Young, dumb and drowning in unsecured debt

MillennialDebtor

Thank you Working Mum. I will deffo check that out!

Not been the worst day today spend wise. Downloaded a great app which lets you input all your transactions and assign categories. From this I worked out I have paid £65 in postage to send all my eBay / Depop sales but have only transferred in about £30 from my PayPal. Still waiting on my expenses to be paid which at over £900 will start causing cash flow problems soon. Need to chase my employer again.

Was tempted to stop and grab some food on the way back from work today as I had a c.100 mile round trip to a different office and didn’t get lunch. Resisted and had some food at home.

Have a family member nearing the end so going to say my goodbyes to them later this evening with OH. At over 90 he has had a great life, but still very sad.

Need to check TopCB for any payable Cashback tonight to go into emergency fund! Also, pack for a mini break we’re going on tomorrow. OH’s parents have a holiday home, so we only had to pay for flights. Looking forward to some sunshine

MillennialDebtor

Another good job for today done. Set up a Trello board (this is something I use all the time in my job) to track my debts and their progress. I have nine debts on there and an emergency fund to save for of £1000. I can do this

MillennialDebtor

I reworked my budget today to be a bit more realistic. If anyone's interested here's a summary of my outgoings:
Dog 1 insurance £33.24
Dog 2 insurance £19.01
Dog walker £200.00
Dog food £150.00
Vet plan £20.00
Petrol £150.00
Car parking £100.00
Contact lenses £30.00
Toiletries £20.00
Spotify £9.99
iCloud storage £2.99
Phone insurance £12.75
Grocieries £250.00
Eating out £50.00
Smol £8.05
Cleaners £80.00
Going out £50.00
Charity £53.00
Buffer £100.00
Kindle Unlimited £7.99
Total: £1347.02

My post-tax earnings are around £2300. I normally earn around £30 cashback a month plus around £100-200 from Depop and eBay sales. So total monthly income around £2450 - £2550.

My car costs me nothing as its a company car (except a deduction from my tax free allowance based on the BIK value) and my travel (monthly season ticket on the train) is expensed. No phone bill as its a company phone too, and my OH owns our house so she pays the house bills.

This means I have around £1000-£1200 spare every month to service the following debts:

1. CC £1293 @ 39.9%
2. CC £2052 @ 39%
3. CC £2599 @ 39%
4. Catalogue £1454 @ 39%
5. Parking arrears £825 @ 0%
6. Catalogue ( Defaulted Arrears) £610 @ 0%
7. Phone (Defaulted Arrears) £120 @ 0%
8. Loan (Defaulted Arrears) £560 @ 0%
9. Overdraft £900 @ 0%
Total: £10,413

Due to the high interest rates I'm obviously paying down 1-4 as a priority with nominal/minimum payments to the others. I'll confess I've mostly ignored the defaulted accounts and haven't made payments on them for a number of years, as I was under the impression it didn't really improve your credit score if they were settled rather than unsettled.

Socajam

MillennialDebtor wrote: »

I reworked my budget today to be a bit more realistic. If anyone's interested here's a summary of my outgoings:
Dog 1 insurance £33.24
Dog 2 insurance £19.01
Dog walker £200.00 - this is high, but the dog need walking
Dog food £150.00 - same for this, dog need food
Vet plan £20.00
Petrol £150.00
Car parking £100.00
Contact lenses £30.00
Toiletries £20.00
Spotify £9.99 - I would get rid of this until you are debt free
iCloud storage £2.99 - same for this
Phone insurance £12.75 - why phone insurance if it's a company phone
Grocieries £250.00
Eating out £50.00 - same for this
Smol £8.05 - not sure what this is
Cleaners £80.00 - cut back
Going out £50.00 - you have both eating out and going that's £100.00
Charity £53.00 - I am all for charity, but when you have so much debt this needs cutting back - say 20.00
Buffer £100.00
Kindle Unlimited £7.99 - get rid of until debt free
Total: £1347.02

My post-tax earnings are around £2300. I normally earn around £30 cashback a month plus around £100-200 from Depop and eBay sales. So total monthly income around £2450 - £2550.

