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Young & Dum

I have struggled with money from the age of 18 and am currently 25. I am trying to get my act together from now on. I make good money but have been very bad with managing it. I think my first aim should be to create a £1,000 emergency fund instead of paying off the debt. What do you guys think?

To get to a £1,000 emergency fund I need to save an average of £33.33/day for 30 days, which sounds difficult to be honest. But Christmas is coming up, I haven’t been one to celebrate any holidays, I don’t like celebrating my birthday or anything. Christmas for me just means a loss of income on the holidays as am self-employed.

My thought process is to put £1/day and increase by 1 every day for 30 days. This will equal to £465 in 30 days, and I will have to put £535 from my monthly salary from my LTD company.

 

If anyone has any suggestions feel free.

 

My debts:

Natwest Overdraft - £6,250

Santander Overdraft - £8,700

Barclays Overdraft - £3,000

Pay day loan - £1,200

Pay day loan - £200

Phone - £800 (contract itself), £120 (Phone)

Family member - £1,100

Other Family member - £800

Mortgage - £124,420


Replies

  • SarahwithloveSarahwithlove Forumite
    1.8K Posts
    1,000 Posts Fourth Anniversary Name Dropper
    Forumite
    Focus on clearing your payday loans over emergency fund. As much as an emergency fund would be good the effect of those on your debt and credit score is just too much to risk it. Get them gone. 
    *RBS credit card - £1930.50* - £0.00 *Tesco Credit card - £3604.30* - £0.00 *Finance - £581.91 - £0.00 *Dad loan - £5300 - £3800 *M+S Credit Card - £0 *MBNA Credit Card - £1211.88 - £1170 *Virgin Credit Card - £3075 - £2950 *Total debt - £7920* *Sinking/Emergency Fund - £5000/£5000**Mortgage Overpayment - £46.90/£1000* Facing Reality - My Debt Free Diary
  • SarahwithloveSarahwithlove Forumite
    1.8K Posts
    1,000 Posts Fourth Anniversary Name Dropper
    Forumite
    Also do a SOA so people can help advise where you can make changes. 
    *RBS credit card - £1930.50* - £0.00 *Tesco Credit card - £3604.30* - £0.00 *Finance - £581.91 - £0.00 *Dad loan - £5300 - £3800 *M+S Credit Card - £0 *MBNA Credit Card - £1211.88 - £1170 *Virgin Credit Card - £3075 - £2950 *Total debt - £7920* *Sinking/Emergency Fund - £5000/£5000**Mortgage Overpayment - £46.90/£1000* Facing Reality - My Debt Free Diary
  • Bearwithme93Bearwithme93 Forumite
    6 Posts
    First Post
    Forumite
    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 1
    Number of children in household......... 
    Number of cars owned.................... [b]

    Monthly Income Details[/b]
    Monthly income after tax................ 4000
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 4000[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 1100
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 110
    Electricity............................. 45
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 0
    Mobile phone............................ 10
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 40
    Groceries etc. ......................... 200
    Clothing................................ 50
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 15
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 1570[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 420000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0[b]
    Total Assets............................ 420000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 124420...(1100).....2.4[b]
    Total secured & HP debts...... 124420....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR[b]
    Total unsecured debts..........0.........0.........-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 4,000
    Expenses (including HP & secured debts). 1,570
    Available for debt repayments........... 2,430
    Monthly UNsecured debt repayments....... 0[b]
    Amount left after debt repayments....... 2,430[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 420,000
    Total HP & Secured debt................. -124,420
    Total Unsecured debt.................... -0[b]
    Net Assets.............................. 295,580[/b]

    [i]Created using the SOA calculator at www.stoozing.com. 
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • Bearwithme93Bearwithme93 Forumite
    6 Posts
    First Post
    Forumite
    I posted up my SOA, as I have a relatively new business, my income has been varying significantly, during covid-19 my income was zero.
    Also in regards to clearing my payday loans, they are already in arrears I checked my credit score on this website and the damage has already been done.

    Right now I'm just trying to get into good habits and discipline.
    I opened a separate bank account just for saving and am putting aside some money everyday into it till I get to 1,000.
  • Bearwithme93Bearwithme93 Forumite
    6 Posts
    First Post
    Forumite
    Also have to pay back a family member a loan next week so will be transferring 800 to them.
  • MidsHollieMidsHollie Forumite
    292 Posts
    100 Posts Second Anniversary Name Dropper
    Forumite
    Hi there @Bearwithme93
    Your SOA doesn't really make much sense to be honest. You really need to put down as close to possible as what you have been spending over the past few months. I find it see how you have £20000 of debt, and yet your SOA says that you have over £2000 per month spare. 
    You must be spending more than what your SOA says, I'm sure. Your energy costs seem low in comparison to your house value. Do you live in a very expensive area? You have no water costs? Do you live in Scotland? You never buy anyone a gift or a card? No take aways, days out or cinema trips? No nights out? No buildings insurance? This is usually a requirement for a mortgage. You can only address your debt once you address your spending. And you can only do this when you really know what your expenses are

    https://forums.moneysavingexpert.com/discussion/6086606/debt-free-by-23/p1

    True LBM, December 2019 = £32934. Current Debt = £12762. 1% Challenge = 61.1%. #51 3-6 Month EF Challenge = £1200/£6000



  • edited 17 November 2020 at 8:46PM
    Baron_DaleBaron_Dale Forumite
    288 Posts
    100 Posts Second Anniversary Photogenic Name Dropper
    Forumite
    edited 17 November 2020 at 8:46PM
    Apologies if I sound a little sceptical. You are 25 with a house worth £420000 with a mortgage of only £124000. Yet you have £20000 of unsecured debt including pay day loans. You do not have  car.  Your income is well above average at £4000 a month afer tax! So at least £60000 plus a year.
    Something is not adding up here.
    Maybe I am just being old and dumb.
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