Bit of debt advice please

adpom

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Monthly Income Details[/b]

Monthly income after tax................ 2750

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 2750[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 406

Management charge (leasehold property).. 0

Council tax............................. 125

Electricity............................. 50

Gas..................................... 35

Oil..................................... 0

Water rates............................. 1

Telephone (land line)................... 0

Mobile phone............................ 10

TV Licence.............................. 1

Satellite/Cable TV...................... 50

Internet Services....................... 0

Groceries etc. ......................... 500

Clothing................................ 20

Petrol/diesel........................... 50

Road tax................................ 1

Car Insurance........................... 1

Car maintenance (including MOT)......... 1

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)...... 50

Haircuts................................ 0

Entertainment........................... 0

Holiday................................. 0

Emergency fund.......................... 0[b]

Total monthly expenses.................. 1301[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 1

Other assets............................ 0[b]

Total Assets............................ 1[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Credit card 1..................7161......273.......34.84

Credit card 2 .................3875......187.......30

Credit card 3..................2532......115.......27.93

Klarna ........................299.......75........0

Loan 2.........................5665......264.......0

Loan 1.........................606.......202.......0

Credit card 4..................190.......10........30.34[b]

Total unsecured debts..........20328.....1126......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,750

Expenses (including HP & secured debts). 1,301

Available for debt repayments........... 1,449

Monthly UNsecured debt repayments....... 1,126[b]

Amount left after debt repayments....... 323[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 1

Total HP & Secured debt................. -0

Total Unsecured debt.................... -20,328[b]

Net Assets.............................. -20,327[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]


anything that has a 1 next to it I don’t pay the wife does an my card a motability car 

MFWannabe

adpom said:

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Monthly Income Details[/b]

Monthly income after tax................ 2750

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 2750[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 406

Management charge (leasehold property).. 0

Council tax............................. 125

Electricity............................. 50

Gas..................................... 35

Oil..................................... 0

Water rates............................. 1

Telephone (land line)................... 0

Mobile phone............................ 10

TV Licence.............................. 1

Satellite/Cable TV...................... 50

Internet Services....................... 0

Groceries etc. ......................... 500

Clothing................................ 20

Petrol/diesel........................... 50

Road tax................................ 1

Car Insurance........................... 1

Car maintenance (including MOT)......... 1

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)...... 50

Haircuts................................ 0

Entertainment........................... 0

Holiday................................. 0

Emergency fund.......................... 0[b]

Total monthly expenses.................. 1301[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 1

Other assets............................ 0[b]

Total Assets............................ 1[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Credit card 1..................7161......273.......34.84

Credit card 2 .................3875......187.......30

Credit card 3..................2532......115.......27.93

Klarna ........................299.......75........0

Loan 2.........................5665......264.......0

Loan 1.........................606.......202.......0

Credit card 4..................190.......10........30.34[b]

Total unsecured debts..........20328.....1126......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,750

Expenses (including HP & secured debts). 1,301

Available for debt repayments........... 1,449

Monthly UNsecured debt repayments....... 1,126[b]

Amount left after debt repayments....... 323[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 1

Total HP & Secured debt................. -0

Total Unsecured debt.................... -20,328[b]

Net Assets.............................. -20,327[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]


anything that has a 1 next to it I don’t pay the wife does an my card a motability car 

Nothing in your soa for haircuts, entertainment 
Is it just you and your wife? If so £500 is a lot for groceries 
Do you have any surplus per month? I guess not as you have no savings? 

You need to identify where you’re spending your money and why you have got into debt 
I would pay off cc4 first; small balance and high interest. I would let the loan just finish in 3 months then that frees up £200 a month to start chucking at the other credit cards; personally I’d clear klatna next and then focus on cc2; not the highest interest but lower balance so you feel like you’re achieving 
You can pay off these debts if you stick to a budget and focus on paying them off 

adpom

I’m such an dope no wonder I’m bad with money forgot to mention I get paid weekly which is why I’m messed up having to mange the bills on different weeks and why I was thinking a loan where it’s 1 payment 

EssexHebridean

Ok - so my first question is that £300 odd surplus each month - where is that going? Do you actually have that spare at the end of the month?

as already pointed out there are a few holes in the SOA - entertainment, holidays (even if all you do is the odd weekend away or trip to visit family, you need to budget the costs involved and make sure you set money aside) You are budgeting £50 a month for presents but show no cash assets, so is that money actually being saved, or is that just a “saving on paper?” Also as already said your groceries are high if you are anything like a family of 2, 3 or 4 - and there would still potentially be a saving to be made even at family of 5 level. 

