Any advice for a debt free wannabe

nlrenney

Hi all,

In the past I've been awful with money, and I'm just starting to get my life in order and would like some help/advice on how to get rid of my debts!

I have 2x credit cards, an overdraft, a very.co.uk account and I need to pay a friend back for a trip to Disneyland! It all totals up to a debt of £3,816.

Had a well paid job and was doing great at clocking myself out of debt, then lost it in the summer.
I'm currently doing an internship where I earn £60 a week, and a side job which brings in about £60.

Not sure how these are usually laid out, but here is a total of my income, outgoings and debts...

Income p. week intern £60
Income p. week farm £58.50
Total income p. week £118.50
Total income p. month £513.50

Rent & bills £452.00
Phone bill £40
Spotify £9.99
Barclaycard £33
Nationwide £25
Petrol £200
Food/fun £150

Total outgoings £909.99

Overdraft £800
Barclaycard £1,580.48
Nationwide £615.62
Very £439.43
Disney £380

Total Debt £3,816

Fairly clear to see I don't earn enough to cover my outgoings. My parents extremely kindly are subsidizing me, but obviously if I can reduce my outgoings any advice or ideas to increase my income, would be incredibly helpful.

Barclaycard & Nationwide are currently both on 0%, though Barclaycard that is only until April when it goes up to 23%. Both figures shown in my outgoings are the minimum payments.

£200 petrol covers my journey to work.

Spotify subscription is needed with me working in the music industry, I need Spotify available on my phone which is on premium only.

My phone bill is stuck at £40 until September.

I'm 21 so I'm unable to receive working tax credits. I have applied for housing benefits.

I live with my OH who is also on low income, though not as low as me.

Any advice would be amazing (excluding get another job). I'm struggling to see the light at the end of the tunnel at the moment!

twiggy86

Hi

Well done for posting on here!

£200 a month in petrol for jobs which bring in just over £500 seems disproportionate. Is there another way for you to get to work? Can you lift share, cycle, bus etc?

Food is an area which many people try and cut down on - do you meal plan, shop at the cheapest place, write (and stick to) a list, batch cook?

However "fun" - this is going to sound harsh but is there room in your budget for fun when you're nearly £400 a month short?

There is a Statement of Affairs somewhere which will help you consider other things which you may spend or should budget for e.g. road tax, insurance, mot, haircuts, clothes etc. I'm sure someone helpful will come along and post a link!

Good luck!

Tixy

Hi and welcome to the forum.

It is going to be really tough until you finance improves - and may just be a case of treading water until your income changes.

Do you have a set amount of time that you will be doing the internship? and is that then likely to lead to a paying job?

Are your parents subsidising you for the whole £400 shortfall currently? or are you reusing credit / still spending on your cards?

Have you factored in the other running costs of a car? insurance? tax? mot / servicing etc?
Is running a car the cheapest way to get to your work and placement? would public transport be feasible/cheaper?

Have you been through all the items in the 'rent & bills' figure to see if you are on the cheapest deals - e.g. have you checked your utility costs/contents insurance/landline & broadband are competitive deals? Is the rent cost competitive for the area?
Is the £452 50% of the total rent & bills? or is OH paying more (or less) than you?

If this is likely to be a longer term issue then the other option is to consider a debt management plan or similar. This would have a long term effect on your credit file but may be an option if you don't think things are likely to improve.

nlrenney

I live in Hitchin, work in Finchley/Elstree, so cycling isn't an option, I don't live near anyone I work, and public transport has worked out at far more than a tank of petrol a week.

Food is definitely something we could probably improve on...we generally cook fresh with cheapest ingredients, but we don't batch cook which is a great idea, and meal planning would help massively too.

Fun you're also right with...I linked it in with food, to give £150 mostly for food and in a dream world have £10 spare for something extremely fun and exciting haha.

Internship is set to be 3 months, finishing in 2 months, It's looking to be a paying job (unless I hugely mess up), but even then it's likely to be a minimum wage deal.

My parents are subsidising the whole £400, I'm not using either of my credit cards. They're also covering car insurance. Tax isn't due until June and MOT not until October.

Rent is very good for the area, bills we've recently switched to cheapest gas/electric and internet/landline.
We've split the rent in half, neither of us earn enough to pay more unfortunately!

Thanks both for replying!

19lottie82

sorry to be blunt, but you can't afford to continue with this internship and maintain your current lifestyle. you say you spend £200 a month on petrol to get to work, and then there will be the car maintenance. so in effect, it's COSTING you money. AND you want to spend over half your monthly wage on spotify and "fun".

where will this internship lead to? what industry is it in? Is there the definite chance of a well paid job at the end of it? If not, then I think you need to reconsider what you're doing here. sorry.

nlrenney

Hi 19lottie82,

I appreciate your bluntness, but a lot of what you have stated has been addressed.

Car maintenance (generally) isn't due until at least 6 months, by which time I will be paid. If anything was to happen to my car before then, my parents will cover.
I need Spotify to keep up to date with current music on the go, as I work in the music industry. And fun is combined with food, as most of it will be on food and any extra's within that are to live off.

Tixy

nlrenney wrote: »

Internship is set to be 3 months, finishing in 2 months, It's looking to be a paying job (unless I hugely mess up), but even then it's likely to be a minimum wage deal.

For 2 months and if parents are willing to continue then I would just keep paying the minimums for now.
If you then get a job, even at NMW you'd then be taking home say £1000 a month from that job. Although obviously try to convince them that you are worth a bit more than NMW!

At that point you'll be in a position to meet your minimum payments and hopefully be able to work on paying back your friend. And once they have been paid be able to put more to the other debts each month.

Pixie5740

Here's the link to the Statement of Affairs.

http://www.stoozing.com/calculator/soa.php

Even once you've finished this internship and you get a full time job you say that will probably be at NMW, which assuming you're over 21 is £6.50 an hour, so working full time, after tax you'll be looking at taking home £965 a month give or take. That's still not a lot compared with your expenditure. You're going to have to find some way of boosting your income and reducing your expenditure.

Does this job at the end of your internship have any scope for the pay to rise dramatically over and above NMW in the future?

nlrenney

Thanks for the calculator!

Yes, it's all reliant on people moving up and on, which luckily for me is a regular thing in this industry.
Once on minimum wage of approx £965, I would have the extra £260 of my second job which would leave me at £1225 which sounds far healthier!

On_my_way

If your parents are willing to help you for a couple more months and you aren't using your credit cards then you are better off applying for jobs now, finishing your internship to the end.

Sometimes you do have to speculate to accumulate.

theoretica

Is your internship legal? Many should pay minimum wage: https://www.gov.uk/employment-rights-for-interns