My car costs me nothing as its a company car (except a deduction from my tax free allowance based on the BIK value) and my travel (monthly season ticket on the train) is expensed. No phone bill as its a company phone too, and my OH owns our house so she pays the house bills.

This means I have around £1000-£1200 spare every month to service the following debts:

1. CC £1293 @ 39.9% - You should be able to pay this off in 2 months
2. CC £2052 @ 39% - Pay off in 3 months
3. CC £2599 @ 39% - Pay off in 4 -5 months
4. Catalogue £1454 @ 39% - Pay off in 3 months
5. Parking arrears £825 @ 0% - Pay minimum and use money to pay off highest interest incurring debt first
6. Catalogue ( Defaulted Arrears) £610 @ 0% - Pay minimum and use money to pay off highest interest incurring debt first
7. Phone (Defaulted Arrears) £120 @ 0% - Pay minimum and use money to pay off highest interest incurring debt first
8. Loan (Defaulted Arrears) £560 @ 0% - Pay minimum and use money to pay off highest interest incurring debt first
9. Overdraft £900 @ 0% - Pay minimum and use money to pay off highest interest incurring debt first
Total: £10,413

You can do what I suggested above and pay off the highest interest debts and leave the 0% to last. It can be done, but you have to make the effort and stop making excuses. The money is there to be debt free, stop keeping yourself chained to debt that is keeping you down.

After you paid of these debts, you need to start saving for a emergency fund and life happens fund. I would save in a different bank from the one where your salary is paid into. That is do not touch money unless you have a real emergency.

Due to the high interest rates I'm obviously paying down 1-4 as a priority with nominal/minimum payments to the others. I'll confess I've mostly ignored the defaulted accounts and haven't made payments on them for a number of years, as I was under the impression it didn't really improve your credit score if they were settled rather than unsettled.

Good luck and never forget where the misery of what debt can cause.

MillennialDebtor

Good luck and never forget where the misery of what debt can cause.

Thank you for the suggestions Socajam. I've got £700 stashed in an emergency fund already. Do you think I should use that to pay down my debts instead? Most people on here seem to advocate saving the emergency fund first, then focusing on the debts.

enthusiasticsaver

There is nothing on that soa to show rent or bills. Are you living at home with parents still or are you living with your partner? £1347 per month on an soa that does not include rent/mortgage/bills or even debts is high. £250 food for just you is high and paying for cleaners/charity payments/spotify and the like when you have £10k of debt shows that you have not made paying it off a priority when you could if you sorted out your expenses. The dogs are taking a huge proportion of your take home pay but obviously they are something you have to account for but maybe look into cheaper options for food and walking them.

As you have a car I would keep your emergency fund but maybe stop now at £700 until you have repaid the debt. Start with repaying the debt which is most expensive.

What I would say is when the debt is gone you will need to be more disciplined in where your money goes if you want a mortgage and all the financial commitments which come with that.

Hopefully you have learned your lesson and luckily you are young enough to turn this around. Good luck.

savingholmes

Thanks for visiting my diary. Just wanted to comment on one element of your soa - I have a dog and a cat - but don't spend anything like what you are on them. You seem to be spending around £400-430ish... every month. I'm not even paying a quarter of that... I pay my cleaner to walk my dog for half an hour a week (£5/6 a time). I work from home one day a week and the rest of the time the dog just has to manage... I do still have DD who is in education so dog only left around 5.5 to 6 hours per day on average. I would see if there is anything there you can cut back. My dog food is about £17 for a huge bag that lasts months. I do buy a little treat food on top but nothing approaching the amounts you quote. You seem to be spending around £5K a year just on the dogs