Now to the question of how to tackle the debt. The loans - do either of those relate to previous debt consolidation? The issue with consolidating is as has been explained already - what usually happens is that someone consolidates, but doesn’t then close  the cards - either because they think “I’ll never use them again, so no need” or because they have put in place the back up of a proper robust emergency fund so they think they need to keep the cards in case “anything happens”. Only over time, the determination to not use the cards is outweighed by something like the telly going bang and nobody wanting to live without one while a replacement is saved for - oh and now we’re buying one we might as well get this super ultra high definition extra smart AI enabled flatscreen monster…rather than the modest sized perfectly standard one that is within their means - and so it begins again. The ONLY time consolidation actually works is when someone can maintain that determination to not use credit until such time as they are 100% confident that they will be controlling it, not the other way around, AND that any cards are set to clear completely at the end of each month.  With really good solid financial discipline it can be an option - but it takes a long while as a rule to gain that level of self-knowledge and determination. (In my case it was over 10 years from being totally debt free). 

Have you explored via the MSE credit club whether you stand any chance at all of getting a 0% balance transfer card to get any of the highest interest stuff shifted to? I would suggest that is a good first step for you - looking at those interest rates though I guess your credit file is already at the stage of making financial institutions nervous, so you may not. If you have any chance of one at all though you may as well apply and see if you can get anything moved. If you are turned down, then set a reminder for three months time and try again. Barclays used to offer a “lifetime of balance” lower interest option which while not as good as a 0% may still be better than some of what you have - I’m unsure if they still do, but it could be worth exploring. Subject to fees it could be worth looking at a balance transfer from card 1 to card 4 - as it appears that you have space on that and it is a slightly lower rate of interest? If you do this immediately reduce the limit on card 1 once you have done the transfer. The same would apply with card 1 > card 3 if there was room for that - again though you would need to do the maths regarding any fees. Ideally if you could BT card 1 onto a mix of your other cards and a 0% one, the card 1 could potentially be cleared and paid off and your overall interest cost would drop dramatically.

You have already had the steps to build an emergency fund explained - that is a priority. You should also then make sure you budget an ongoing monthly amount to continue building that too. Get shot of Klarna ASAP and then stop using it - BNPL is still debt, just the same as the cards and loans, and you need to transition to stopping relying on credit as a priority. Similarly if you have a PayPal credit account get that closed too. 

I suspect down the line you actually could be a candidate for a loan working for you - but you really must prove to yourself that this will work and not send you into an even deeper debt hole first. That bit will take some time. 

adpom

EssexHebridean said:

Ok - so my first question is that £300 odd surplus each month - where is that going? Do you actually have that spare at the end of the month?

as already pointed out there are a few holes in the SOA - entertainment, holidays (even if all you do is the odd weekend away or trip to visit family, you need to budget the costs involved and make sure you set money aside) You are budgeting £50 a month for presents but show no cash assets, so is that money actually being saved, or is that just a “saving on paper?” Also as already said your groceries are high if you are anything like a family of 2, 3 or 4 - and there would still potentially be a saving to be made even at family of 5 level. 

Now to the question of how to tackle the debt. The loans - do either of those relate to previous debt consolidation? The issue with consolidating is as has been explained already - what usually happens is that someone consolidates, but doesn’t then close  the cards - either because they think “I’ll never use them again, so no need” or because they have put in place the back up of a proper robust emergency fund so they think they need to keep the cards in case “anything happens”. Only over time, the determination to not use the cards is outweighed by something like the telly going bang and nobody wanting to live without one while a replacement is saved for - oh and now we’re buying one we might as well get this super ultra high definition extra smart AI enabled flatscreen monster…rather than the modest sized perfectly standard one that is within their means - and so it begins again. The ONLY time consolidation actually works is when someone can maintain that determination to not use credit until such time as they are 100% confident that they will be controlling it, not the other way around, AND that any cards are set to clear completely at the end of each month.  With really good solid financial discipline it can be an option - but it takes a long while as a rule to gain that level of self-knowledge and determination. (In my case it was over 10 years from being totally debt free). 

