We need Help! SOA included

Adrasteia01

I think you should use your pension money to help pay off the debts. It is likely to save your debts from increasing as you are overspending at the moment. It seems like you can't afford not to hang on to it. It may possibly cost you more in interest by not using it than you would have by your company matching the money anyway. And it sounds like you need that money now.

You could also perhaps save money if you got rid of sky and held off buying more new clothes. If you're only paying 100 sterling a month for food, then you're probably spending as little as is comfortable for the two of you. Do you take lunches to work?

You could try pigsback to get some vouchers in too (I didn't see you mention that one). It sounds like overall you are working as much as you can though and there don't seem that many ways to save on money on your soa. Are you claiming any tax credits you're entitled to? Have you thought about ebaying any items that you don't need? Have you asked the banks if they could freeze the interest on your credit cards? The amount of debt you owe is similar to a mortgage.

Good luck,
Tamara

matthewking26

Credit: Balance outstanding Min Payment Interest Rate
Car Loan -£3,456.95 £98.77 9.0%
CC Bank of Scotland -£3,782.22 £77.00 24.9%
CC Barclaycard -£1,333.09 £30.00 24.1%
CC Barclaycard OH -£2,605.27 £67.00 24.9%
CC Egg -£3,779.07 £90.00 17.9%
CC Egg OH -£2,755.80 £80.00 19.9%
CC Halifax OH -£1,650.70 £33.19 19.9%
CC HSBC Mastercard OH -£7,541.82 £228.00 20.9%
CC HSBC Visa -£7,300.00 £220.00 20.9%
CC Lloyds TSB OH -£1,761.98 £36.00 14.9%
CC Mint -£5,900.00 £133.00 19.2%
CC Morgan Stanley OH -£1,191.51 £24.00 21.7% - I'd start with this one, get it cleared by cutting out leisure things and it'd be paid off in a few months, then move onto cc barclaycard
HSBC Loan -£10,192.49 £208.01 11.9%
HSBC Loan OH -£7,405.92 £200.16 11.9%

Can you get a repayment holiday to throw some money at the credit cards

Overdraft -£2,000.00 - 18.0%
Overdraft OH -£2,800.00 - 0.0%
Ignore for now

Owe Parents -£500.00 £0.00
Ignore for now

Post-graduate Loan -£4,131.78 £162.44 7.5%
Post-graduate Loan OH -£15,268.46 £308.96 7.5%

Stud Loan OH -£8,526.57 £0.00 3.0% (not repaying yet)
Student Loan -£12,585.58 £97.00 3.0%
Ignore for now

Council Tax £133.00
Electric £40.00 - try changing company?
Food £100.00
Gas £43.00 try changing company?
Interest on Overdraft £15.00
Internet £17.00
Mobile 1 £37.00
Mobile 2 £27.00
Pension £119.50 - cut it out completely for now, you need to get the credit cards down and that could get rid of one credit card every 4 months then once your saving you could overpay to make up the gap
Rent £675.00
Sky £21.00 - get rid asap
Telephone £11.74
Travel/Fuel 1 car only £60.00
Water bill £20.00
Leisure £75.00 - cut it out
Other, clothes, etc £40.00 again cut it out
Monthly Outgoings Total:£3,527.77

My Wages £1,789.38
Partners Wages £1,310.00
Extra Work £300.00
Quidco, surveys etc £15.00
Mystery Shopping £20.00
Monthly Income Total: £3,434.38
Shortfall: -£93.39

You need to get those credit cards down asap before they suck you dry. Cut out as much leisure stuff as you can, especially the meals out. Get the pension stopped straight away to throw money at the credit cards. Personally I'd throw it at those cards with the lowest balance to clear them and give you a psychological boost. You need to be tough with yourselves and especially the £75 leisure and £40 other, work out exactly where it's going so you can cut it down to the bone.

Pension front - I'm 26 and owe 15000. If as planned, I'm debt free by 2010, the £450 a month I'm currently paying on debt repayment can go into savings and pension instead.

Look at it this way, let's say it takes you 5 years to clear your credit cards. Every payment that currently goes on the credit cards can then go into a savings account or overpaying the pension. Within 10 years you'd have saved enough to be in a better position come retirement than you'd be in by carrying on paying the pension whilst simultaneously giving the banks your money for free. Very nice of you but they don't deserve it!
Otherwise by the time you'll retire you'll get a pension of about 10k a year but have no house and still be paying off your credit cards.
If I made minimum payment on my credit card of £7000 at 24% it would take me the next 40 years to pay it off. Times that by the number of cards you have and you'll be dead before the debt is paid. Would you enjoy receiving your pension and giving it all straight to the different cards?
Ebay everything you can lay your hands on!
It will be tough but worth it in the end!

