Advice - move credit cards to secured

Suseka97

It certainly looks like you can do something about your current financial position with a few cutbacks and you really don't need a consolidation or even a DMP to get there. You have a good income and seeing as much of your debt was a result of house improvements - then really, you just need to see this as a short to medium term situation and work your way out of it without getting into any more debt.

Good luck with it.

tunde10

I understand regarding the Sports package as a big fan just like me. But there are solutions.

Firstly call up and cancel the package. The TV company is likely to call back and offer you the same deal for at least 40% discount. But that still leaves you paying £50+ a month.

Other option is to actually leave them and subscribe to NowTV. You can easily find vouchers online where Month sports package is £30 a month. Make sure you cancel every month and keep buying vouchers. Sometimes when cancelling, NowTv will offer you a deal for £20-£25 a month for like 3months to get you to stay.

Finally, around August, at start of league season they do a pass for £199 for 9months that covers the whole league season so look out for that.

Doing any of these would save you a significant amount. You can even add Netflix or Entertainment pass (£10 for 2months) and have access to loads of shows. You can save even more money by using VPN and subscribing to HD Sports streams online but that technically illegal and not easily accessible through the TV.

EssexHebridean

OK - comments in red as usual:

springfieldpark wrote: »

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.................... 1

Monthly Income Details
Monthly income after tax................ 3200
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3200
There are no pennies against any of these costs below - or on your income, which is usual. Generally this means that someone is either rounding up or down - meaning that either you end the month with a shortfall, or with a surplus that you didn't know about.
Monthly Expense Details
Mortgage................................ 804
Secured/HP loan repayments.............. 317 Is this for the car?
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 158 This is high - are you getting single person discount here? If you're paying over the standard 10 months then switching to 12 might help with budgeting.
Electricity............................. 65 Again this and your gas seems a bit high - are you sure you're on the best tariff for you? Also check whether you have a tendancy to walk around the house in shorts & a t-shirt in the middle of winter - if so put trousers and a jumper on and turn the thermostat down!
Gas..................................... 65
Oil..................................... 0
Water rates............................. 20 Metered I assume? Remember that the beauty of living alone is that if you're only wee'd, you don't need to flush every time... :rotfl:
Telephone (land line)................... 0
Mobile phone............................ 80 Whoah - for someone without debt this would be extortionate. Diarise to start looking for a good SIM only deal 3 months before your contract ends.
TV Licence.............................. 15 Why is this more than the usual? It should be £12.xx?
Satellite/Cable TV...................... 80 Again - this is high for someone with debt.
Internet Services....................... 20 Does this cover landline as well?
Groceries etc. ......................... 200 You'd be able to reduce this quite a bit if you wanted to. Start by looking at switching from brand labels to Supermarket own brands, possibly.
Clothing................................ 30
Petrol/diesel........................... 180 Fairly high mileage, then?
Road tax................................ 0 Zero rated or included in your finance deal?
Car Insurance........................... 80 Ouch - this is steep. Read the guide on the main MSE site on this and make sure you price-compare on renewal.
Car maintenance (including MOT)......... 20 Unless a lot ios uincluded in your finance deal this isn't enough - think Tyres, wiper blades, Servicing (possibly two a year on that mileage?) screenwash, cleaning...I'm assuming the car isn't old enough for an MoT test yet? once it approaches the 3 year mark though remember to factor that cost in too.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 90 OK this belongs elsewhere - entertainment by the sound of it?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 30 This is pretty high for a chap - why so much?
Entertainment........................... 0 So that £90 from above belongs here then - and is that actually what you spend in a month?
Holiday................................. 50
Emergency fund.......................... 0 As a homeowner, with a car you have to start budgeting here.
Total monthly expenses.................. 2349


Assets
Cash.................................... 0
House value (Gross)..................... 208000
Shares and bonds........................ 0
Car(s).................................. 14000
Other assets............................ 0
Total Assets............................ 222000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 153000...(804)......2.99
Hire Purchase (HP) debt ...... 17896....(317)......5
Total secured & HP debts...... 170896....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclays.......................8500......230.......22.9 Ouch
Virgin.........................7800......200.......23.9 My eyes are watering
Tesco..........................5700......120.......19.9 Still quite ouch
Wren...........................7600......158.......6
Natwest2.......................1350......30........16.9
Natwest1.......................1900......40........16.9
Total unsecured debts..........32850.....778.......-


Monthly Budget Summary
Total monthly income.................... 3,200
Expenses (including HP & secured debts). 2,349
Available for debt repayments........... 851
Monthly UNsecured debt repayments....... 778
Amount left after debt repayments....... 73 Do you have this left each month?

