Advice Needed

SophF

Hi, I'm hoping someone here can help me.

Over the past few years, I've been working my way up the career ladder, and have been in a situation where I have had to live beyond my means for quite an extended period of time. I am now fortunate enough to be in a place where I can live comfortably, and I would like to begin to properly pay off the debts that I currently have, but I don't know where to start. I have copied a SOA below, but for full disclosure I work on commission. The SOA is based on my basic salary, which I very rarely have to rely on. My average monthly income is more around the £2000 mark. Also, I have a car on a PCP agreement in the name of a family member (as my credit score wasn't good enough), which I pay £150 per month for. This comes to an end next year.

The loan was originally £2.5k over 2.5 years (I think) and I only have 6 more months' payment on that.
The credit cards are the big things I want to get rid of. I also need to start a savings pot for a rainy day; especially as I work on commission so need a little around for the months that don't go so well.

I haven't included my student loan or pension in the SOA as this comes out before it hits my account - I assume this is correct. I'd love to be debt free before I'm 30 in 2020 if this is possible, whilst still being able to have a life. Any advice will be gratefully received, thank you!

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1667
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1667

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 413
Management charge (leasehold property).. 0
Council tax............................. 75
Electricity............................. 15
Gas..................................... 20
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 6
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 250
Clothing................................ 50
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 39
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 50
Holiday................................. 100
Emergency fund.......................... 20
Total monthly expenses.................. 1303


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Aqua Credit Card...............1228.84...36.96.....39.9
Barclaycard....................654.......35.36.....30.31
Vanquis Credit Card............468.27....26.07.....39.94
NatWest Loan...................637.......114.7.....0
Overdraft......................2000......35........0
Capital One ...................733.97....30........39
Total unsecured debts..........5722.08...278.09....-


Monthly Budget Summary
Total monthly income.................... 1,667
Expenses (including HP & secured debts). 1,303
Available for debt repayments........... 364
Monthly UNsecured debt repayments....... 278.09
Amount left after debt repayments....... 85.91

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -5,722.08
Net Assets.............................. -5,722.08

Reproduced on Moneysavingexpert with permission, using other browser.[/i]

Karonher

A few things I noticed where the are things that seem high/low. If the SOA is just for one then the food budget could be cut. Another is that the TV license should be double what you have put.

Are your gas and electricity payments really that low?

SophF

Karonher wrote: »

A few things I noticed where the are things that seem high/low. If the SOA is just for one then the food budget could be cut. Another is that the TV license should be double what you have put.

Are your gas and electricity payments really that low?

I house share so I essentially pay half of all the bills, hence why they look low on here.

I have included toiletries, cleaning products etc. into the groceries section so, whilst I could probably cut it, it's not purely on food.

In all honesty, I am living well within my means at the moment and don't feel I need to cut down on anything. It is more which debts to start paying off first, and how best to do so.

savetosave

Ok if that is the case, how much per month extra do you think you have left? You need to look at the interest rates on your ccs to decide which to pay first. I would start with Vanquis as it has high interest and a relatively low balance. Then snowball the payment you usually make to this card on to the next. All the rest just pay a little more than the minimum, even if only £1 extra on each. Set a repayment amount on each now so that they don’t decrease as the balances go down.

Also, it might be worth doing a soft search to see if you can get a 0% balance transfer to move any more of the money over.

Karonher

As savetosave says - pay over the minimum on everything. I would look at the overdraft as that can be recalled at any time.

tallyhoh

As you can live okay on the SOA above (groceries for one £250 is an awful lot even including cleaning etc) & your minimum payments are being made, use your bonus to clear debt.
Two ways of thinking about this:

1) is starting with the balance with the highest interest rates

2) is clearing the smaller balances first (see Dave Ramsay on youtube)

best of luck

BabyStepper

Your interest rates are massive and this will have a real impact on how quickly your payments pay off the balance. Aqua, Vanquis and Capital One are the cards that need to be attacked first. I would go with the smallest balance card first (Vanquis) that you should be able to pay off over 2 months with your bonus. Then onto the next one.

I would agree with others that your food/toiletries/cleaning budget is quite big. Try £200 for a month adn see how you go. You can switch down a brand and also look for bargains. An extra £50 per month would make a big difference.

Good luck. You look as though you have plenty of wage to start addressing this. No reason why you can't succeed.

Edit: don't worry about your overdraft yet. They won't call it in while you have such a good wage going in.

Dobbibill

If you can live comfortably on your SOA then use everything left over including your increase in pay each month to pay down the debt using the snowball method.
Although an overdraft can be called in at any time with the APR as high as they are, maybe opt for the order below.

Description....................Debt......Monthly.. .APR

Vanquis Credit Card............468.27....26.07.....39.94 this could be gone in 2 months if you earn over & above your basic salary.

Aqua Credit Card...............1228.84...36.96.....39.9 make sure you pay more than the minimum on this and the ones below as there are new rules with minimum payments that may catch you out - even a £1 extra each month. Then snowball from here once your Vanquis card is paid off.

Capital One ...................733.97....30........39
Barclaycard....................654.......35.36.... .30.31
Overdraft......................2000......35....... .0
NatWest Loan...................637.......114.7.....0 Is this really 0%?

Any cut backs you can make on your SOA will see you pay less interest overall if you throw the difference at the debt too.

All the best - you've got this

flubberyzing

Immediately your grocery budget jumped out at me as something that could be easily halved and then some.
I'm also a single person and my monthly budget for food, cleaning, toiletries, is £70. Although even setting it at £100, you'd be quite happy.

Could you stop buying clothes for a few months as well? Doing that, plus cutting the food budget, would save you £200 a month. Within a year, you'd have paid off nearly half your debt, without REALLY having to make any serious sacrifices. £2400 in a year. £4800 in two. You'd be free and clear in less than 3 years.