see a decent 4 figure surplus.

I'm not ignoring the advice I'm being given but I'm keeping the motor. Without a decent motor for work I'm screwed as live in middle of nowhere and need a reliable 4wd motor for work. The motor is 0% interest. Iv checked now and i miscalculated it's actually 18% interest not 23. Which is still eye watering.

I just googled "snowball calculator" put in 37k debt min payments at £1,350 and interest rate 18% it came back with saying the debt total will be down to £23,400 at the end of 2015. ID like to think I could save along side that and pay a lump sum so get it down below £20k which is much more manageable and not so scary at £400/500 a month just in interest!!

Unless I can up my income to around £3,800 net a month so I can clear the debts in a year......I can see myself motivated enough to get nearer £10k than 20 by the end of next year. A day at a time, frugal living, maximising income, end of 2015 il be laughing....hopefully!!

I'm not self employed, I was planning on registering and doing own jobs in evenings and weekends. Didn't even get round to registering as upped my hours where I work just now. Sent off appeal to hmrc recorded delivery so here's hoping I don't have a £1,200 bill to pay them aswel!!! Nevermind, payday tomorrow and iv already paid the first £500 of £1,350 payments due for September.

Having the end goal of buying another property is helping inspire me, the £1,350 a month is still going to be used(hidden in savings though!!) as soon as I get it, But how much more satisfying will be it when I'm paying myself instead of the bank!!! Long way to go but it all starts with one smal step. Thanks for everyone's comments. Onwards and upwards.

girlatplay

YoungBusinessman wrote: »

...But how much more satisfying will be it when I'm paying myself instead of the bank!!!...

That's absolutely it! You have time on your side and you are very lucky to have that. Keep going

YoungBusinessman

Well sorry iv taken so long to come back on but normally post on my iPhone. Been off work for 3 days straight now due to weather so used it to try and sort my laptop with no experience of doing so previously.......and its running brand new!!!! Feel like its £400 saved!!! Also been doing a lot of skip runs and clearing out my house, feels so good when you get up in a morning and the house is tidy, same when you get in from work and theres nothing out of place. Once get all washing/cleaning done and into good habits its so much easier than letting it all build up and then it takes ages to get it done.....I don't sound like a 23 year old male, eh?!




Been working at the emergency fund(would like to get this upto 4 months ahead(before I throw everything spare at debts) so I have about 4k left to save before I can get into overpayment mode. With a bit of luck I can get to the emergency fund goal by the end of the year giving all surplus income to the debts next year. Bearing in mind I will have court costs coming end of November/December so will stunt the savings a bit!!


Doesn't really feel iv that much time on my side, was planning engagement before too long, looks like that will be on hold until 24+ so 2016!!


Such a horrible day. Away to play about with budgets/look at property for our next move to keep me motivated for the end goal once all this debt is finally gone!! Thanks for everyone who has pm'd and replied on here, absolute love the support you get on the forums, id go as far to say its better than it is IRL.

patman99

Good to see you are still here. You are on a long(ish) journey.