Young, wild and soon to be debt free

PaulJW95

So I'm sure we've all been there, as a matter of fact, I'm there right now. Living through my terrible mistakes I made just a few years ago..

Let me back track,

My name is Paul, I am currently 20 years old and I work for one of the biggest companies in the UK with a nice pay packet (for my age, of course.)

Life wasn't always this easy though (and still isn't now if I'm honest!), when I was 16 I dropped out of sixth form, I decided that I wanted to go out all the time so I got a job flipping burgers, then 7 months later I decided I wanted more money to waste so I started flipping burgers elsewhere. It was at this point where I had a taste for money and wanted more, so I got an apprenticeship in sales (selling IT software to companies) - it was here that commission was like a drug to me. I remember making 200+ phone calls a day, arranging meetings for my boss all over the country and raking it in! But I never saved a penny, I was always broke the week before payday, making every weekend a "millionaires weekend".
I then turned 18, my mum had been saving £10 a week since I was born in a trust fund, the night I was able to get hold of that money I blew all of it, every last penny.
From here, things went from bad to worse, not only was I broke but I wanted a car, so I decided to get one on finance and then couldn't afford the insurance or tax so I financed that as well. This plus the lifestyle I was living soon ended up with me wanting it all but not wanting to work for it. I grew impatient and less interested, soon I was barely making 50 phone calls a day and wanted out.

I treated my car like an ungrateful little child, smashed it up and was left in a really tight situation. I left my job and got a different one with a local estate agents, they paid me well, no commission but I knew what I was coming home with every month. My first (and one of many hundreds) of spreadsheets was created working out how I can pay off items. But by this point I had a store card which was maxed out, a credit card which was maxed, an overdraft which was maxed, I owed my parents hundreds.

I smashed my car one more time, I was out of look, I couldn't afford the excess so I got my first loan.

I moved jobs again, to where I am now, luckily my career was the only thing going well for me.

I've now been where I am for 16-18 months. It was last month I realised that if I want a house that's mine and a car that's mine things would have to change, so here I am today. Telling whoever wants to read this about my plan, my actual plan, to rid myself of the horrible mountain of debt I'm currently sat on top of.

So - how does a 20 year old who earns 1.65 x minimum wage for his age get rid of his debt? Well, the answer is to man up, accept that he was a complete fool and start over.

Let's go into what is owed and when is the deadline on it:

Store card - £887.97 - December 2016
Credit card - £200.00 - April 2016
Overdraft - £750.00 - No date for when but every month there's a charge to have it.
What I owe my mum - £650.00
What I owe my dad - £200.00
My loan repayments - £304.63 per month (last payment is July 2019)
My car repayments - £134.65 per month with a £2800 final payment on the end date in August 2019.

The whole point of this exercise is to teach myself a lesson that if you want something, you earn it and be patient.

With that being said, I have a very strict budget, so strict some might think I'm being hard on myself but realistically, if I work hard from now until December, I will start 2017 with only the car and the loan left to pay off.. but we'll get there,

With all the above being said, and the fact you now know my background story, let's take a look at what payday is going to look like. March 24th 2016.

Income will be around £1220.60 (give or take a few £ + there's a chance I may hit my bonus but we will take this into consideration on the day, for now we stick with what we are guaranteed.)

Income
£1220.60

Expenses
£304.63 Loan
£134.65 Car finance
£34.17 Phone bill (capped at £35 but last month the provided made a small admin error.)
£28.00 Overdraft usage fee (we will be seeing this charge a lot.. for now.)
£120.00 Petrol (This is three tanks which is plenty for getting me from A to B per month.)
£200.00 Credit card (we won't see this much, but if there's an emergency we have it.)
£0.00 - Clothes or Holiday fund (I got a lot of new items last month so we're okay here.)
£150.00 - Spending money for the month, nothing rash, no heavy partying - just there in case.
£55.00 - Overdraft payoff (simple - I borrowed it, now let's get rid of it.)
£125.00 - Store card (get it gone.)
£0.00 - Car insurance (nothing this month, we have a month free!)
£0.00 - Car tax (my new car came with 1 year's worth.)
£40.00 - I owe mum (this isn't in the £650, this was an emergency.)
£25.00 - I owe dad (payment plan agreed with him, he's happy I'm taking responsibility)
£4.15 - Left over (this is here just in case the tax man wants more than he should one month.)

£150.00 spending money works out at £4.68 per day until my next payday (but who needs to spend this a day?)

You might have noticed that there is no charge for rent or board here. That's because my mother and I have an understanding that I will forever owe her, but she's willing to let me sort myself out first - she's a remarkable woman.

So there we have it, March to April - what's left:
Store card £762.97
Overdraft £695.00
IOU Mum £650.00
IOU Dad £175.00
Car £TBA
Loan £TBA

I'll be posting regular updates, little tips and tricks I find on my way to becoming debt free.
I was young, wild but now I want to be debt free! FOLLOW MY QUEST!

