I need to get my life in order!

loey93

Hi Everyone

After a month or so of lurking around on the forums looking at everyone else's stories of becoming debt free or on there way to becoming debt free.. I thought I would finally bite the bullet and set up my own thread..

I am a 23 year old women who desperately needs to get her life (financial situation) in order! My money situation seems to have got out of control over the past year and I am finding it really difficult to pay off debts/save. I was in a 8 year relationship that ended a year ago, the breakup hit me really hard and I used money as a way to escape and make me feel better .. (Stupid I know) this is why I am in such a pickle now...

My aim now is to get my life back on track. I really want to be able to pay my debts off, reduce my bills and hopefully save for a house deposit. I am hoping this will give me the motivation and support to do so

sourcrates

Hi,

Welcome to the MSE forums.

Lots of help and advice available here.

We normally start by asking you to post an SOA (statement of affairs) gives us something to work with.

Any questions just ask.

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

(Remember to click "format for MSE")

loey93

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1450
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1450

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 285.1
Rent.................................... 120
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 45
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 5
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 805.1


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


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 16900....(285.1)....0
Total secured & HP debts...... 16900.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Lloyds TSB CC..................230.......0.........0
Lloyds TSB Loan ...............761.26....94.36.....0
Ikano Loan ....................1950......55........0
Total unsecured debts..........2941.26...149.36....-


Monthly Budget Summary
Total monthly income.................... 1,450
Expenses (including HP & secured debts). 805.1
Available for debt repayments........... 644.9
Monthly UNsecured debt repayments....... 149.36
Amount left after debt repayments....... 495.54

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -16,900
Total Unsecured debt.................... -2,941.26
Net Assets.............................. -19,841.26

enjoyyourshoes

Put your debts in some sort of priority order (highest interest rate first) and throw what you can at them to eliminate.

Have this as your first objective and be 'SMART' about it

Know where you are financially every day and to do this follow 3 simple steps (30:30:30)

1. 30 minutes ordering your annual/1/2 & 1/4ly bills . Calculate how much you need to accrue to pay these off when they are due and review this every time one of the bills comes to be paid.

2. 30 minutes a month reviewing your finances, what bills are coming up and can I get a better deal on when they mature (car ins, house ins, utilities etc)

3 Spend 30 seconds a day reconciling your bank account. This includes all expenditure you have made on that day through the account (cash w/d, switch, P@P, contactless and indeed all CC (if you don't then you won't have allocated the cash to pay this off once the bill arrives !)

(to do this you need to have a spreadsheet or pen and paper with a reconciled balance which takes into account all monthly SO/DD regular monthly payments plus the accrual you calculated in number 1 above.)


Really simple , no need for a YNAB which you have to pay for and you are on track of everything, make to a daily routine and make sure you review your spending to ensure you are not drifting/

But the most important thing is only spend on NEEDS not WANTS, and work out your behavioural triggers for spending (alluded in your post) and resolve how not to spend on WANTS,

Good luck

loey93

Thank you, I will set up a spreadsheet today as this sounds like a really good idea to keep my spending under control!

I don't live on my own currently as I moved back into the family home after the break up. I contribute £120.00 a month to the bills, and £150.00 a month for the food shopping.

My biggest concern is that I have been lumbered with an original loan of £2,500.00 for a sofa that I have never even sat on! (This loan was taken out when I was with the ex and he kept the sofa and left me with the debt) The loan amount is now £1,950.00 and I pay £55.00pm. I have over 3 years left on the loan but I am determined to get this paid off a lot sooner as although it is only a small amount each month I hate having it lingering over me! It is however an interest free loan...

I also stupidly took out a £1000.00 loan to consolidate store cards etc. This ends in February 2018 and costs me £96.00pm.

My car PCP is £285.00pm which is another huge expense if I am looking to eventually have my own place! (I can't get out of this agreement at the moment as I am in negative equity)

Then I have my credit card, £200.00 outstanding. I want to pay this off within the next 2 months and then rip it up and not use it again as it is lethal

sourcrates

loey93 wrote: »

Then I have my credit card, £200.00 outstanding. I want to pay this off within the next 2 months and then rip it up and not use it again as it is lethal

Credit cards are the devils work, they lure you in and keep you captive for life if you let them.

Burn it, burn it i say !!!

OneLife_OneShot

Just wanted to say good luck.

I owed £3500 on a slightly lower salarty and it took me 7 months - it is very doable and you will definitely 100% do it if you budget right and pay off the highest interest rate first.

Your debt to income ratio is not terrible and you should be saving soon enough for that deposit. Some days are hard but no reason you can't do this

nkkingston

The first question is do you really have £500 a month left after you've paid everything? If you did, you've had cleared that Lloyds credit card already and be done and dusted with the unsecured debts in six months. This feels much more like an aspirational SOA than an accurate one. Are you actually putting £100 a month in a savings account towards an annual holiday? Are you really spending nothing on any kind of entertainment whatsoever?

Start a spending diary to figure out what money is going where. Once you know what you're spending, you'll know where you can reasonably make savings and what you've actually got to throw at the debts and snowball them. Otherwise you'd going to get stuck in the cycle a lot of people do: convincing yourself that you can live off pennies, getting angry at yourself when you fail to do so, and spending to make yourself feel better. Debt shouldn't be a game of feast and famine, but a steady diet that gradually makes you healthier.

loey93

I forgot to fill out the entertainment section.. But that is my problem I have no idea what I am spending. I have around £500.00 a month for myself and I just squander it away and I know I need to stop doing this. I need to get back into the real world and start paying debts off and then after that I can start saving for a house deposit.

I forgot to mention I do have £1000.00 in an ISA but I am reluctant to touch this..

MallyGirl

try keeping a spending diary for a month. Write absolutely everything down - papers, coffee, bus fares, whatever. It will show you where the £500 goes and may well shock you into changing a few ingrained habits.
Good luck

System

As much as you want to hold on to that £1,000 in your ISA it will likely be more beneficial to use it now to clear debt....1% interest on your ISA versus 4% Loan interest? 20% CC interest?....either way unless all your debt is lower than your ISA interest its better to use it now as you're just losing money just for the sake of having 'Savings'

Work hard, save hard and you'll be out of debt in no time!!