Unsecured debts

dk250

Thanks I've tried to be as honest as I can looking at my statements . No current budget for emergencies I know I need one , holiday is already booked for June so been paying £50 a month off it . I don't have as much as the soa shows at the moment at the end of the month . I have private medical insurance and loss of income insurance which is the £50 a month. . Don't currently put away for presents but obviously do buy them . Got 18 months left on mobile

Fosterdog

You need to keep a spending diary for a few weeks logging every single penny. If your SOA shows £200 leftover but you don't have it then it us going somewhere.

Your TV and internet services are high, I only pay £22 a month for everything. Shop around for new deals or lower the package you have. Netflix may work out cheaper for you @£6.99 a month if you drop your TV subscription and as long as you don't watch live tv you could then also drop the tv license.

Groceries could be cut back a bit more as a single person, look into batch cooking and freezing portions to save time and money.

Clothing spends could stop for now, do you really need £300 of new clothes a year? Same with hair cuts, find somewhere cheaper and have it cut less often.

The pet insurance is quite high, how many is it for and have you shopped around? Same for car insurance, look at comparison sites for a better deal.

You can't afford £75 a month on entertainment right now, not with paying £50 a month for a holiday and owing so many people so much money, you need to cut back your lifestyle a bit.

Do you use the private medical insurance at all? If not get rid, for just £150 a friend recently paid to go private for a relatively minor op that had an 18 month waiting list on NHS so hardly breaking the bank as a one off. The loss of income insurance is a false economy, you are getting into debt to avoid potentially getting into debt if you lose your income.

Your priority now should be paying off what you owe, with your income if you cut back to the essentials you could be easily debt free within 2 years. I've just done a quick calculation dropping the non essentials, cutting back on your internet and tv to £40 a month and saving £100 a month emergency fund and you could easily have £1000 left each month for debt repayments on top of the £248 already on the secure loan.

If I were you I would prioritise paying the card due to lose the 0% in April, then move the extra payments to the one due in October then the one due in 12 months only because once they are out of the interest free period they are likely to be a fair bit higher than the 7% loan. Once they are all paid off throw the lot at the loan and in a little under two years you will have £1250 disposable income each month, then you can get back to buying clothes, going on holidays, upping your entertainment etc. With no reason to ever get into debt again with still adding plenty into savings for the future.

dk250

Thanks for advice - would getting 1 loan paying off debt and closing credit card accounts not be a better option ?

Fosterdog

dk250 wrote: »

Thanks for advice - would getting 1 loan paying off debt and closing credit card accounts not be a better option ?

Not really with your cards on 0% and the loan only 7% you have more than enough income to cover you outgoings. Even if you did qualify for another loan you certainly won't have 0% and unlikely to get as low as 7% on another one. All you'll be doing is adding to your existing debt and paying more interest, you'll end up paying it off over a much longer time too.

nkkingston

dk250 wrote: »

Thanks for advice - would getting 1 loan paying off debt and closing credit card accounts not be a better option ?

Only if you want to pay more money over a longer period? No one's going to give you a 0% loan, after all!

EssexHebridean

dk250 wrote: »

Thanks for advice - would getting 1 loan paying off debt and closing credit card accounts not be a better option ?

No. Why do you think it would be?

Before you do anything else you need a functioning budget that is tried, tested and works for you. Otherwise, you'll get the loan, and then "something" will "take you by surprise" and a credit card will come into use. And from there it's a short step to where others on here have found themselves - several consolidation loans, CC's racked up again, and a complete inability to pay everything each month. Consolidation loans ONLY work for people who have a total and absolute grasp over their finances. Until you reach the point where you never have a "surprise bill" then you need to avoid that temptation.

Out of interest, add up how much spare money you'll have each month once you've paid the debt down. I seem to recall with the tweaks in the SOA that have been suggested, it totalled somewhere about £750 a month. Incentive, much?

System

Rent seems quite high. Not sure about the house prices around your way, however perhaps think about renting a place £150 cheaper? Also, have you thought about using Netflix, Amazon or better still Kodi instead of £40 Sky TV?