Please help my debt situation/spiral

kpbubbly

Yes I will try to cut down on the groceries to £5-£6 a day, perhaps I didn't add it up properly because on the weekends I actually eat free as I work in a restaurant and save on the food costs there haha.

I'll say my updates food costs is £100 a month this way.

kpbubbly

Which credit shall I look to pay off first? Shall I talk to the PDL debt management plan and resort to £1 payments for all? and what do you suggest to I tackle first, Secured loans debt? Credit cards? PDL on DMP?

Thanks

StopIt

kpbubbly wrote: »

Which credit shall I look to pay off first? Shall I talk to the PDL debt management plan and resort to £1 payments for all? and what do you suggest to I tackle first, Secured loans debt? Credit cards? PDL on DMP?

Thanks

Always tackle priority debts first.


In your case, secured debts first, credit cards second, PDL last, so long as they're not charging further interest. By law they cannot charge more than double the initial capital so that's the line in the sand for them, but as before, do not take out further credit with any of them.


It's going to be a tough few months with the SOA you have, but get the secured debts out of the way. Write to all of your PDLs you're paying stating they'll need to wait a few months before you'll be able to deal with them.

nkkingston

Try going through your bills to get an idea of what you're actually spending on food. Your estimation is definitely out - if you're eating out for breakfast every day £2 is way too low, but if you''re having, say, scrambled eggs on toast every morning, it's way too high (think about it - you can get a loaf of bread, a block of butter and a dozen eggs for around £5 - that's nearly two week's worth of breakfasts with butter left over). If you're trying to keep up a high calorie count on a small budget, look at what you can bulk buy and pre-prepare, like overnight oats.

EssexHebridean

That's a "guesswork" SOA. You're accounting for things that you're not actually setting money aside for aren't you - like car maintenance - "I guess £50 a month?"

The best way of doing an SOA is to start with it reflecting the way things really are right at this minute - there's no point in guessing stuff, or writing what you think you "should" be doing, because that just creates a false picture - do you see? You can say you're spending x on this, y on that, and Z on something else, but if in fact what you're actually spending is 50% of the first, 99% of the second, and 250% of the third, the books won't balance. At the moment you know your figures don't balance anyway - so for the next three months you need to screw EVERYTHING you possibly can down to the basics - and cut as much slack from your budget as possible to minimise further damage. On reflection I agree that trying to pay off the car is the right way to go - but you must be committed to selling it as soon as the finance is paid off and once you have sold it you MUST put every penny towards paying off debt. That's really important. Have you thought how you will proceed then in terms of things like seeing your girlfriend? Obviously Norwich every weekend will not be achievable really - will you alternate that she comes to you once a month and you go to her once a month perhaps?

I'm going to echo what Sourcrates said earlier as well - DON'T BORROW ANY MORE MONEY - put that credit union idea RIGHT out of your mind - first up you need to focus on learning to budget and getting your current debt paid off - and until you've done the first, and have a budget that balances and a good while of experience of living within it, any more credit is a definite no-no. If you can realise £3500 for the car that will help - and if you can claim back any charges relating to the PDL's then that may help as well - but once the car has gone just divert your monthly surplus to clearing the remainder of the debt one thing at a time.

Stick at it - make what savings you can, and take it one step at a time.

117pauline

It must be pretty scary to be where you are at the moment.

As EH mentions, this SOA isn't an SOA unfortunately.

I am not sure how you have come up with these figures as you say that you are under a debt management plan. Is this with a company charging you for their "help"? If so please look into moving to one of the companies like Step Change.

I would suggest you actually do something very painful. Sit down with your bank account information and look back over the last six months to find out what you have really spent.

I notice you talked about the gym but you haven't shown it in your SOA unless it's in the Entertainment section

Where is the £4000 credit union loan showing? Usually you have to pay some towards saving account as well

Groceries - you need to learn to cook at home rather than buying your meals out.

As others have said, at present this is an unsustainable situation but that doesn't mean you are not able to rectify it. However it will mean some hard choices until you finish paying for the car.

Perhaps you can look at ways to boost your income whilst in London as your salary looks as though it is only just above minimum wage. A restaurant job in London will almost certainly pay as much as the one in Norwich. Survey sites will not earn you a great amount but will improve your situation. Have a look at Boost Your Income section of these forums.

In a nutshell:

• Contact Step Change
• Analyse bank statements to get the real amounts spent
• Complete new SOA with more exact figures
• Increase your income
• Prepare food at home

I hope these suggestions will help you and not put you off!!

Congratulations on coming here to ask for help. That is a really hard step to take but you have to get a real picture of your starting point so you can improve the situation

Good luck, keep posting and we will be with you encouraging you every step of the way

Here's to a good week
Pauline

EssexHebridean

^^^
Brilliant post from Pauline - OP, take note and follow the steps, please!

WorriedFriend2017

Only £20 per month for entertainment, really? Where did you factor in the gym costs?

EssexHebridean

WorriedFriend2017 wrote: »

Only £20 per month for entertainment, really? Where did you factor in the gym costs?

The gym could well be a work-perk - that's not uncommon with central London firms.

leslieknope

£320 just for food for yourself??! i don't even spend that and i eat out about once a week! you need to cut that down. and that car insurance is really high. as a new driver i was only paying £86 a month and in the second year it dropped. i take it you have been driving for longer than a year? is that really the cheapest insurance you can get? what kind of car are you driving for £500 a month on HP?