Getting Out Of Debt

jackie500

Hi there,

I have got into debt overtime on various different cards etc, this is largely due to being unemployed a lot of last year and having no incoming money.

I now have a job and I am paying my way down.

I am in around £8k of debt, I am trying to decide the best way forward. Part of me is convinced I should sell all of my nice possessions e.g. my TV and my macbook and do without to try and get out of debt ASAP. Another part of me realises my debt is so large that selling things would just be scratching the surface and I should probably just grin, bear it and get on with it for as long as it takes.

I did this to detail my outgoings:

A lot of my overdrafts are interest free as they are graduate accounts, the coop account loses the interest free facility in July, so I may have to transfer whatever remaining balance is on that onto the Natwest overdraft in July.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1750
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1750

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 800
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 38
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 260
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 130
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1348


Assets
Cash.................................... 190
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 190

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Coop Overdraft.................1850......0.........0
Santander Overdraft............1724.47...0.........0
Barclaycard....................3614......50........0
Natwest Overdraft..............700.......15........18.28
VERY...........................500.......0.........39.9
Total unsecured debts..........8388.47...65........-


Monthly Budget Summary
Total monthly income.................... 1,750
Expenses (including HP & secured debts). 1,348
Available for debt repayments........... 402
Monthly UNsecured debt repayments....... 65
Amount left after debt repayments....... 337

Personal Balance Sheet Summary
Total assets (things you own)........... 190
Total HP & Secured debt................. -0
Total Unsecured debt.................... -8,388.47
Net Assets.............................. -8,198.47

MoneyMission2015

Is your groceries just for you? If so then it is really high! We are a family of 4 & I am currently working on our budget of around £260 per month.

jackie500

I added in an extra just to be safe, for those months I may eat out.

I realistically spend about £30 a week on groceries. Weeks where I eat out this can be £60!! EEK!! I probably shouldn't eat out, but I always end up meeting a friend or something... Maybe that's a good starting point to ban / reduce that.

Vikipollard

Your rent is £800 (eek!), but you pay no utilities or Council tax?

McKneff

How come rent is 800 a month:eek:


and yet no gas, electric, water etc.

Dr._Shoe

If you meet a friend then just go for a drink?

You can possibly trim a bit off your phone bill.

You need to pay off that Very debt first. Do minimums on the 0% debts and throw all the rest at Very. You may also be able to get another 0% card and transfer the remainder of the Very debt and your Nitwits overdraft onto it. Then, as long as Coop and Santander are happy with you not paying off their overdrafts you need to work on your Barclaycard at £350pm. This will give you more to use to get rid of your other debts.

You are lucky in that you are only paying about £35-40 a month in interest...

Dr._Shoe

McKneff wrote: »

How come rent is 800 a month:eek:


and yet no gas, electric, water etc.

She probably lives near me!

fatbelly

On your figures you can be debt free in 2 years. Not sure I believe the figures though.

The Very debt can go in month one: £190 cash and £337 surplus.

jackie500

Live in London hence rent £800!

It includes every bill
Council tax
Electric
Gas
Cleaner
Broadband
Etc
Even toilet roll, sponges, bin liners etc. We get a weekly delivery of that stuff!

So only bill I pay is my mobile which is quite high. This is because for work I travel abroad a lot so I need a contract which allows me calls in Europe else that bill would be so much higher.

Very is interest free until December but I will pay it first.

I am worried somebody just pulls the plug on the overdraft or something. I tried to get a loan to have it controlled but was refused and then offered an eye watering 17% apr from natwest.

The main reasons why i got here is being unemployed for a while and then getting a new job but having to relocate and put down a fortune all at once.

I was debt free before all of this lot! I had the credit cards etc but never used them. In a way without that facility I would have been unable to survive so it was kind of necessary.

The budget above is the most accurate I can provide although there's those one off expenses like shoes for work, general work clothes etc that'll need buying.

I wanna get outta this ASAP.

What works, being entirely frugal and living poorly for a year, or actually doing it steadily so you can live without hating life and giving in? I want somebody with experience of this to help really

Skinnylatte

I would go with living very frugally for as long as it takes to clear your debt. You might find you discover new ways to save money you never thought of, and even new ways to bring in a little extra.
Once your debts are clear, you should have a new way at looking at money.
Good luck

snowfox

Welcome Jackie, and congrats on the new job.

I'm new here too and not a hardcore DFW just yet but maybe I can give you some practical tips about Moneysaving in London (hah!).

The £130 travel is that for a travelcard? Could you take a bus to work instead? It might take longer but with a bus pass you will save £50 a month.

£100 for entertainment, what is that for exactly? If it is for days out or spending time with friends, there are always lots of free things happening in London. Check out Londonist free & cheap section for ideas about exhibitions and other events: http://londonist.com/category/things-to-do/free-and-cheap
I used to go out clubbing a lot, now I still do about twice a month but I try to find the free or very cheap parties, and they are just as good. And I drink a few beers instead of double spirit & mixers all night.

Eating out, you could cut this back to maybe once a month, and use a restaurant voucher (2 for 1 deals or % off) You can find them listed on this site and in London you're never far away from one that offers a deal. Other nights, why not invite friends round yours and share a home cooked meal or even better get them to cook

Groceries in general you can definitely cut back on. My monthly food budget is about £200 a month for 2 people and that is using Ocado! I can't wait for the under construction Lidl near me to open though. (How sad ) Is there a Lidl or Aldi near you? If not try supermarket own brand or basics (if you don't already) often it's just as good as top branded.

Also if you don't already: take lunch to work! Stuff the Prets and the Itsus and the Starbuckses. I'm saving around £20 a week by taking in my own lunch. We have a little thread in the DFW challenges where you can find ideas for tasty lunches.

Mobile phone operator Three now has some European countries included in their 'Feel at home' promo where you can use your phone abroad at no extra cost. They have SIM only deals from £7 / month. Maybe this can be useful to you, if those are the countries you regularly travel to. If not, could your employer not provide a phone or at least could you expense it?

It can be hard to save money in London, there are temptations around every corner, so I would say take it a step at a time. It takes some time to form these new moneysaving habits and if you try everything at once you might not keep it up. But as you discover this new way of life it does become easier and a success in one area, e.g. lunches, will fuel success in another, e.g. shopping. And soon you will start to love it!

Case in point: it's Saturday night and I'm sitting here reading the MSE forum :rotfl:

Best of luck!