Wanna Be Debt Free

rouge100

Hey guys,

So I think I am in around £16,000 debt and need to do something about it.

Any tips - help me !! I live in London where rent is an absolute fortune and everything costs a lot. My debt has accumulated over around 6 years but mainly in the past 2 years.

I have NO idea what I spend all my money on but it's probably food, booze & clothes.

rouge100

Also only 24yo! So very young to have so much debt.

Muttipops

It would help a lot to know what money you owe to whom, ie loans, credit cards etc , the amount of interest payable on them and also if you did a Statement of Affairs so that people can see what income amd expenditure you have to see how much cash you have to pay off your debts.
http://www.stoozing.com/calculator/soa.php




It is then much easier to see what can be done to sort the debt out and which is the best solution for you.

sourcrates

rhys100 wrote: »

Hey guys,

So I think I am in around £16,000 debt and need to do something about it.

Any tips - help me !! I live in London where rent is an absolute fortune and everything costs a lot. My debt has accumulated over around 6 years but mainly in the past 2 years.

I have NO idea what I spend all my money on but it's probably food, booze & clothes.

Hi,

Without knowing more detail it's hard to advise, but basically you have three choices.

(1) budget correctly, stop spending on credit, throw everything you can at the debts.
(2) If that dosent work, a less formal solution is a debt management plan.
(3) Option 3 would be a formal solution such as IVA, debt relief order, or if things are really bad, Bankrupcy.

Why not post up a statement of affairs (SOA) then people might be able to suggest where savings can be made :

http://www.stoozing.com/calculator/soa.php

rouge100

Let me get a full listing to you. Honestly though my finances are often all over the place as I also charge work expenses onto my personal cards. I just opened an AMEX exclusively for work expenses so that I can begin separating work stuff and personal debts.

I also setup 2 bank accounts. One where I am paid into and all direct debits go out of (including debt). Another one where I will setup a weekly standing order into (for daily life etc), this card I ensured was not contactless to reduce temptation.

Believe it or not, I actually have all my debts in an excel sheet.

BARCLAYCARD: £17,000 credit limit
£14,527.47 DEBT
Around £9000 is interest free until Feb 2017
The rest of the balance - Around £5527.47 is 6.9% until paid off.
When it comes to Feb the plan is to move the debt between credit cards over and over, until I get the full balance onto the Barclaycard at 6.9% (assuming offer is available then).

MBNA: £5000 credit limit.
£1,743.61 DEBT
£1,421.99 interest free until January 2018
£321.62 interest free until July 2017

Santander Overdraft: 2000 credit limit
£1,656.58 DEBT interest free until July 2017

Total
£17927.66

I am selling a Macbook Air 2015 model, should knock off around £500 once sale completes.

sourcrates

Unfortunatly that tells us your debts, but not your income/expenditure.

Take some time, click on the link you've been given, give us an accurate SOA, otherwise it's like knitting fog !!!!!!

rouge100

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 2286.64
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2286.64

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 800
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 12.48
Mobile phone............................ 15.99
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 160
Clothing................................ 100
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 145
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 15
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1358.47


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................14527.....364.......24.9 (see above post for interest free details etc)
MBNA...........................1744......17.44.....26.9 (see above post for interest free details etc)
Overdraft......................1657......0.........18.9 (see above post for interest free details etc)
Total unsecured debts..........17928.....381.44....-


Monthly Budget Summary
Total monthly income.................... 2,286.64
Expenses (including HP & secured debts). 1,358.47
Available for debt repayments........... 928.17
Monthly UNsecured debt repayments....... 381.44
Amount left after debt repayments....... 546.73

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -17,928
Net Assets.............................. -17,928

rouge100

Worth noting my rent includes all the bills apart from broadband which I have down at a super cheap price.

Realistically the above is good, but I spend at least £5 a day on lunch honestly, I also buy clothes a decent amount, I am also paying for driving lessons right now & being young I do drink a lot - so the above is not a fair representation of my spending. It's somewhat obvious what I need to do, ie take lunch to work etc.

It also does not include gym which I pay £46 a month for. Expensive I know, but it is near my house and work and I use it 4 times a week, so for me that's one thing I want to keep. It gives me access to multiple gyms around London.

Worth noting my wage used to be A LOT less, this only changed 3 months back.

Maximum_Saving

Hello. I think that you should use a cash based budget and try to reduce all expenses that you can. Try to have a clothing budget so you don't spend a lot on clothes. It might be cheaper for you to take a packed lunch to work. Well done for having a very low cost broadband deal. Your gym deal sounds very so expensive. Dave Ramsey recommends the snowball method of paying off debt. With that you pay minimum payments on all debts and aim to pay off the one with the lowest amount of debt. When that is paid off you do the same with the next smallest debt. Good luck

rouge100

So I have just setup 2 bank accounts, one where my wage hits and all of my direct debits leave & another account where I will pay in expenditure every 2 weeks. I also requested it to not be contactless so I can keep track of it all of the time.

Do you think cash is a better idea?

enthusiasticsaver

Why on earth do you want to learn to drive when you live in London? Are you going to be able to afford to buy or run a car when you pass your test?

I guess you don't really have more than £500 spare each month or you would not have £18k of debt. Reduce clothing and groceries bill and stop buying lunch out everyday. Have you got a driving test booked already? I would say that considering the debt you have I would knock the driving lessons on the head until you are more secure financially unless it will help you in career.