A recent graduate's Debt Diary

geekinaseat

Hi,

I've recently finished university (with tons of debt!) and started a new job and I'm trying to draw up a statement of affairs but I'm having trouble as I haven't paid tax this month (because of the yearly tax free allowance) and would love to know what my income will be when it all settles down.

Can anyone figure it out for me, I'm very new to tax and how it all works so an explanation would be great!

Here is my SOA at the moment:

Income:

Salary: £23,500 (for the first couple of months) £25,500 after that.

Total Income per month (without tax): £1958 (£2125 in two months time)

Debts:

0% Overdraft: £1028
0% Overdraft #2: £1214

0% Credit Card: £3709
Interest Paying Card: £692
Interest Paying Card #2: £713

Total Debt: £7358

Outgoings (monthly):

Rent: 0 (in dec I have to start paying £585 per month)
Car insurance: £47
Phone bill: £35-45
Gym membership: £56

DFD: No idea yet!

Any help/comments greatly appreciated!

tigtag02

Your Net pay will be approx £1,478 and then £1,589.

This is inclusive of both tax and NI deductions.

This is also based on your tax code being 522L ~ if you have not earned already this tax year and your code is cummlative (that means calculated over the whole year and not just that pay month) then your first few wages may actually be more.

522L means that you can earn £5225 pounds tax free over the year.

I'm not the best at explaining things so if that reads like double dutch give me a nudge.

I'm sure the SOA experts will b along soon ~ welcome to MSE

geekinaseat

Wow, thanks. Yes that is the tax code I'm on, great now I can figure out exactly how much I can pay off this month! :j

tigtag02

geekinaseat wrote: »

Wow, thanks. Yes that is the tax code I'm on, great now I can figure out exactly how much I can pay off this month! :j

:grin:

Dont forget if your tax code has a M1 (month 1) after the 522l then those figures will be pretty close to what you will net.

If there is no M1 (the cummulative I explained above) and you haven't yet earnt this tax year (from April) then you will probably net more

Only other things I can add re: your SOA is your phone seems high, is this contract? If so, when is it out? There are a few cash back sites you can go through to change this

Is the Gym membership needed? You can run/jog for free and throw £56 a month at your debts

geekinaseat

Income:

Monthly Salary: £1478 (£1589) -Thanks Tigtag

Outgoings:

Rent: 0 (in dec I have to start paying £585 per month)
Car insurance: £47
Phone bill: £35-45
Gym membership: £56
Car Tax: £11
Food: £190
Smokes £70

Total: £419 (£1004)

Debts:

0% Overdraft: £1028
0% Overdraft #2: £1214

0% Credit Card: £3709
Interest Paying Card: £692
Interest Paying Card #2: £713

Total Debt: £7358

Target: Pay off £1000 per month until I start paying rent then £400 from there

Debt Free Date: June 2008!!!

geekinaseat

I haven't yet paid tax this year and there is no M1 on my payslip so I guess my actual earnings will be slightly more?

I agree my phone bill is massive and I need to so something about ti, it's a contract and I'm sure it was only supposed to be £35 a month but they have added something extra to it... As soon as I get home and find a bill I'm going to give them a call.

My gym membership is my luxury.. and it's helping me quit smoking (the amount of times I feel like I'm about to collapse in there seems to have an inverse relationship to the amount of cigarettes I smoke)

I think the first things I need to pay off are the two interest charging credit cards... or maybe I will pay my car insurance in full as that has quite a high interest rate, I will have to check and that will free up an extra £47 a month too.

tigtag02

Sounds like a good plan ~ however, there is still room for manouver there and bring that DFD forward.

The gym and the mobile as I mentioned before are a good place to cut back

Smokes: I am not gonna harp on about this because as an ex-smoker I know how bl00dy annoying it is BUT (:rotfl: ) could this be cut down or swapped for cheaper roll ups?

Food: :eek: :eek: :eek: ~ is this just for you? I spend £10 more than this on a family of 4. If it is just you then you can potentially half this with wiser buys and a good look around the OS (old style) board

You also may be able to bring your car tax down ~ we have just renewd ours, halved our monthly payments and earnt £45 through Quidco

geekinaseat

The food is a bit of a guess... Because I've just relocated for my job and I'm getting used to the whole routine I'm not quite sure how much I spend on it to be honest.

The smoking is going defo! Just "invested" in some nicotine patches -gonna go to the doctors to see if I can get them free in the future

My car insurance is as low as it will go without dropping it to third party and I'm not too sure about doing that. Kinda undecided but I wouldn't want to ruin my DFW plan by having to shell out after an accident.

I was a bit shocked to see how much my total outgoings are... writing a SOA definately helps. Hopefully I'll be able to stick with my plan as in the past I have always ignored my money (to my detriment) and I guess its doing that which has put me in this position, but I'm ready to take it all on now

Wish me luck!

CLAPTON

It would be worth your while to draw up a proper budget especially as you say you will be paying rent of 585 in december (why is that? will there also be council tax and other costs?)


So a proper budget includes all the things you spend money on including all the yearly and one off things.

so e.g. you should budget for socialising, work lunches/coffees, hobbies, newspapers/magazine, clothes, takeaways, eating out

and the yearly and one offs .... mot / servicing /repairs/RAC, any holidays planned, weekends away, xmas expenses, presents or whatever you actually spend on. Divide these by 12 to give a monthly figure.
Get used to actually saving for these things so the money is available when the bills come in and you dont simply spend on the CC so restarting the debts.

liz105

If you're paying out for a gym, then why smoke?

geekinaseat

CLAPTON wrote: »

It would be worth your while to draw up a proper budget especially as you say you will be paying rent of 585 in december (why is that? will there also be council tax and other costs?)


So a proper budget includes all the things you spend money on including all the yearly and one off things.

so e.g. you should budget for socialising, work lunches/coffees, hobbies, newspapers/magazine, clothes, takeaways, eating out

and the yearly and one offs .... mot / servicing /repairs/RAC, any holidays planned, weekends away, xmas expenses, presents or whatever you actually spend on. Divide these by 12 to give a monthly figure.
Get used to actually saving for these things so the money is available when the bills come in and you dont simply spend on the CC so restarting the debts.

That sounds like a great idea, I'll start working on it... I hope everyone is prepared for daft questions like "on average how much does your MOT cost"

The reason I'm not paying rent is becasue my employer is paying it for me at the moment, I moved a long way to start this job and part of the deal was I got a relocation package, it was a tough decision to move away from all of my friends but I couldn't really say no to the job offer but as a kinda positive side to that I don't do much socialising as I don't know anyone here yet so that is a saving for the moment!

Also, all of my bills that I haven't mentioned in my SOA are included in my rent.