New Debt free Wannabee - my SOA

Trudie27

Hi All,
I've come to the site because i've stalled on reclaiming my bank charges, I'm stupidly over my overdraft limit, can't access any cash and so therefore can't bury my head in the sand anymore!
Over the last couple of months I have been trying to get bit of cash in - trying to sell my paintings and any unwanted old belongings at car boot sales, selling things on ebay which has paid for birthday presents and to pay off a bill I had unpaid for my car, but they aren't long term money makers as they are an infinite resource.

This is my SOA - please can you help suggest ways I can handle my repayments, clear my overdraft and then start chipping away at the big debt?? At the moment I have what I think is a £167.91 shortfall.

Salary - after £50 salary sacrifice (company pays in too) for pension - £1175.34

Monthly outgoings:

£600 into joint account to cover food, Mortgage, Gas, Electric, Water, Council tax, Phone/Internet, Food, House insurance
Life Insurance - £33.08
Car Insurance - £33.18
Gym membership - £39.95 ( although I am trying to cancel this because i can just go running instead but is likely I will have to pay another month within the contract)
Bank charges - this month £150.00 'overdraft arrangement fee' plus £28.00 interest
Prescription - £6.85 bi-montly so £3.43
Mobile - £35.99 ( with 4 montly cashback of approx £22.00, tied into contract until December)
Petrol - £47.00
Mint cc - no longer in 0% interest free period - Balance £4766.23, minimum payment £107.00
Capital One cc - interest free until Nov , balance £4767.39, minimum payment £147.15
Car Loan - Northern Rock £118.48, 8.9% 5yrs and 2 mths left to pay. They are charging me Payment Protection too which I am just about to start the reclaim process on

I make this total £1343.26, therefore a £167.92 shortfall per month which once I have cancelled the gym would make it £127.97.
If I didn't have the bank charges my outoings would be £1125.30

My overdraft is at £2400 but it is only authorised for £1600 so I am £800 over my limit.

I also have 2 other debts I am not currently paying back - £5000 to my boyfriend plus £5000 approx to Student loans - althought to have to pay this back I would have to earn approx £24k (my salary is £18.5K)

Mortgage not due for renewal for approx 4 yrs.

Apart from switching the Mint card and possibly puting the overdraft onto a new card too ( which one would you all recommend?) I don't know what elso I can do? I need to bring my repayments down so that I have a little bit of cash to live off and not ever spend on a credit card again but then I will also have to find another credit card to tart my Capital One to when it runs out

Please help!!!:money:

HairyHandofDartmoor

We need a more detailed SOA I'm afraid. We need to know exactly how much you spend on food, mortgage, utilities etc, as we may be able to help you reduce these.

Also when you are out of the interest free periods on your credit cards, what will the interest rate be?

I would recommend you try and get the credit card debt onto a low life of balance rate. What is the credit limit on these cards and are you up to that limit? If you are not up to the limits you may be able to balance transfer money from one to another.

If you can empty one card you could balance transfer money back on at a low rate, depending upon what deals are being offered for balance transfers (read Martin's article on balance transfers as he explains it better!)

MissKJ

Look at the date of your mortgage payments? Can you change it to give you a free month or take a payment holiday for a month just to clear your OD and stop paying charges?

You could easily balance the books by doing the shopping challenge. Once it balances, you will find the momentum to start paying more off your debts, little by little.

tallyhoh

Why is your life insurance so high? Do you have a dangerous occupation or sport? Mine is £8.25 a month.

Teacher2301

Hi there - first things first - well done for joining the site and admitting you need to do something - that's probably the hardest bit!

1) Life insurance is way too much - do you smoke, have any health probs (don't answer- but this will affect your premium)? How much is your mortgage to warrant this high premium? Use QUIDCO - a cashback site to get some cheaper quotes and a cheaper deal.
2) Use the comparison sites to get the best deals for all your untilities (gas, elec, phone, internet - perhap use SKY's bundle package for £15 per month and use BT's option 1 (£10.50 pm) - how does this compare with your costs at present?
3) No quick fox for the loans though - won't advise consolidating yet but check out if you can balance transfer them - or threaten to leave - they may lower the APR's.

Will post more once we all know the details of the £600.
3) Ditch the mobile and go PAYG when you can - there are loads of free sim cards around O2 do two for free via some cashback sites (Mutual) and both of you and OH can use them.

lunar

Trudie,

Looks like we are starting our debt free journy at the same time. Its a bit of a shock when you first add it all up, it was for me anyway. I cant believe how supportive everyone here is.

Would you be able to balance transfer any of you mint balance onto another 0% card?

Trudie27

I have loads of space on the Capital One card - they gave me a v high limit - I could transfer the Mint balance onto it but I think the interest rate would then be higher on the transferred amount - also since I need to switch that one in Nov it would be very short term.
Can def switch the Mint card to another - would you all consider bundling the OD together with it?
Also I had no idea the life insurance was SO HIGH! I thought it seemed an OK amount! Also we are both fit and healthy

SOA on the joint bills is:

OH pays in £700 and pays Joint cc repayments from own ac

Water - Annual £305.42 split into 2 payments so approx £25.00
TV Licence £11.61 / month
Electric £119.25 / Quarterly so approx £39.00
Council tax band B - £94.00 / month
Mortgage - £725.35
House Insurance - £26.15
Gas - Quarterly, last bill was £108.91 summer bill. so approx £35.00
Food etc - approx £250 including all cleaning stuff and dog food.
BT Broadband/phone - I have switched phone to option 1 and internet to option 3 so new total should be coming in at approx £34 (previous to this it was about £60!)

Total 1240.11 so this account just breaks even, I can't really steal any from in except to pay into joint cc

We don't smoke or go out drinking or even shopping really - I did have a magazine subscription but have cancelled this and the last time I had my hair done was April - in among 3 weddings which aren't cheap to go to.

Thanks for your help guys - it would be great if we could lower all the other outgoings!

Trudie27

OK I have just switched the Gas and Electric, so hopefully this is the start of the proper cost cutting - the estimate ( depends if you count summer or winter!!) was between £230 - £270 saving over both so hopefully we'll gain maybe £20 a month!
Must sort that life insurance!!

fiveyearplan

What about changing your phone and broadband to talk talk. That should be about £20 per month with free national and international calls (not sure if this is just off peak or all the time so worth checking). We've changed to them and barred the calling of mobile phones (teenagers ran up HUGE!!!! bills - roughly £3,000 last year). Now our combined phone and internet is £20. I feel like dancing!

Trudie27

I think I'm now tied into the BT - I originally looked into it to get wireless internet - when I realised how much we were spending on the old tariffs I thought it was a bonus to get the router free and also to cut the bills, but thanks i will bear it in mind!:p

abc

Bank charges £150 + £28 = £178 per month.

Is that the typical amount you are paying each month on the overdraft or is it a one off?

The amout you are overdrawn is £2400, so if that is costing you £178 each month that is almost 7.5% per month, which must put the APR at something like 100%!

As a very short term fix do you have any credit card cheques for Capital One that you could use to pay off the overdraft? Even if they charged you a 3% fee to use a cheque and then charged a high interst rate of 2.5% per month you would still be much better off. They payments would be £72 per month on £2400 instaed of the £178 you are paying, and at least a small fraction of the £72 would be going to reduce your debt.

The important thing is then to make sure you don't go overdarwn at all on the bank account so as not to incur further charges.

You can then look to apply for other cards with a low life of balance transfer rate, although you may find it more difficult due to having had an unauthorised overdraft on your current account.