P.S. I know I sound like a spoiled brat, but I can honestly say I am a changed man. I recognise my faults and I'm here to get clear.

CandyCupcake

Subscribed!

You definitely sound like a man with a plan, I'm only 25 myself so know exactly what position you are in. Most of us are all here for the same reason - we want something, and we want it now. We can't afford it, so we stick it on credit!

Can't wait to see your updates, good luck

PaulJW95

Hey Cupcake,

Thanks for the support!

I'm going to make sure that anyone (especially people in our age group) feel like they're not alone! Because we unfortunately live in a society where people are willing to offer so much credit to people who really can't afford it.

This is a team effort, WE will be debt free!



I love doing spreadsheets, if anyone needs any help with them - let me know!

Scottishmummy

I was about the age you are now when I first started getting credit and it certainly took me a lot more than 4 years of debt to realise I needed to sort myself out so well done you. I now have a 16 year old son who thinks money grows on trees and despite explaining the situation we now find ourselves in he finds it impossible to hold on to money. Knowing what you do now what would you have told your 16 year old self?

In_Debt_Bet

I don't think you sound like a spoiled brat at all, you sound like a sensible young man who has acknowledged that his debt is a problem and has decided to do something about it. I wish I had been that sensible in my twenties instead of waiting until my forties to do something about it.

Good luck.

nextyeartina

Subscribed x

PaulJW95

Thank you so much for the words of encouragement.

Scottishmummy - what would I tell my 16 year old self?

I would tell myself that "as you come from nothing and want everything, you have to be responsible. With no outgoings, you should split your wage accordingly: save 60% / pay board 20% and spend 20% - always have a rainy day / emergency fund and patience is key. If you want something but can't afford it, it'll feel 100 times better waiting. Take it from someone who knows.. AkA yourself!"

With this being said, everyone needs to make mistakes and learn for themselves. Just hope they learn quick enough.

You're only alone in these dark times if you choose to be.

PaulJW95

So day one.. ish.
I must say life seems to be a lot brighter today, maybe it's because I know my life is on track, I mean sure I drive past the Audi's and the BMW's and think "man I want that" and I smelt my colleagues take away dinner today and thought "it's only a few quid." but no. There I was driving along in my little Polo with my tin of supermarket own brand spaghetti and sausages and you know what? It tasted amazing, because it was just what I deserve, and I couldn't be happier.

I've found already that eating fruit and drinking water rather than eating sweets and drinking pop improves your whole outlook on things.

Cutting back on the luxuries isn't going to bad, I mean sure I miss my £40 aftershave and my "off to the shop" lunch but hey.. I have a can of lynx (which was on offer) and a variety of food that's healthy, cheap and easy to make at work. Who's the real winner here? ME!

So tip number one (and will continue this list every post)
#1 - Eat and drink healthy - it'll improve the outlook on things! You'll also improve your work ethic and performance! Not too mention the fact by eating healthier, your weight won't balloon out of control so the depression doesn't take over everything about you!

Today, Monday, was definitely a happy day. Let's see what Tuesday brings! I'm excited.

Oh yes, I've decided to also do a countdown every post on how many days until our goal of only having two outgoings is achieved (estimated) - December 30th so that's only 290 days away!

CandyCupcake

Your post reminded me of something I saw on Facebook last night, it was 2 pictures of cars; one an old Corolla and the other a brand new Mercedes. It went on to say that most people will want to be the person with the Merc, however he still had 3 years of payments to make on his car, a 7 bedroom house he was still paying for etc. Whereas the person with that Corolla owned their car outright, as well as their 2 bedroom house etc. The moral being that the poorer looking person was actually the wealthier of the two!

So yes whilst we envy these people who 'appear' to have money, the chances are all of their 'wealth' is on credit. So lets be the person with the Corolla!

DCFC79

PaulJW95 wrote: »

Hey Cupcake,

Thanks for the support!

I'm going to make sure that anyone (especially people in our age group) feel like they're not alone! Because we unfortunately live in a society where people are willing to offer so much credit to people who really can't afford it.

!

It's possibly changed since 2008 where it may have been easier to get credit than the present. People do have a "I want it now " attitude and may well lie on the credit application forms to get what they want.

luckofthe_irish

PaulJW95 wrote: »

Hey Cupcake,

Thanks for the support!

I'm going to make sure that anyone (especially people in our age group) feel like they're not alone! Because we unfortunately live in a society where people are willing to offer so much credit to people who really can't afford it.

This is a team effort, WE will be debt free!



I love doing spreadsheets, if anyone needs any help with them - let me know!

Subscribed as well! Congrats on making your first step to sorting everything out - I am also 25 and desperately trying to do the same! Could I very cheekily take you up on the offer of helping out with spreadsheets? I have absolutely no idea how to create one that actually works - would love somewhere to put my spending each day so that I could have an idea (someday) how much money I will have at the end of the month... at the moment is -000's :rotfl:!

Looking forward to following your journey!