Personal Balance Sheet Summary
Total assets (things you own)........... 222,000
Total HP & Secured debt................. -170,896
Total Unsecured debt.................... -32,850
Net Assets.............................. 18,254

Lots of areas where you can make savings, is the first thing to say, but also a few places where you need to budget, but aren't.

Have you joined up to the MSE credit club and had a look at your possible eligibility for 0% balance transfer cards? That could be a way of shifting away from paying so much CC interest - just be sure to keep a track on the finish dates of any you shift to.

EssexHebridean

springfieldpark wrote: »

Your TV license should be £13/month
It is but I always round up on these things on my bills so I have spare.

OK - so let's assume you round everything on your SOA up by a couple of £'s, and there are 30 lines on your SOA....you've just created an extra £60 a month which you're not budgeting for and theoretically don't know you have....so how do you make that amount work for you? An SOA or budget should always deal with real world figures - particularly when you're getting to grips with actually living to it. That extra money could be going towards paying off one of the debts, remember!

pennystretcher

springfieldpark wrote: »

Electricity............................. 65
Gas..................................... 65
Mobile phone............................ 80
Satellite/Cable TV...................... 80

How big/old is your house? I pay £40pm combined for electricity and gas in a 3-bed house.
Also in comparison, I'm on £10pm contract on my mobile.. I'd just refuse to pay £80 pm for TV - if nothing else, for that price I'd expect to have a package including bband or fibre!

bsms1147

pennystretcher wrote: »

How big/old is your house? I pay £40pm combined for electricity and gas in a 3-bed house.

Council tax is equivalent to ~£2,500 a year at full price so sounds like a reasonably sized house, hence the higher insurance and electricity/gas bills I would presume.

As things stand:

It will take you 68 months to pay off these debts if you snowball correctly. During that time, you'll pay £19,485.00 in interest.

based on the £778 as stated. Put the extra £73 towards these debts that your SOA says is left over, and

It will take you 57 months to pay off these debts if you snowball correctly. During that time, you'll pay £15,545.00 in interest.

Just £73 extra a month at the debts saves you 11 months and nearly £4,000 interest. So, you can see that being precise on your SOA and budget, to the pound and pence, matters.

A consolidation loan could save you money. It could. But for most it won't. And it's a massive risk. If it were unsecured it would be worth considering (even then, for most it isn't wise), but you will not get one for £33,000 with already that amount of borrowing. I would definitely not recommend a secured loan for the reasons that people have said above.

That said though, in my opinion, consolidation generally a bad idea. If you're in debt, it's because you spend more than you earn, and it's all too easy to get a consolidation loan, pay off your current debts, and because your monthly outlay is less, you feel you have more spending power and run up new, extra debts.

Consolidating debts into your mortgage, or another secured loan is (again, in my personal option) an even worse idea. Secured debt means that if you default on payments you'll lose your home. Not only that, but your mortgage will generally be on a much longer term, so although the interest rate may be less, in the long run you'll be paying far more.

For example, according to the figures you've just entered, you currently owe £32,850.00. If you consolidated that into your mortgage at, say 5.5% over 25 years, you'd end up paying £27,668.32 in interest. By snowballing correctly, you'd pay £19,485.00

You're treading water, as things stand you will clear these, it will take time, but if you want the debts gone and sooner, then you need to really decide if some of your wants can go.

Cut the mobile phone bill closer to £10 a month, cut out the TV, reduce the presents, get your hair cut less frequently, adjust some of the spending categories like holiday (£50/mo for 3mo is £12.50/mo), and cut the groceries, and you could easily have circa £250 a month freed up.

In that case...

It will take you 39 months to pay off these debts if you snowball correctly. During that time, you'll pay £9,243.00 in interest.

Which is just over 3 years from now and saves £10,000 in interest.

Feel free to do your own calculations http://www.whatsthecost.com/snowball.aspx

Only you can decide how you proceed from here.