Advice for a 35 year old

frenchplonka

Ok so Im in my 30's always had a bad attitude when it comes to debt saving and money in general ideally i want to change this now or in 2017 going forward new me and all that...

Current situation is im working in a job paying around 18k with my major out going being 215 a month in rent for my half the of the house I share with my Bro.

I have around 5k in debts which are all previous debts from when i was a moron and just got contracts, didn't pay bills and stuff the only BAD one would be a council tax bill of around 1.3k.

I have no saving at all not a single penny I have moved from job to job and have no idea of what my pension looks like but im guessing pretty terrible.

I want to invest have money put away so I can have something to my name in the next 30 years....

So advice please can I invest whilst still having the debt hanging over me even though its all unsecured, Can i start to invest without having a safety fund?

Paying of the debts having a fund seems sensible but I wont have anything saved either and then I wont feel like im going forward and its not like the companies are putting pressure on me to pay either

bigfreddiel

Pay off the highest rate debts first

Pay off debts affecting your credit rating next

Don't save or invest in anything that doesn't return st a higher rate than any remaking debts.

Then pay off remaining debts.

You could easily work out the cost of each debt per week/month/year and plan accordingly

If the investment doesn't beat the cost get rid of that cost.

Simple really fj

colsten

Fill in an SOA and post it on the Debtfree Wannabe board.

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

Think about saving when you have paid off your debts. Exception: pay into your works pension now, as your employer will pay into it too if you do.

economic

the flaw with the above comments is that with investments you dont really know what return you will get - hence it being an investment. so its not so simple and straightforward. one needs to take a view on what particular investments are expected to return and then decide if its better to use the cash to invest or pay off debt.

jimjames

bigfreddiel wrote: »

Pay off the highest rate debts first

Pay off debts affecting your credit rating next

I'd reverse that order. Surely paying off anything that drags your credit rating down is a priority even if it's a lower rate?

frenchplonka wrote: »

So advice please can I invest whilst still having the debt hanging over me even though its all unsecured, Can i start to invest without having a safety fund?

It's not a sensible idea to invest if you have no emergency savings fund. It's also not a great idea to save at get interest at a low rate when you have debt at a higher rate - but there can be situations when it is worth doing.

colsten

economic wrote: »

the flaw with the above comments is that with investments you dont really know what return you will get - hence it being an investment. so its not so simple and straightforward. one needs to take a view on what particular investments are expected to return and then decide if its better to use the cash to invest or pay off debt.

The OP is a very log way from any investments. They first need to pay off their debts, and then build up an emergency cash fund. A cash fund is savings, not investment. Investment can come as and when there's enough in the emergency cash fund.

frenchplonka

Sorry I wasnt clear these are debts that are now with collections etc tbh i not heard from 80% of them since april and most of them are over 3-4 years old without a payment being made.

frenchplonka

This is a SOA

[tt]Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1250
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1250

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 215
Management charge (leasehold property).. 0
Council tax............................. 35
Electricity............................. 10
Gas..................................... 10
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 12
Satellite/Cable TV...................... 12
Internet Services....................... 0
Groceries etc. ......................... 125
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
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)...... 0
Haircuts................................ 5
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 514


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
Total unsecured debts..........0.........0.........-


Monthly Budget Summary
Total monthly income.................... 1,250
Expenses (including HP & secured debts). 514
Available for debt repayments........... 736
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 736

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

[/tt]

bigfreddiel

Yep, your SOA helped, and I stick by my advice, simple and easy to implement.

I agree with the other advice about company pension, it's free money.

Now just do it.

fj

Ray_Singh-Blue

frenchplonka wrote: »

Current situation is im working in a job paying around 18k

So advice please...

I suspect you need to earn more. Seriously. Why accept £18K?

To invest you need to get rid of the debt and then accumulate some seed money.

frenchplonka

Why earn more?