Need to clear debt, earn plenty but it all disappears :(

Toodlepip123

Just need to get this down to see where I'm going wrong...

I earn 40k/year with 20% bonus, but this is irregular so I don't factor it in.

I currently have one CC with £800 on it, an overdraft with natwest of £1.300 and another one with A&L of £250. I also owe a family member £1,750.

I cleared another two creditcards in the past few months, but with what I'm earning I should be able to clear most of this quickly - however it seems to be taking me much longer than I think it should, and money seems to be running through my fingers each month on what I can only qualify as unecessary crap.

My budget is £600 rent, £150 home bills, £75 student loan, £40 mobile phone, £20 contact lenses, and I put £500 into my A&L account for misc spending.

This totals £1385, which leaves me roughly £600/month to throw at debt. I agreed to pay £250 / month to the family person which is annoying given that it's an interest free loan, but fair enough. That would leave me £350/month for the rest.

I've tried asking A&L for an increased overdraft so that I can transfer my natwest one over, as it'd move the debt from 20% to 7%, but A&L keep refusing (my credit rating is good so i don't know why)

Obvious target should be the overdraft, but each £350 feel liek a drop in the ocean, whereas I could take the £500 out of A&L and add the £300 and clear my CC, and then use it for misc spending. This would save me some interest wouldn't it?

Argh, all confusing. It feels liek there are too many pots, and I can't understand why my debt repayments are so low given my income.

msmicawber

Hi Toodlepip.

From your post, I guess that either your budget isn't comprehensive enough (you haven't mentioned food, travel, toothpaste, that sort of thing) or you're getting out cash and squandering it on 'stuff'.

If the former, then I'd recommend that you look at Southernscouser's sticky post at the top of the forum and make a Statement of Affairs which you can post on here for some more advice. If, however, you know it's the latter, I'd recommend carrying around a notebook and writing down every purchase - every last packet of chewing gum, etc. - to really see where your money is going.

Best wishes.

Toodlepip123

Hi msmicawber

Thanks for taking the time to reply. I think you're probably right on both counts. I'll go hunt out that stickie and write up a SOA in a bit.

I do think i squander cash on rubbish I don't need. It feels like my head is in the right place and I see the logic of not spending, but then I hand over the cash and feel stupid afterwards. I'd definitely admit to an addiction/habit to buying things.

I actually budget £80/week for misc, but still manage to spend the full £500 i put aside plus extra, so something is obviously wrong.

Shineyhappy

Hiya,

If I were you, after posting up your SOA and following the relelvant advice, I would get all my bills to come out as direct debits and then withdraw my spending money for the month and learn to leave the plastic at home. You will be amazed how much you spend on all the extras that seem to happen.

You pop for a newspaper and end up buying a chocolate bar, bag of crisps, bottle of coke and a magazine so a 40p spend turns into more than a fiver! There is a spending challenge (Moozie/postingalwaysposting) and there is CAFCgirls Uneccassary challenge, I think maybe you should sign up to one of these and make sure to keep a spending diary!

Make sure you become a regular to this board as thar keeps the motication up!

Best wishes

Toodlepip123

Just wanted to update my thread

I had a couple of extra credit cards that I have now cancelled. My CC is paid off, and this month I still have £200 to play with. i did think about buying myself a treat, but im going ot thailand in march so I'm gonna chuck it at debt instead.

My overdraft with A&L has increased to £300, as I tried to shift the expensive Natwest overdraft tothem but they only gave me that bit extra. And of course I never reduced my natwest overdraft. HOWEVER I'm going to reduce my Natwest overdraft by £200 with that extra cash I have, so final tally is:

£300 A&L
£1100 Natwest

I've managed ot pay back some more to family member so this is now down to

£750 family member.

This gives me a total of £2150. So a drop of £2000 roughly so about %50 in 5 months.

I aim to pay family member £250 a month as usual, and throw at least £500/mth to the rest with a goal of finishing in May at the latest. I'm scrabbling for cash elsewhere and selling things off on amazon with the hope of actually getting to May with money to dump in an ISA

As an encouragement, the total I can save per month after my debt is cleared is thus at least £750/mth. This means I can max out an ISA and get stuck into a savings account by the end of the year easily.

itsallaboutyou

Just echoing the advice of peeps above!

I earn a similar amount to you and I know where every penny goes!

Definitely try and budget yourself to a strict regime of £x a week and you'll see those balances reduce extremely quickly!

It may also be useful to write a spending diary?? But definitely get your outgoings on DD.. you can then budget for them


@ msmicawber - cracking name - Mr Micawbers philosophy is how I choose to live my life!

msmicawber

Excellent news, Toodlepip. You're going great guns. It's so satisfying to see the debts reduce, and to start planning how you're going to save etc. in the future. I think that's when you know that you've truly changed your attitude to money so that you're in control.

Thanks, itsallaboutyou. When I joined the site, I realised that I'd known his philosophy all my life and thought it rather simplistic, but after messing up, getting neurotic then getting straight, I realised that it was just common sense and had become my philosophy too.

Toodlepip123

Thanks for your support, and sorry for not replying sooner!

Just wanted to finish off this thread to say I finished paying off my debts (apart from student loan but only another year's worth of payments on that) and am now £2400 in the black

Bowski_1011

YAY!! congratulations!

msmicawber

Wonderful - no wonder you had no time to post!!