Almost 26 - no savings, 3 credit cards, and a finance agreement - savings? HELP

National_Debtline

abbi-cr91 wrote: »

In regards to doing an SOA - i dont know if i am being a bit dense but i cant seem to find a link anywhere, could anyone give me guidance to finding this?

Hi again abbi-cr91


You can find the SOA here
http://www.stoozing.com/calculator/soa.php


Susie
@natdebtline

abbi-cr91

right so little update,

still havent been able to get onto that Stoozing website, nightmare. So i've looked over my statements over the past month and on average im spending on average:
- £450 on shopping/food e.g tescos
- £115 on eating out
- £110 on other things such as event tickets etc
- £150 going out (this varies drastically from month to month to be fair)
- £50 withdrawing money
- £156 for car and tax
- £150-200 credit card (minimum payments)
- £16.99 gym
- £250 rent
- £70-90 petrol
-£73 for phone inc insurance
-£14.99 deezer

This has made me want to smash my head off a brick wall knowing i spend that amount of money on food alone when i live with my parents so at least i know i can make a big saving there - i need to start withdrawing a limited amount of money to live on per week i feel that will help me greatly.

I have worked out if i choose one of the payment options for my car which will be 170£ a month for 3 years or 240£ a month for 2 years yes i will be paying over a £1000 more than my car is worth, but at least i can manage it and get it paid.
I also have looked at loan eligability and if i was to get a £6000 loan to pay off my debts at 3.3% i could have that and my car paid off within 2 (or 3 depending on car option) years.
The only thing is the 3.3% APR - as it is representitive MSE cant guarantee thats the percentage i will be given - so now i am nervous about applying for a loan in case my percentage is much higher, then it will be on my credit score.

So in a bit of a pickle with my next step if anyone can help! (AGAIN)

Thank you all x

EmmaMicawber

I'm no expert but looking at your list of outgoings you just posted you have huge potential to cut down.
It's just a matter of deciding what your priorities are and what you are willing to give up to achieve buying your car and paying off your credit cards.

You spend over £800 a month on socialising and non-essential food!!
On that basis you could comfortably afford 12 monthly repayments on your car.

There are a few apps out there that might help you track where all this money is going.
It's a great idea to get it under control now so you free up some money for what you really want in the future.

YNAB is very good, And there is one called squirrel.me which is supposed to stop you frittering money away without thinking about it.

I also found Dave Ramsey good for motivation (he's on youtube) though he really doesn't like car payments.

Make the most of living with your parents you'll never have such low financial commitments again

EssexHebridean

Well done for listing everything out anyway - yes, the SOA calc has been down for a while -
frustrating!

I'll put my comments in red as usual...

abbi-cr91 wrote: »

right so little update,

still havent been able to get onto that Stoozing website, nightmare. So i've looked over my statements over the past month and on average im spending on average:
- £450 on shopping/food e.g tescos For one person?! I spend a third of that amount each month and feed two of us, and we eat well, trust me!
- £115 on eating out Ahhh....so in fact we're really talking nearly £600 a month on food, right?
- £110 on other things such as event tickets etc Adding your "entertainment"
type things together that reaches £310 a month...
- £150 going out (this varies drastically from month to month to be fair)
- £50 withdrawing money
- £156 for car and tax
- £150-200 credit card (minimum payments)
- £16.99 gym This is actually reasonable and bearing in mind the savings you can make elsewhere I'd be inclined to leave this
- £250 rent
- £70-90 petrol
-£73 for phone inc insurance Get rid of the insurance - treat your phone with care, and don't lose it. if you do household insurance will cover it - you'll just have an excess to pay and a lot of apologising to do to your parents for killing their no claims bonus...
-£14.99 deezer

This has made me want to smash my head off a brick wall knowing i spend that amount of money on food alone when i live with my parents so at least i know i can make a big saving there - i need to start withdrawing a limited amount of money to live on per week i feel that will help me greatly. Agreed - switch to using cash as this will make you think about what you're spending.

I have worked out if i choose one of the payment options for my car which will be 170£ a month for 3 years or 240£ a month for 2 years yes i will be paying over a £1000 more than my car is worth, but at least i can manage it and get it paid.
I also have looked at loan eligability and if i was to get a £6000 loan to pay off my debts at 3.3% i could have that and my car paid off within 2 (or 3 depending on car option) years.
The only thing is the 3.3% APR - as it is representitive MSE cant guarantee thats the percentage i will be given - so now i am nervous about applying for a loan in case my percentage is much higher, then it will be on my credit score.

So in a bit of a pickle with my next step if anyone can help! (AGAIN)

Thank you all x

OK so at the moment I make it that you're spending out around £1660 per month - and you said you are on 22k a year, yes? If my maths are correct that explains where the credit card debt is coming from then!

The good news is that you've realised where the problem is and can sort it. the bad news (if you want to see it that way) is that in my opinion you are definitely not a good candidate for consolidation as at the moment you're simply not managing your money in terms of income and outgoings at all. I'd suggest that your first step is to put together a proper budget and spend 6 months living within your means, hammering away at the debt and putting aside a small pot of emergency savings, before you even think about consolidating with another loan.

savings you can make easily:
Food/Eating out. Not sure if you buy all your own food for home but it sounds as though perhaps not from what you've said. Assuming you do them set yourself a budget of max £120 a month to cover it.
Entertainment: In between eating out, tickets etc, general "going out" and money from the cashpoint you're spending out £425 a month. You're young and I get that you want to spend time with your friends,. but if you rein in the spending a bit you'll be doing THEM a favour as well as yourself - and more so if you teach them a bit about personal finance and budgeting along the way! Budget £200 a month max to cover that lot - and start choosing more carefully what you spend your money on. Think about arranging a movie and popcorn night at someone's house rather than going out, or staying in with a group and ordering pizza rather than eating in a restaurant, from time to time.
Mobile: Are you tied into a contract? if so you can probably lose the insurance easily enough but may not be able to reduce your costs much more. If you're out of contract or at the very end then see what you can get I the way of SIM only deals - I pay around £11 a month for unlimited calls & texts and 4gb of data.

On the car - see about getting a loan to just pay the balloon on this - but not including any other debts. A better bet might be to hand it back and get a smaller loan for a cheap runaround until you're clear of debt. Personally that would be my favoured route I think. Once you've paid off the debt you can then start saving your surplus each month to finance a nicer car once you've saved enough and then subsequently for a house deposit, perhaps?

In terms of savings you can make on your outgoings, you can easily free up £500 a month just by making changes to the stuff identified. To give you a bit of a jolt, do you realise you're currently spending half your GROSS salary on food & entertainment? Around £11k a year - that is a LOT of food and nights out.

Knuckle down, make the savings, learn to manage your money, be the person your friends look to for help managing THEIR finances as you're "good with money" - that's a great thing. One thing that stands out on your SOA is that you don't include clothes or holidays in there anywhere - which suggests that you're underestimating your spending even there.

Do the maths - work out how much you can "not spend" and throw at debt each month and see how long that leaves you before you're clear of debt. Bet you could clear the cards in not much more than a year if you approach it right.

Oh - and cut up the cards and stop using them. You might want to do that first...