Newbie! Aiming to reduce+clear debts (SOA inc)

marksta

Hi guys first post after reading the message board I thought it was time to get some help!

First of all I am a bit worried that the level of debt I am experiencing is a lot lower than some posters here but it is worrying me greatly so I hope to get some advice - mainly because I am scared it is affecting my relationship with my partner who is, let's just say, less careful with her cash! (we have argued about it often) These figures have built up over 3 years, as we first got together, got a rented house for a year and now have purchased our own home (just!). So I want to nip any future debt issues in the bud

Ok SOA (summary at bottom if you dont want to read the details):

My partner and I have 3 current accouts between us; a personal one each and a bills+mortgage account. (all with Lloyds TSB)

My personal account: £550 overdraft limit (currently £300 overdrawn)
Halifax CC: £1550 (currently 0% interest) but they wont give me more than £2k limit

Cahoot CC:£1350 (about 16% apr)

We also have an Lloyds TSB airmiles credit card which we use for petrol and shopping) paid in full each month (although it is getting trickier to do this)

OH account: £550 limit overdraft (currently about £450 overdrawn)
Lloyds TSB Loan: £1300 approx

Bills and mortgage account: £1000 overdraft facility (currently about £700 overdrawn)

Our mortgage is a Northern Rock (eek!) fixed rate which has a £3000 secured loan tacked onto it but that seems to be ok at the moment. (£709 per month/£125k total)

I also have 2 old current accounts from Cahoot which I transferred from in July (due to their woefull cheque clearing times and their frequent mistakes which often pushed me overdrawn)

Cahoot Account 1: £0 (can be closed)
Cahoot account 2: £750 overdrawn

So in summary:

Overdraft 1: £300
Overdraft 2: £450
Overdraft 3: £700
Overdraft 4: £750
Credit Card 1: £1350
Credit card 2: £1550
Personal Loan: £1300

total: £6400 of debt

We are earning a joint salery of approx £30k plus savings of £1100 although we are getting married in 3 weeks so this cash is to pay for that!

I think we've planned a moneysaving wedding, as the bill has come to less than £2500!! (the average cost of a wedding being £17k apparently!) :eek:

So what I want to know is what is the best way of clearing this as I want us to have a debt free future (minus mortgage of course) Should I take out a £6k unsecured loan? I dont really want to borrow against the house again but am afraid if I contact NR again they'll talk me into a secured loan. Lloyds TSB have eye popping unsecured loan rates of 20% so they're out.

Sorry for the long first post! Hope everyone's having a good day!

postingalwaysposting

mark it does look scary but you have faced up to your debt and now we can help. Can you so another soa with all your income/expenditure per month in it? that way we can suggest how best it is to clear your debts see ss sticky at the top of the page for help

marksta

thanks I admit I didn't do this so I'll have a look at the sticky and create a clearer SOA with income and expenditure and will repost

postingalwaysposting

marksta wrote: »

thanks I admit I didn't do this so I'll have a look at the sticky and create a clearer SOA with income and expenditure and will repost

dont worry mark, at least we got the main bulk of your debt in the first post. I must say though good luck with the wedding and sont worry it doesnt cost much the day is what you and you oh make it not the money involved

david_hellier

Clearer SOA please as above.

Jacks_xxx

:hello: Hiya sweetie,

I bet you're paying a heck of a lot of interest on that little lot!

Now is definitely the time to sort it out - whilst you're still on single figure thousands!

Have you tried punching all of the info into the Snowball calculator to see what it comes up with? It kind of makes you look at your debts in a different way - and it makes you very aware of what the debt is costing you.

http://www.whatsthecost.com/snowball.aspx

Congratulations on your impending nuptials:T and well done for being sensible with what it's costing! :beer: Have a fab day!

I'll look out for your SOA... (no pressure! )

Love Jacks xxx

marksta

OK here goes:

Joint income about £2000 a month

Mortgage: £709
Gas: £20
Electricity: £42
Water: £21
Virgin media (cable TV broadband phone) £70
Pet insurance: £13
Home insurance: £21
Life insurance OH: £12
Life insurance me: £10
Council Tax: £125
Car Insurance: £32
TV License: £12
Repayment for a fridge: £6
Accident/Sickness/Redundancy insurance me: £19
Accident/Sickness/Redundancy insurance OH: £13
Credit Card 1 repayment: £26
Credit Card 2 repayment: £25
Car loan: £100
Gym membership: £12
NSPCC donation: £2
Bank Account charge: £10
Lloyds TSB loan repayment: £40
Distance learning course: £60
Magazine subscription: £3
Catalogue repayment: £5
Petrol: £120
Shopping: £120

£1648

So between us we have £350 approx left after bills...that's a lot more than I thought actually. Would it be worth going down the personal loan route to clear the overdrafts?

findingmyownway

marksta wrote: »

OK here goes:

Joint income about £2000 a month anyway you can increase this? ebay? mystery shopping? 2nd jobs?