Have you explored via the MSE credit club whether you stand any chance at all of getting a 0% balance transfer card to get any of the highest interest stuff shifted to? I would suggest that is a good first step for you - looking at those interest rates though I guess your credit file is already at the stage of making financial institutions nervous, so you may not. If you have any chance of one at all though you may as well apply and see if you can get anything moved. If you are turned down, then set a reminder for three months time and try again. Barclays used to offer a “lifetime of balance” lower interest option which while not as good as a 0% may still be better than some of what you have - I’m unsure if they still do, but it could be worth exploring. Subject to fees it could be worth looking at a balance transfer from card 1 to card 4 - as it appears that you have space on that and it is a slightly lower rate of interest? If you do this immediately reduce the limit on card 1 once you have done the transfer. The same would apply with card 1 > card 3 if there was room for that - again though you would need to do the maths regarding any fees. Ideally if you could BT card 1 onto a mix of your other cards and a 0% one, the card 1 could potentially be cleared and paid off and your overall interest cost would drop dramatically.

You have already had the steps to build an emergency fund explained - that is a priority. You should also then make sure you budget an ongoing monthly amount to continue building that too. Get shot of Klarna ASAP and then stop using it - BNPL is still debt, just the same as the cards and loans, and you need to transition to stopping relying on credit as a priority. Similarly if you have a PayPal credit account get that closed too. 

I suspect down the line you actually could be a candidate for a loan working for you - but you really must prove to yourself that this will work and not send you into an even deeper debt hole first. That bit will take some time. 

Hi mate, thank you for the amazing post

in answer to your 1st question I’m unsure if I have 300 spare as I digit to mention I’m paid weekly, an I guess I just dribble through it buying random rubbish. 

Secondly the thing said u need to put presents in so I took a rough guess over the year. 

In terms of holiday and entertainment I do neither. Currently because I’ve got myself in this mess I’m working 13/14 days every 2 weeks an have been since Jan, which is probably why my SOA a bit messed up
in term if food we unfortunately eat a lot of take out and it not cheap. We have started to cut down on them.

in terms of the loans unfortunately both where for debt consolidation but me being dumb never got enough to clear any card so cancelled any of them.
My cards are all around 90% used and were at the start of Jan over their limits. Which is why I now work 13 out of 14 to get them down.
spend on my cards has been on takeout mostly nothing exciting and I did unfortunately get addicted to a mobile card game where I spent a lot of money on it from my cards. Around 500. Won’t be doing that ever again.
I can’t get any balance transfers. That’s why I got card 4, but the limit they said I’d get I didn’t I got far far less so was unable to transfer anything

The Klarna has 4 payments left it’s for golf clubs I can’t afford to use right now a stupid purchase which I do regret.
I don’t use PayPal. 

This is the stupid thing though and I know that now, I have 20k debt and nothing to show for it at all. I havnt used my cards in forever and when I did it was for gas or elec or the odd takeout.

the reason I was thinking about a loan although not sure I’d even get it anyway was to simplify my life remove every single debt and cancel the lot and just have one payment, instead of having multiple payments going out on different weeks 
Get a new bank account no debit card and transfer x a week in to it to cover the loan repayment an then try and pay extra off it.

adpom

MFWannabe said:

adpom said:

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Monthly Income Details[/b]

Monthly income after tax................ 2750

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 2750[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 406

Management charge (leasehold property).. 0

Council tax............................. 125

Electricity............................. 50

Gas..................................... 35

Oil..................................... 0

Water rates............................. 1

Telephone (land line)................... 0

Mobile phone............................ 10

TV Licence.............................. 1

Satellite/Cable TV...................... 50

Internet Services....................... 0

Groceries etc. ......................... 500

Clothing................................ 20

Petrol/diesel........................... 50

Road tax................................ 1

Car Insurance........................... 1

Car maintenance (including MOT)......... 1

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)...... 50

Haircuts................................ 0

Entertainment........................... 0

Holiday................................. 0

Emergency fund.......................... 0[b]

Total monthly expenses.................. 1301[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 1

Other assets............................ 0[b]

Total Assets............................ 1[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Credit card 1..................7161......273.......34.84

