How to change things?

Florine

So here I am, sitting in a local coffee place. To be fair, I can't really afford my GBP2.75 hot chocolate, but I had to escape my house (room, actually) as I could not stop stop sobbing and desperately needed a change of environment.

On the surface I seem quite successful. I am 31, moved to London in 2009 and now work in the City. I have a few really good friends and two amazing cats. Every day I go to work suited and booted. All seems fine, but the reality is that there is a huge dark cloud above me, called DEBT. After feeling burnt out at my previous job with a high profile investment bank I stupidly decided to leave and did not manage to find a new position until three incomeless months later. Going from weekly to monthly pay. This nearly killed me. My current income is GBP27,000 per year. This is this just not enough to cover everything. I have accrued the following:

-GBP3,500 overdraft with bank
- GBP1,500 loan with bank (and paying this off and the current standing is GBP850 still to be paid)
-GBP250 open pay day loans (this was more before)

In addition:
- GBP9,000 student loan (I have managed to come to an agreement and am paying back GBP123 per month, although I may have missed this month's).

I receive about GBP1800 on my account every month and this is how I spend it:
- 825 rent (am on top with this)
- 132 transport (less this month as I have decided to travel by bus rather than tube)
- 350 loan repayments
- 200 food
- 40 phone bill
- 18 Netflix and Spotify together

Savings: GBP0.00

This leaves GBP235 to spend on other stuff and that is not enough. Especially with December coming. How I am going to buy a ticket (GBP150) and Christmas presents (say GBP50), plus some clothes (all my shoes have holes in them and I keep wearing pretty much the same stuff to work)? I don't know. My mother is coming to visit me next week and I have no idea to entertain her. Cant even afford to take her to dinner. My friend asked me to join her to the cinema and see Spectre, but I can't do it if I want to be able to buy food until next week Friday (pay day).

Please help me....how can I continue paying back my debts while at the same time have some breathing space. I love writing, but can't even afford to attend the weekly writing group I signed up for as the GBP5.00 I would have to spend on that is just too much. This makes me very depressed and I feel like I am not enjoying life in a time when I should be able about thinking about starting a family etc. I have tried to talk about it with friends but they just say 'I know exactly what you mean, stupid money' before spending GBP10 on a bottle of wine or something.

Any input is welcome. Thanks!

another_casualty

Howdy ! You have taken a great step by confiding in this great forum .
You will get some great advice by some very nice and knowledgeable folk on here. You will probably be asked to complete a statement of affairs form , which is somewhere on here .(s.o.a). It's a budget planner , where you list all of your outgoings .
From what I can see, a debt management plan may be the way to go .
( listen to others later on for other opinions ).
It doesn't cost you anything to join , and you will make one monthly manageable payment via stepchange/ Payplan or whoever.

Over to others .. Good luck

northerner999

You sound really stressed, who ch is understandable, but what would create most leeway in your budget is clearing some loans. The pay day loan is probably charging most interest, so that should be priority. Then that frees up some of your salary for other things, like food...

I don't think you need to worry too much about things like dmps etc, though do speak to stepchange if you feel you are down and suffering mentally from this. You just need to get down the money you are spending on repaying debt so you can live a bit better. The key is quick injections of income to bring these payments down.

Do you have things you can sell to find that couple of hundred pounds? CDs, DVDs, books, clothes which you think you need but don't? My bookcase is still full of books and DVDs I am *going* to read/watch but just haven't got round to. Some I have had in my past three or four residences.

You mention buying Christmas presents - firstly, do you have anything in your house suitable to give? I've been knock to stash gifts I am unimpressed with to one side and give them to someone else. Anything you can make? Personalised gifts often have more impact - failing that, charity shops are your friend. You could pick up work gear here too. Any chance of a Christmas bonus?

On the subject of Christmas, what do your family give you? I am lucky in that my family are really over practical so always just give me money for birthdays or Christmas no matter what. It's not much, but even an extra tenner in cash would probably help if you ask for cash rather than a gift.

I realise London is expensive for food, but it is amazing how ingenious you can be when you need to. What is in your cupboards? From time to time I "big shops" entirely and work my way through things I have built up. Can you do something similar - try just buying milk, bread etc and use up that old four pack of beans you have at the back of a cupboard on toast? Try cheaper brands, try taking a packup to work rather than getting a sandwich.mi don't know how you live, but I always point out how I would get a machine coffee for a quid at work rather than just take in my own and make it in the kitchen. Those quids soon built up. Cook in build and freeze - a huge pan of bolognese sauce can be done quickly and cheaply and keep you going for weeks if need be.