Mortgage: £709
Gas: £20
Electricity: £42 i'd check that you are getting the best gas / elec deals for your area and switch if necessary.
Water: £21
Virgin media (cable TV broadband phone) £70 sounds like a lot. i got some junk mail from them this morning offering the whole lot for £45
Pet insurance: £13 is this reall necessary?
Home insurance: £21
Life insurance OH: £12
Life insurance me: £10
Council Tax: £125
Car Insurance: £32
TV License: £12
Repayment for a fridge: £6
Accident/Sickness/Redundancy insurance me: £19 check you aren't double covered for these with your life insurance / mortgage etc
Accident/Sickness/Redundancy insurance OH: £13
Credit Card 1 repayment: £26
Credit Card 2 repayment: £25
Car loan: £100
Gym membership: £12
NSPCC donation: £2
Bank Account charge: £10 do you need a premier bank account? why not switch to a standard one?
Lloyds TSB loan repayment: £40
Distance learning course: £60
Magazine subscription: £3
Catalogue repayment: £5
Petrol: £120
Shopping: £120 is this food shopping? if so well done its pretty good!!

£1648

So between us we have £350 approx left after bills...that's a lot more than I thought actually. Would it be worth going down the personal loan route to clear the overdrafts?

Hi and welcome :beer:

Your first job should be working out where that 'spare' £350 goes. Have a look back through your bank statements or keep a spending diary for a while.

Have a look at www.whatsthecost.com to work out which of the cards/overdrafts you should be paying off first. I'm not sure paying for food on a cashback CC sis the best plan for people in debt - would it be easier to stick to a cash budget for a while?

marksta

Hi thanks for your reply - some great ideas there. I'm definately going to do a spending diary as I dont seem to have much to show for my expenditure every month...

I am currently selling lots of stuff on eBay, although I do not have many assets that would make a significant amount of money after listing/paypal fees etc. Mainly DVDs etc that would fetch a couple of quid max. I had planned to do a car boot but the summer was a washout!

Virgin media figure is inclusive of telephone calls and line rental too - although I could get slower broadband and the lower TV channel package.

I took the premier bank account out as the features it gave me (breakdown cover, card protection, travel insurance etc) would have costed much more if I took them out seperately.

My partner and I are very lazy cooks and often have takeaway which is a big chunk of the spare money. We don't smoke or drink though so that's something! The insurances are ok and the pet insurance is for piece of mind - I have 2 cats and they get into all kinds of scrapes!

With the cash-back CC - it's actually the Duo AirMiles card which although it carries a mahoosive 19.9% apr, it gets paid off each month in full. Plus it's totting airmiles up quite nicely so they can be used for leisure breaks later next year.

I am going to contact EDF energy tomorrow to ask them to provide me with an aunnual spend statement for my gas/electricity as it seems the simplest way of comparing companies on uSwitch.

I think I am going to work out a timetable for paying my debts off and once they're clear I'll work on overpaying the mortgage. This can also work as a "rainy day" fund as I can draw some of the overpayment money back should I need.

Sometimes it''s just a case of getting things into perspective. Now I have laid all my debts out in front of me and not kept them stuffed in my head they seem a lot more manegable and can see some light at the end of the tunnel!

(how did I cope without this website??!)

tealady

How did ANY of us cope without this website? Badly i suspect,. I know i made some terrible financial decisions in my life, thats why I will still have a mortgage after I retire!

postingalwaysposting

mark, wow you are doing so well, well done on ebaying... yes it does take time and yes you may not make much however what you do make could be going against your debts i think your soa is very busy but most of it nessacary. I think its just tidying up these odd spends on takeaways/drinks/mags and throwing all your spare cash at your debts. You didnt build the debts up over night and niether will they go away over night but i believe with hard work and your determination you will get there much quicker than you think :T good luck