£46k in debt.....at 24.

MFW_ASAP

YoungBusinessman wrote: »

So £12k down off balance and save the same in an emergency fund, thats my 2015 goals.

Il be over on the savings board taking part in the "save £12k in 2015" thread, obviously itl be much harder for me with the debt payment alongside but i reckon il give it a good go.

Hello, I stumbled across your thread and worked my way through it. You have a big mountain to climb, but you seem determined to get there. Good luck!

One thing I don't understand is how you came to the figure of a £12k emergency fund? What sort of emergency are you expecting that would require that sort of expenditure?

Insurances cover most things like the roof blowing off, central heating boilers (if not covered by insurance) often just need a few parts rather than a complete replacement, etc. etc.

You mentioned that you live with your GF who is solvent, while I understand you don't want her to help with the debt, I'm sure that she wouldn't see you homeless if you lost your job.

If you are allowed overpayments on the debt and the interest rate on the debt is 18%, you're never going to be better off putting money into savings. In your position I think I'd look at getting a more realistic (i.e. much lower) emergency fund target and once you've reached that, dumping all your cash onto the debt.

P.s. have you looked at other ways to increase your income? When I was in debt I worked in a bar a couple of evenings a week and on a Saturday. This was like having a paid night out. My old Dad (78) supplements his pension by delivering newspapers each morning and at the weekend and it ads up to quite a tidy sum. Rather than walking the dog on the weekend and then going back to bed, perhaps walk the dog while carring some newspapers? The dog gets exercise and you make money to throw at your debt pot?

YoungBusinessman

MFW_ASAP wrote: »

Hello, I stumbled across your thread and worked my way through it. You have a big mountain to climb, but you seem determined to get there. Good luck!

One thing I don't understand is how you came to the figure of a £12k emergency fund? What sort of emergency are you expecting that would require that sort of expenditure?

Insurances cover most things like the roof blowing off, central heating boilers (if not covered by insurance) often just need a few parts rather than a complete replacement, etc. etc.

You mentioned that you live with your GF who is solvent, while I understand you don't want her to help with the debt, I'm sure that she wouldn't see you homeless if you lost your job.

If you are allowed overpayments on the debt and the interest rate on the debt is 18%, you're never going to be better off putting money into savings. In your position I think I'd look at getting a more realistic (i.e. much lower) emergency fund target and once you've reached that, dumping all your cash onto the debt.

P.s. have you looked at other ways to increase your income? When I was in debt I worked in a bar a couple of evenings a week and on a Saturday. This was like having a paid night out. My old Dad (78) supplements his pension by delivering newspapers each morning and at the weekend and it ads up to quite a tidy sum. Rather than walking the dog on the weekend and then going back to bed, perhaps walk the dog while carring some newspapers? The dog gets exercise and you make money to throw at your debt pot?

Good to see newcomers joining in with an input!! It does seem like a mountain but one step at a time, soon make it!! The emergency fund was just 4/5 months expenses including the £1700 debt! Enough to get ahead so not so much pressure on me, like right now i have December expenses in my bank but not alot more, while i am missing days at work due to the weather. Cannot work in frost, rain or high winds.

I agree she wouldnt see me homeless should i lose my job however i still hope it doesnt come to that. If i was to leave and go elsewhere, income would drop around 25% instantly then eventually get back up where its at now as new workplaces means learning their ways of doing what i do, if that makes sense!!

The debt will come down £12k over 2015 if i pay the £1700 a month, im going to save the £12k emergency fund and reassess the situation at the end of 2015, maybe pay half off the debts and keep £6k emergency fund. I get 2 choices if i pay of in lump, can shorten the repayment term or lower min payment(while being allowed to overpay upto £1700 total payment PCM, on a monthly basis, otherwise lump sum only)


Income is always maximised thats how income is at an average of £3,500 a month, the summer months i can work all day, everyday. I absolute love my job. I had a few holidays this year, however, i very much doubt i will have any in 2015 as i have to find a good place to put every last penny. Thanks for all the suggestions this far, means alot to get the support from other posters. In this for the long term as im facing a marathon although i feel like im trying to sprint already.

YoungBusinessman

Payday came and went on Friday, had a quiet weekend. Paid around £1,500 so current account sitting at around £2,850 with about £2,400 expenses still to come this month(looks like itl be a tight month!!) With another pay to come on the 19th would think that will bring around £2,800-£3,000(for 4 weeks instead of 2) So that will be Januarys expenses in there before the end of this month, still cutting it fine, need to get out of a payday-payday routine in 2015 and get the emergency fund built up. It currently sits at £300(havnt included this in the above amount), it needs to multiply 9 fold to get to a months expenses!!