Can you also confirm the student loan you refer to is with a bank rather than the government loan via student loan company. If the latter then it is nowt to worry about as it should be coming off your pay, meaning you cannot be behind, and any extra payment should be halted and used elsewhere.

andyfromotley

Hi, i'm guessing that you are not from the uk?

You have chosen to live in one of the most expensive cities in the world. On the plus side it is also a money generating mchine with lots and lots of well paid jobs. Unfortunately you are not in one of those jobs.

I would plan very hard on how to increase my income or move out of London. You could live very well on that salary in a much cheaper town or city away from the South East.

theoretica

Your food budget looks to me like the main target for cutting down - the old style board could help with suggestions of cheap healthy meals. Perhaps when your mother is visiting she would like to help you with meal planning, recipes or if you need them cooking lessons?

Even without cutting down, look at your £235 and decide how best to spend it - in advance. What do you really, really need and how much do you need to spend to get it? London has a lot of markets some of which are cheap so finding which ones you can get to easily and affordably might be worth it.

sourcrates

Wow 27 grand a year is more than twice what I earn now, your rent is astounding, so glad I don't live in the south.
Anyway, you can take back control of this quite easily, if you are that strapped for cash, stop paying the loans, at least for the time being, unsecured credit is the last thing you should pay when your struggling.

Take a couple of months, save some money, in fact you can default for longer, wait till the debts are sold on, then make offers to settle.

Don't ever pay unsecured debts before buying your essentials, debts can wait !!!

Florine

Everyone, thank you so much for your fantastic input. They have given me food for thought and over the course of the day I have started to feel slightly better. On the long bus ride home (remember, can't afford the tube at the moment) I have been thinking about some problem areas:

- Food: I will allow myself to buy lunch out once a week and to eat out twice a month. I will also get coffee out once a week. That's it. The rest is all going to be packed lunches and home-cooked food.
- Christmas/presents etc: I will tell my family that I will keep it small this year. Will get the very cheapest tickets I can find. Am playing with the idea of staying in London, but that would make me feel miserable.
- New job/more income: have been trying so hard for a long time and will keep on doing so. Unfortunately I don't think there is more that I could do. Hopefully something else will come my way soon.
- Leaving London: This is planned for early 2016. Unfortunately moving house is expensive. let along to another city/country, so it is not realistic in my current situation.

I am also thinking of opening a separate bank account for my living costs. Would that be advisable?

rolls99

Florine wrote: »

I am also thinking of opening a separate bank account for my living costs. Would that be advisable?

Yes. Once you have budgeted for all your bills, shift anything to this; you then don't need to calculate what you can and can't spend.

StrugglingYouth

Florine wrote: »

- Food: I will allow myself to buy lunch out once a week and to eat out twice a month. I will also get coffee out once a week. That's it. The rest is all going to be packed lunches and home-cooked food.

- Christmas/presents etc: I will tell my family that I will keep it small this year. Will get the very cheapest tickets I can find. Am playing with the idea of staying in London, but that would make me feel miserable.

The eating out thing, from what you said you're eating out 6 times a month..? 4 lunches and two other times also + the four coffees. This will probably cost you a lot more than you anticipate.

Dont stay somewhere where you're miserable. Value family time a lot!

pennystretcher

I'm sure your family will appreciate honesty - if you didn't have a job for couple of months, it should be obvious to them that you might be living on a shoestring after that for a while. And why should all Xmases be expensive? I rather receive one small item that I like and will use than something really expensive that will sit on a shelf and not get used. E.g. I like smelly soap bars, woolly socks, books on certain subjects, food stuff - absolutely best things come in small packages! (I don't mean Tiffany's )

Just get something small and get nice wrapping paper and string - it's the thought that counts...

And ps. £40 for phone? When is your contract due to end? If I was you, I'd get a SIM only contract next..

Pps. good luck, you have already taken your first step with loan repayments - what you owe may feel like a massive amount now, but you will get there in the end!

pennystretcher

and ppps : for your mum's visit, maybe you can get some ideas here:

http://www.visitlondon.com/things-to-do/budget-london/101-free-things-to-do-in-london
http://www.timeout.com/london/things-to-do/free-london