Credit card 2 .................3875......187.......30

Credit card 3..................2532......115.......27.93

Klarna ........................299.......75........0

Loan 2.........................5665......264.......0

Loan 1.........................606.......202.......0

Credit card 4..................190.......10........30.34[b]

Total unsecured debts..........20328.....1126......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,750

Expenses (including HP & secured debts). 1,301

Available for debt repayments........... 1,449

Monthly UNsecured debt repayments....... 1,126[b]

Amount left after debt repayments....... 323[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 1

Total HP & Secured debt................. -0

Total Unsecured debt.................... -20,328[b]

Net Assets.............................. -20,327[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]


anything that has a 1 next to it I don’t pay the wife does an my card a motability car 

Nothing in your soa for haircuts, entertainment 
Is it just you and your wife? If so £500 is a lot for groceries 
Do you have any surplus per month? I guess not as you have no savings? 

You need to identify where you’re spending your money and why you have got into debt 
I would pay off cc4 first; small balance and high interest. I would let the loan just finish in 3 months then that frees up £200 a month to start chucking at the other credit cards; personally I’d clear klatna next and then focus on cc2; not the highest interest but lower balance so you feel like you’re achieving 
You can pay off these debts if you stick to a budget and focus on paying them off 

Thank you very much for the great post.
I cut my own hair as I don’t have time or generally the money to pay for it. I think I need to sit down properly and work out my finances to the exact penny.
i was thinking of finishing the loan next month so from May I’ve got extra money to play with then pay off Klarna and cc4 in May/June 

Martico

Are you happy with spreadsheets? I ask because if you are, and can formulate a budget on one that takes into account weekly pay vs monthly outgoings, while laying out all your responsibilities for you outgoings etc, it's a process that would (from my experience) give you a strong measure of control over your position. It doesn't have to be flash - just start playing around with Excel or Googlesheets and see where you get to if you're not initially confident

RAS

The other basic for budgeting are.

Take your weekly pay and multiply by 4.3333 to get your Calender month salary. Like everyone else you will mainly have 4 week months, so would be wise to budget essential expenses to fit that pattern

Unlike most people you will have 4 months were you are paid 5 wage packets. Those weeks you'd be wise to allocate the money into budgeting accounts towards annual costs like insurance , holidays, festivities, possibly clothes.

enthusiasticsaver

Getting a loan is just rearranging the deckchairs on the titanic. You have done it before and it doesn’t work unsurprisingly. Consolidating debt is not clearing it, it is just moving it around. Having just one payment won’t necessarily make it easier for budgeting as the payment will be high even we’re you to get approved which is unlikely due to your existing debt. 

If you are paid weekly you need to be disciplined with your money and I strongly recommend you do not use credit moving forward. Work out essential bills and open an account just for those. Is that £2750 a 5 week or 4 week month? That looks like around £700 a week. You can get that grocery figure lower if just you and your wife. Personally I would not pay the loan off until you have got a budget running as you don’t have spare savings to do so and only an £323 surplus assuming your soa is accurate.  

 I would pay off CC4 first as a quick win. Then tackle CC1 when the smaller loan is repaid. I suggest you get in the mentality of buying takeout as an odd treat not all the time as you must have been to accrue that debt. Can you sell the golf clubs? Golf course fees are normally expensive so you won’t be able to afford them. 

Andyjflet

adpom said:

Hi Guys, I’m new to the forum and just after a bit of debt advice 

So recently I woke up and realised I’m 43 next month I have £22k of debt (2 loans, 4 credit cards(1 is only £200) and Klarna £299) and zero savings  

1 of my loans has only £606 on it left and I plan on paying it off next week, this will free up £202 a month but I’m unsure what to do with the £202 as my plan is to try and get a 20k loan(my credit score low) to pay off everything else. Would free up close to £500 a month 

so I was thinking of paying off Klarna and then the £200 credit card(then unsure if to cancel it or keep it at 0) to boost my credit score to get the loan. 

Is this a good idea or should I try something else?

thank you 

Bad idea my friend. The usual advice on here is to start planning.

1, Put together an emergency fund of £1000 and dont ever use credit or loans again.
2. Start paying off the smallest debt first and then snowball this payment into the next debt. (Small and quick wins will boost your motivation, I talk from experience, will keep you engaged and change your mindset about living in debt.)