Help Please, I think I am panicking over nothing but I need advise with money! :(

ThatLondonFella

Hi MSE Forum,

First post here!

So, I recently moved to London and the rent is £800/month, which is a lot for a room but being close to work is convenient given how much I would save on travel by not living in a central location. I'm earning £28,100 annually and have £9,600 on rent annually. I'm currently using my debit card to stay afloat and have an overdraft of £2,800 with £28 left before I go over the tipping edge. I've also got an AMEX card that I've got £490 on but I plan on cancelling this as the £150 fee is too much! I've just applied for a 0% interest credit card for 28months with Virgin Money, but I am not sure if that is wise decision or not...I've got no other money, so it seems like a good idea but I will need to be responsible with it. I've got no car payments, mortgage or anything like that.

I had around £4,000 in savings, but due to some family issues helped my sister out as she's in Uni so I helped out. However, I will not be getting this money back anytime soon until she finds a full-time job to start paying me back.

I'm really just looking for some advise to help me get out of this mess I've got myself into. Any tips or advise for saving and being strict and getting on the right track? How much should I be putting away etc? Is it possible to get out of this mess??

Many thanks for your time!

Kind regards,

ThatKiss

Hi,

I'm not the most experienced around here so hopefully someone else will be along shortly to impart their wisdom; however...

Generally its thought that your housing should take up no more than 50% of your income. At approx 33%, you're doing well on that score. However by London standards I think your wage is on the low side so that means there may be issues elsewhere.

Are you happy/able to post an SOA? The thought is that the wider group could identify savings that will help you run a tight ship. Being so close to your overdraft limit isn't ideal but isn't the end of the world, so hopefully we can help reduce that.

In terms of the loan you've given your sister, is there any way your parents could help out on that score? ie they repay you (even partially) and your sister repays them? having that money available might help while you stabilise yourself which is always necessary after a move.

Craig1981

does the room include council tax, water, gas, electric, TV licence?

if so, majority of living expenses are costing you 30% of your wages, which is not bad at all...

leaving you approx £1k each month is better than most, so will come down to budgeting, where you spending money, and where you can cut back

having a 0% purchase card is good, so long as it is used properly. use that each month, payback a £1 more than minimum payment, until overdraft is cleared. the APR with Virgin will be a lot less than what you paying on overdraft fees at the moment.. cancelling Amex is a good shout to avoid the charges as well.

as suggested, posting a full SOA will help show where you can cut back, what you can save on etc. it can be found here:

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

WhenIam64

Is this £28,100 gross? And is it £22,500 net?

https://listentotaxman.com/28100?

Perhaps working a few hours in the evening might help. Only go somewhere paying a living wage.

PasturesNew

Your figures, to me, look like "loaded". You're not "in a mess".

£800/month "inc bills" leaves you with a lot. Indeed, many agents would consider you'd need a salary of £24k to rent a flat where you also had to pay all the bills (say £120 council tax, £100 utilities, etc).

You have about £1k/month "left to live on". If you compare that to "somebody on the dole" who'd have rent paid and then get JSA they'd have about £300/month to live on. So you should be able to live on "£300/month + cost of getting to work".

You need to just think differently about how much you have, then see what you spend it on and make changes there.

Every £1 in your pocket can only be spent once, so spend it wisely. See where there's waste and cut it back/out. It's the little things people don't think about that gobble up the money.

MallyGirl

do you buy takeaway coffee, lunches etc - if so then stop and make a packed one
Start a spending diary - for 1 month write down absolutely every penny you spend and what it was spent on. It will be an eye opener on the waste.

Sanctioned_Parts_List

I'm a little surprised at the glibness of some of the replies you've had so far. As far as I can see, you currently have no basis to determine whether you have a need to panic or not.

I think half your fear comes from not knowing your present financial status - you need to assess your actual income and spending. The SOA calculator (link) is useful for this, but you can also make your own spreadsheet or use another app. There's no requirement to post it on here unless you want the board's advice on lifestyle adjustment.

If your SOA or calculation shows that you have a surplus after rent, food, bills and reasonable entertainment are taken into consideration, then you have no problem. Save the surplus to build a defence against the unexpected. If you find yourself in negative numbers, then you have a problem and will need to cut back your expenses until they're lower than your income.

Having a credit card to guard against large unexpected expenses is no bad thing until you have some savings, but be very careful that you don't start using it for basic living expenses: if you find you need the credit card to pay for weekly groceries or utility bills, then you have a problem.

Anyway, it all starts with some maths - first know your exact status, then you can decide whether to panic or not.

missg2210

I have an Amex that I don’t get charged for. It’s a reward card. I’d cancel the fee paying one & look at moving to a rewards IF you want to keep Amex.

-taff

Are you confusing your net and gross pay? You say you are earning 28k, is that fater or before tax?
You really need to work out exactly what your expenditure is, either with a spreadsheet, with an app [like YNAB or similar] or some other means that make sense to you.
Go through your benk statements to see exactly where you're spending money, set up categories on your spreadhseet or whatever for these items. Break it down by monthly fixed commitments, and yearly commitments [ divide these by 12] and you can see how much money you're speding or have available in each category.
Don't forget that spending money on little things each week adds up, the odd cup of coffee, magazine, bus ride, tube ride [ if you don't have a monthly ticket etc].
Work all these things out and you should have a better idea of where you stand finacially

ThatLondonFella

-taff wrote: »

Are you confusing your net and gross pay? You say you are earning 28k, is that fater or before tax?
You really need to work out exactly what your expenditure is, either with a spreadsheet, with an app [like YNAB or similar] or some other means that make sense to you.
Go through your benk statements to see exactly where you're spending money, set up categories on your spreadhseet or whatever for these items. Break it down by monthly fixed commitments, and yearly commitments [ divide these by 12] and you can see how much money you're speding or have available in each category.
Don't forget that spending money on little things each week adds up, the odd cup of coffee, magazine, bus ride, tube ride [ if you don't have a monthly ticket etc].
Work all these things out and you should have a better idea of where you stand finacially

£28,100 is before tax. I've got an appraisal coming up, so will ask for an increase when that's due. Fingers crossed I get it.

I've had a long, hard look at my finances and will cut-down on spending. I save as much as possible where I can, so never buy coffee, always make lunch and try and visit the reduced aisle where possible to stock up on frozen goods.

I do think that paying £150 annually for an AMEX card is too much, so I'm getting rid of the charge card and getting a credit card instead (0% interest free for 28 months, so that's good and would help.)


I felt pretty down about things before posting here, but there's light at the end of the tunnel and a smile back on my face. THANKS TO EVERYONE THAT REPLIED!

onwards&upwards

ThatLondonFella wrote: »

£28,100 is before tax. I've got an appraisal coming up, so will ask for an increase when that's due. Fingers crossed I get it.

I've had a long, hard look at my finances and will cut-down on spending. I save as much as possible where I can, so never buy coffee, always make lunch and try and visit the reduced aisle where possible to stock up on frozen goods.

I do think that paying £150 annually for an AMEX card is too much, so I'm getting rid of the charge card and getting a credit card instead (0% interest free for 28 months, so that's good and would help.)


I felt pretty down about things before posting here, but there's light at the end of the tunnel and a smile back on my face. THANKS TO EVERYONE THAT REPLIED!

£150 for the Amex is only worth it if you get a lot more than that in rewards, but on your wage I don’t think you can.

There are Amex cards where you still get points but don’t pay a fee. As long as you pay the balance in full every month so you never pay interest they are worth having.