Seaxwyn

Hi savvy14 and welcome

Just a quick comment on the pension question. I'm older than you with very little pension. Even so, I was advised by people on the MSE pension board that it is far better to pay off debt than save for a pension. If you want more detail on this, post a question on the pension board as there are people with specialist knowledge of pensions there. Personally, I'm not going to resume pension contributions until I'm debt free.

hypno06

Hi there, I have been where you are, but had the mortgage on top and two kids too! It is scary, but it can be done, one step at time, and you will get there.

Have you put you current figures in the snowball calculator to give your initial debt free date assuming that you meet all minimum payments as they are now - you are right to do fixed standing orders in my opinion as these will get that extra little bit paid off each month.

Target either the highest APR or the smallest debt first, and start focusing on it - I find the snowball calculator the best motivator ever, and it is amazing what I can find to ebay to throw an extra £10 at the debt. Play with the figures so you can see what difference it makes if you cancel the pension etc.

OK, so it takes time, and in the early days with interest high it seems as though nothing is happening, but believe me it will.

Do you have a spare room you can rent out - we get £120 a week from a foreign student. We would love to have our house to ourselves but the income provided makes a huge amount of difference in our quest to become debt free.

Stick around, and keep posting - the support on here is fab, as I am sure you will have seen!

savvy14

Thanks everyone. So I think I have been convinced about my pension. We have had a chat and we will not go for anymore meals out. That will give us ~£75 a month to put onto CC's. And please don't take the clothes etc as blowing £40/month on clothes, it really describes any ESSENTIAL extras.

Yes, we both take packed lunches to work and we never buy teas/coffees etc. (People I see at work waste so much money on a coffee every day!)

How do we go about having interest frozen or reduced? Does that affect your credit rating? Does anyone have any experience with asking banks? Also with repayment holidays - that sounds like a good idea but assume we could only do it for 1/2 months?

We need to just shovel as much as we can onto the CC's - the loans we can deal with. They are fixed and reduce every month.

Matthewking - thanks for your advice, as we are now paying fixed amounts every month, as soon as one card has been paid off we will use that money to make larger payments to another card. We estimate to be debt free by 2011/12. Not a bad plan for over £100k. But we have to get on top of it before it gets on top of us!

Getting a to do list together or tomorrow!

firesidemaid

i don't have many debts, but we do have 100k mortgage.

i never used to save any money, but now i am trying to pay it off asap - because i have that goal it is easier to pay money off the mortgage than to spend it on unneccessarys.

live totally in a cash world. if you get a better deal on your utilities you can get cashback too. if insurances are due go through quidco too for cashback.

asda and tescos accept any coupons off your shopping (you don't have to buy the item, as long as they sell it - even money off magazine coupons) look at the magazines in your workplaces etc and in stores - it really does add up. each time you save, transfer that small amount across to a credit card debt.

if there are pennies left in your account/purse pay them off cc.

could you get jobs in supermarkets or restaurants to get free/cheap food and/or tips.

there are links on here to mystery dining companies - so you could eat out for free.

each time you overpay, even by a £1, your debt-free date comes closer and closer - keep re-working that date out to keep yourselves motivated

and keep posting on here too - it really is a great place to be.

firesidemaid

something else i forgot to add!

as well as stopping the pension for now seeming good, you also mentioned that you hadn't been in it for that long - another reason not to worry about it for now.

also, with many schemes, if you have been in it for less than 2 years you can get all the money back - if this applies to your scheme you may as well do that and throw it at the debt and start again later x

Trudie27

Leisure - the cheapest and best night out we have had was when I used to be on Orange and got Orange Wednesdays. We would (soetimes go and get chips first) and then go to the cinema 2 for 1 and ( very naughty, but it made the night) sneak in our own beer and snacks. It cost about £10 for the 2 of us.

I'm in the same situation with the pension - company pay in which is the only thing that makes me keep it - otherwise I think I would be better off getting rid of it then paying in more one day when I can afford it. I think you have so many different debts you should see if they will let you take a payment holiday (because then you won't lose out on the long term benefit of it) and if not your money would be better spent paying off debts that are costing you more money.

Good luck!

savvy14

I meant to add - my landlord messed up our gas/electric accounts so we didn't pay for a year. Our current paymenst of £40 and £43 are half paying our backlog so our actual monthly bills will ony be about £20 each.

We already do mystery shopping and try and get any dining ones available. When we get paid we put it straight onto a cc.

We also use about £3 coupons every week on our shopping (to the annoyance of some SA's!).

We really don't have time to get another job, all we do is work. I added £300 in the SOA - this is a minimum (as it is never guranteed work). Next month I have a job for £750, which is great.

This is our problem - we feel like we are doing so much for such little gain!

firesidemaid

at least that 'extra' £450 will really take a chunk out of one of the higher-interest debts.

i have read on here that other users have rung up their credit card cos and stated that they are good customers, always make payments etc, but are feeling the need to move the debt because of the high interest rates (they won't know it's not true) - and have had it reduced by a few percent. it's worth a try.

you could start a separate thread on the cc board and ask if anyone has had any recent success?

let us know how you get on x