Feel like i'm in a hole.

darkknight92

Hey all,

Just looking for some advice or even words of reassurance.

Current situation, I'm 26 and over the last few years I have built up a fair bit of personal debt, unsecured. Loans and credit cards.

I've always kept a budget with incoming and outgoing without much thought to credit repayments. However today I have faced it full on and im shocked I owe around £14k in total, two credit cards and a loan. This realization has made me feel fairly depressed.

I owe the following;
£8000 Halifax Loan
£2700 Halifax Credit Card
£3286 Barclaycard

I earn £1744 a month and my partner starts a new job in January and will be bringing in around £1200 a month.

At the moment my outgoings are;

Monthly
Rent/Bills (half each) - £300
Car Insurance - £57
Car Tax - £26
Halifax Loan - 17% APR - £169
Halifax Credit Card - 0% APR Until 2020 - £40 minimum payment, I pay £200.
Barclays Credit Card - 0% APR Until 2021 - £90 minimum payment, I pay £140.
Housing Benefit Repayment - £20
Child Maintenance - £200
AA - £10
Mobile Phone - £11

This leaves me with around £600 from which I pay around £160 a month on fuel. The rest is disposable.

Is there anything else I could be doing? My problem is that I see £xxx left as disposable and I get tempted to just spend it needlessly. Any tips to overcome this?

thanks
:beer:

Willing2Learn

darkknight92 wrote: »

… This leaves me with around £600 from which I pay around £160 a month on fuel. The rest is disposable.

Is there anything else I could be doing? My problem is that I see £xxx left as disposable and I get tempted to just spend it needlessly. Any tips to overcome this?

Try giving the £xxx a job before it can become allocated "disposable". Allocate the money toward a saving goal maybe. But give the money a job to do. You will then begin to be budgeting

theoretica

Can you overpay on the loan? Usually better to overpay on the debt that is charging you interest, than on the 0% ones.

tallyhoh

Can I say your half of the bills looks very low. £600 to run a household is not much. Do you not pay rent or mortgage?

Unicorn_cottage

Pay the minimum to the credit cards then overpay that to the loan plus the £600 disposable income! It will be gone in no time. Then use that money once it's gone to overpay the 1st credit card etc etc etc. This is called snowballing. You need to hit the loan first as it has the highest APR plus paying it off early will save you money.

http://www.whatsthecost.com/snowball.aspx

Fireflyaway

I second Unicorn Cottage. Snowballing would be good as you have quite a bit of disposable income.

Allow yourself a bit of spending money so you don't feel as though you are working for nothing and then use everything spare to put towards the debts. Pay the debts on payday so you can't use it for anything else.

Unicorn_cottage

Yes pay the debts on payday as Fireflyaway says - I do this as well - once it's gone to pay off the loan you can't get it back

Pixie5740

The £600 isn't really disposable income is it? You admit that £160 is spent on fuel for your car. What about groceries? Car parking? Birthdays and Christmas? Contents insurance? Dentist? Entertainment? If you really had £600 spare each month you wouldn't be in debt.

Get your bank statements from the last 12 months and put together a full statement of affairs. If there are still gaps start a spending diary.

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

enthusiasticsaver

I would suggest you overpay the loan then focus on building up savings. Do that after you get paid rather than wait and see what is left at the end of the month if you are an undisciplined spender.

enthusiasticsaver

In the future save up and pay car insurance annually. It is much cheaper than paying monthly.

Westie983

Hi,

I would reduce the payments to your 0% credit cards to just over minimum payment and put the money towards your loan as its higher APR then the credit cards.

Westie983