A bitter realisation...

DealorNoDeal

Hi there,

Ever since being able to earn money, I've been in a horrible habit of getting in debt and not being able to pay it off.

When working my first job aged 18, I pretty much immediately had a £600 overdraft. I thought I was only earning a measly £12,000 a year and was unable to pay back my overdraft due to appalling spending habits. I managed to convince my parents to pay it off for me.

What I didn't realise was that 12,000 goes a long way when you're 18, live with parents and drive a very economical car.

I moved out of my parents' place about 6 months after being bailed out of my first overdraft. I didn't save at all and lived very much in a hand to mouth fashion. I lived each month as it came, pay check came in on the 1st, 2 weeks later, I was searching my sock drawer for change to last the rest of the month. This was a monthly occurance.

I then had a huge night out with work one pay day, spent my whole months wages on alcohol (I don't remember any of the night to this day) and had to ask work to pay me weekly. I then lived on a week by week fashion and never saved to work back up to a monthly income.

Up until December 2014, I had managed to rack up a £2000 overdraft, borrowed £2000 from my grandparents and borrowed from my parents 4 times. I also had a car loan for £3000, but the car got written off with no GAP insurance so I had to take out another car loan.

Fast forward to my bitter realisation...

I left my £18,000 job of 2.5 years in April to go to a new job which I had been headhunted for - I saw this as a massive compliment and immediately jumped at the opportunity but didn't think of job security. I had been promised £25,000 plus bonuses and immediately couldn't say no. I joined the new company in April and within 2 weeks, I had been made redundant due to the company needing a Business Development Manager instead of a Graphic Designer. I decided I'd try a freelance career and work for myself and naively thought I'd be better off.

Starting a freelance career had been incredibly difficult. My first client , I worked for 2 weeks and didn't get paid due to a loophole in their contract. I don't have the money or time to take them to court and it's basically meant I'm now down to my last available £20 in my bank account (-£1980 of a £2000 overdraft).

I've had to ask my parents AGAIN to help me out this month. They've agreed to cover my bills (as long as I pay them back ASAP) but they won't ever help financially again..

I'm done with this. I'm not borrowing any more, ever again unless it's for a mortgage and it's with a bank and I can afford it!

So my realisation: I need a job QUICK and I also need to clear debt fast.

My debt is as follows:
£5000 consolidation and car loan (2k cons/3k car)
£5000 Car Loan - Current Car
£2000 Grandparents Loan
£2000 Overdraft
£1000 Macbook
£500 Wheels
£550 Loans to Parents

So currently I'm in debt for £16,050. :eek: I'm not fussed about my current car finance as I now drive a sensible, reliable diesel and it is cheap on insurance for my age group. So effectively £11,050 that I want to get paid off ASAP.

When I'm working, I'm aiming to be earning £18k a year so will have £1277 each month after tax. I've got fixed outgoings (rent, car insurance, basic loan payments, overdraft fees etc) of £709 a month. I intend on saving £300 a month to clear debt.

I'll probably put a SOA up shortly.

For now, first step... Find a job and stay positive. :cool:

DealorNoDeal

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1277
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1277

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 175.6
Rent.................................... 200
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 95.89
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 12.68
Car Insurance........................... 118.82
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
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................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 612.99


Assets
Cash.................................... -1980
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ -1980


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 5000.....(118.6)....19.9<
Wheels.........................600......(29).......19.9<
Macbook Pro....................1000.....(28).......14.9
Total secured & HP debts...... 6600......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Debt Cons / Car Loan...........5000......118.6.....19.9
Grandparents Loan..............2000......0.........0
Parents Loan...................580.......0.........0
Total unsecured debts..........7580......118.6.....-


Monthly Budget Summary
Total monthly income.................... 1,277
Expenses (including HP & secured debts). 612.99
Available for debt repayments........... 664.01
Monthly UNsecured debt repayments....... 118.6
Amount left after debt repayments....... 545.41

Personal Balance Sheet Summary
Total assets (things you own)........... -1,980
Total HP & Secured debt................. -6,600
Total Unsecured debt.................... -7,580
Net Assets.............................. -16,160

DealorNoDeal

Reason for such a high phone bill:

I broke my last phone just 1 year into the contract (EE). I needed a new one so instead of buying a cheapy one to last me, I bought an iPhone 6 through O2. I finish my EE contact in August and will be saving £29 a month.

DealorNoDeal

Job Search Update no1:

I had 4 interviews on Thursday and Friday last week. One went terribly, another turned out to only be offering free office space to me as a freelance in return for a certain amount of hours' design work each week. The other 2 were fab. One was for a high end exhibition stand company - wage was £22,000 a year but was 40 miles away (1 hour commute). The other was closer to home (15 miles, 30 mins commute) but the pay was probably £18,000.

I hear back from both next week, but my aim is to get myself in a job before the start of next month. I can't get in any more debt.

Oh and an impromptu job interview came up, a bit shockingly.... I went to help my Other Half's sister buy a new car at a dealership. I got in a negotiating war with the salesman and his boss overheard and gave me an interview on the spot. Turns out, my general knowledge of cars was better than all of them! (Cars are basically my hobby) I'll hear back next week but it's a career I'm interested in for sure! Plus earnings of between £2&£5k a month would help clear debt!

DealorNoDeal

Made an active change in driving habits today. Gone from doing 32mpg to average 50mpg on a trip into and around town.

Determined2Save

Hi there,

Just to say - well done and stick in there! It took me being down to my last £5 to give myself the kick up the @r$e I needed to change my habits for good too, and now, just over a year later, I'm well on my way to getting rid of this horrid debt.

What worked for me was making it part of my routing to check my bank balance EVERY DAY - that way you can alter plans accordingly if you forgot about bank charges or something

DealorNoDeal

Thank you Determined2Save. It's definitely my new aim to check my accounts everyday.

Todays win... Found £20 in an old box in a clear out of my drawers. Used half to pay for a KFC for me and my partner, the rest is tucked away.

Also got rewarded £20 yesterday for finding an iPhone 6 and reuniting it with it's owner - more money to be made if I sold it, but hey, gotta be a good honest member of society! The owner was so pleased that we got in contact! Good deed done! :j

DealorNoDeal

Today's realisation... A mars bar costs 75p, as does a plain baguette at Tesco. Which one allows you to be full as a snack and still have enough left over to feed the ducks?