Iv counted all my change out of my big beer bottle tub and its come to £645. Much needed boost for the current account!! Will get it paid in when iv got a chance, most likely to be Monday!!

HMRC are still chasing me for £1200 late tax assesment return fine, they have said if im still due it come April they will take it out my tax via change of tax code, is this right ? If so, any idea what % they will take out?

Dont know how id cope without these forums just now!! :beer::j

PinkPoppies

MFW_ASAP wrote: »

One thing I don't understand is how you came to the figure of a £12k emergency fund? What sort of emergency are you expecting that would require that sort of expenditure?

MFW_ASAP wrote: »

If you are allowed overpayments on the debt and the interest rate on the debt is 18%, you're never going to be better off putting money into savings. In your position I think I'd look at getting a more realistic (i.e. much lower) emergency fund target and once you've reached that, dumping all your cash onto the debt.

I agree with the above and I'm confused also. I appreciate that your debt is different to the majority on here, in that it can't be paid off and run up again in a dire emergency, but even still? In an ideal world most of us DFWs would all love a sensibly big emergency fund BUT the cost of interest on debt at 18% makes it a VERY expensive way of doing things? Especially when it is 18% on £46k? Eye watering levels of hard earned interest down the drain every month?

Don't get me wrong, I think you are VERY sensible to have some sort of emergency fund in your situation, but don't leave a whopping £12k in a savings account earning crap interest when it could be saving you a fortune reducing the interest you pay month on month servicing your debt??

I have no idea what your £46k court debt is for, but 18% sounds an impossibly high interest to charge that amount at? Who decides it and who manages the account as you are repaying???

PinkPoppies

Just re-read my post above and it reads a bit feisty...! Please read it in the friendly non-feisty tone it was written in!

in_need_of_direction

Basically they will decimate your tax free allowance until they recoup the money they claim is owed. Also means you are more likely to pay bigger amounts of higher rate tax. You need to get this sorted pre April.

YoungBusinessman

in_need_of_direction wrote: »

Basically they will decimate your tax free allowance until they recoup the money they claim is owed. Also means you are more likely to pay bigger amounts of higher rate tax. You need to get this sorted pre April.

I plan on getting it sorted before then just dont see why its so hard to get someone on the other end of the phone. Just speak to a machine/told to go on their website/left on hold until i give up. Will write to them this weekend, will i send it recorded delivery so i know they get it?

YoungBusinessman

PinkPoppies wrote: »

I agree with the above and I'm confused also. I appreciate that your debt is different to the majority on here, in that it can't be paid off and run up again in a dire emergency, but even still? In an ideal world most of us DFWs would all love a sensibly big emergency fund BUT the cost of interest on debt at 18% makes it a VERY expensive way of doing things? Especially when it is 18% on £46k? Eye watering levels of hard earned interest down the drain every month?

Don't get me wrong, I think you are VERY sensible to have some sort of emergency fund in your situation, but don't leave a whopping £12k in a savings account earning crap interest when it could be saving you a fortune reducing the interest you pay month on month servicing your debt??

I have no idea what your £46k court debt is for, but 18% sounds an impossibly high interest to charge that amount at? Who decides it and who manages the account as you are repaying???

Fiesty or not, im a big lad, i can take it!! Need all the advice i can get as got a fair journey ahead. It is a massive amount of interest and as far as im aware i have £20,400 of payments to make in 2015, £8,000+ of this will be interest. Not much i can do, my hands are tied and doubt id get credit off the bank with this hanging over me. My solicitor negociated this deal on my behalf as opposed to a jail term/harsher punishment. Im glad i have my freedom as when my solicitor asked what i value it at i said it was priceless, i wanted to avoid custodial sentence if i can. Now its over i felt a weight lifted instantly. Iv got some fight ahead to get through this debt but once its shifted, thats it, cant see myself in debt again(non mortgage anyway) My solicitor has said i can pay off lump sums if i wish to. So once i get a couple months expenses behind me il save a lump sum, hopfully make the first one by the end of summer.

Thanks for all the replies and PM's, good to know theres support out there.

copperjar

I think you should take some of the advice offered to you on here. Pay HMRC before you get in any more trouble and cut your proposed emergency fund by at least 75%! Are you really saving these amounts? And are your business plans for early retirement sound? I think you maybe need to get back to basics, focus on paying your massive court fine and the plans for your property and commercial businesses can be worked up properly while you're doing so. It all seems a bit frantic as an outsider looking in

Great to see you have ambition - use it to get the debt paid as soon as is physically possible!

Written before your post about HMRC. Glad you're paying it - but didn't you say you were going to challenge it as you've never been self employed?

in_need_of_direction

Def use recorded delivery