Looking for ideas

ooitsme

I’m tentatively addressing my finances and I’m looking for ideas. 

Background: I’m single with a grown up child who lives with me (council rented home) and contributes at 50% of the rent and bills. I’ve recently qualified as a nurse and just started my first post. 

During my time at university due to various life stuff  I have ran up credit card debt which in my mind is quite a lot - about £15k. Using Debt Payoff Planner app, the minimum payments plus a bit extra will take me 18 months of being very very tight to pay back. I already have a little side hustle and keep my spending very low. It will obviously cost me quite a bit in interest. I will have somewhere between £300-£400 left from my wage each month after paying the payments plus a bit extra - anything left I will pay in. 

Because I’m in this position, no interest free offers are coming up for me yet. 

I considered trying to make arrangements  with the companies - but it’s a requirement of my job to have a reliable car, so I’m keen to keep my PCP car. Hence I can’t really do that as it would batter my credit file. I have two years before I need to change it, so that’s my timescale to improve things and repair my credit. The minimum payments plus a bit extra are about £800 so this is significant. 

I just wondered if any of you experts had any advice. Thank you in advance 🙂

RAS

We really do need to see a Statement of Affairs to understand the your situation. 

It appears that you want to manage the situation without getting defaults?

But Arrangement to Pay markers can be as damaging as defaults, not least because they stay on your credit record for 6 years after the debt is paid off, rather clearing 6 years after issue like defaults, even if you never pay another penny.

The other factor is whether you are likely to get an increasing salary as your career progresses? Or get stuck on the same paypoint?

ooitsme

Yeah, bearing in mind that my salary will go up by another £300 a month next year (not considering any NHS pay increases) it’s part of the reason why I’m thinking it may be best to suck it up and keep living very very frugally and paying them down rather than making arrangements/defaulting. 

If it wasn’t for the car situation I would maybe default. I will prepare my ingoings/outgoings and pop them on. 

Thank you. 

RAS

There may be ways to pay it off more effectively, and there may be things you can do to find small amounts to shift some of it quicker, then apply for % balance transfers.

ooitsme

That’s what I’m hoping and looking for tips or ideas. I have no 0% offers at the moment but I’m hoping that as some balances clear, some might start being offered. And of course starting from the highest interest (they’re all in the 35% region unfortunately) 

ooitsme

Ive had a go at a soa. It looks pretty much like I thought it would, with not a lot spare to pile into debts. 

Household Information

Number of adults in household........... 2 (me plus son, ft student)

Number of children in household......... 0

Number of cars owned.................... 1 (on PCP)

 

Monthly Income Details

Monthly income after tax................ £1888 (possibly a bit extra, it will be my first wage in 3 years, so apparently I may pay a lot less tax than Im expecting)

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

Other income............................ £150 side hustle

Sons contribution - £350

 

Monthly Expense Details

Rent (council)............................... 400

Council tax............................. 174 (some rolled over from last year, will be £125 in April)

Electricity/Gas combined...... 107

Water rates............................. 30

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

Mobile phone............................ 40

TV Licence.............................. 0

Satellite/Cable TV...................... 12

Internet Services....................... 30

Groceries etc. ......................... 200

Clothing................................ 0 (nothing needed for a year at least)

Petrol/diesel........................... 75

Road tax................................ 16

Car Insurance........................... 30

Car PCP ……………………225

Car maintenance (including MOT)......... 16 (service plan)

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 12 prescription pre-payment

Pet insurance/vet bills................. 17 insurance

Buildings insurance..................... 0

Contents insurance...................... 0 (paid for year)

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 0

Haircuts................................ 15

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

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

Emergency fund.......................... 0

Total monthly expenses.................. £1399

 

Assets

Nothing

 

Secured & HP Debts

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

 

Unsecured Debts

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

Marbles ......................1037.....62.......41.2

Monzo flex........................824.....108.......0

JaJa                ......................1500 .....150    34.9

Next ............................380......35........25

Paypal cc ...................318 ......20........23.9

Fluid CC.....................2778......120.......34.8

virgin CC......................2512.....87.......27

Tesco Bank CC..................1516......60.......37

Vanquis………………….4469 ……..220……..23.4

Total unsecured debts.......... £15,334  £852

 

Monthly Budget Summary

Total monthly income....................  £2388

Expenses (including HP & secured debts). …1399

Available for debt repayments........... 989

Monthly UNsecured debt repayments....... £1002

Amount short for making debt repayments. – N/A

 

 

 

Grumpelstiltskin

Your insurances that have been paid yearly, you should divide the cost by 12 and include that figure in your SOA. You should also save that amount for the next years payment, otherwise how are you going to pay it?

badmemory

When you get your first payslip check your tax code.  Standard is 1257L.  Make sure there is no M1 or X on there.  If your first pay month is October then over £7k tax free.  So I guess no tax for October then.  December pay £9427 tax free.  By January 4 months pay will give you over £10k tax free.  So hopefully those untaxed amounts will help speed up the debt free time.  It sounds as though you already know to send any extras you can to the debts with the highest interest rates.   I didn't think students paid council tax but that is definitely not my area!  Good luck on your journey & I hope your new job goes well.

Brie

Can you pop something in for your contents insurance?  You need to account for that even though it's paid annually.  So if it's £120 a year, then say £10 a month or whatever.

And are you really not watching any live TV as you have no TV licence payment.  Again, maybe you're paying annually.  

Normal thing with credit cards is to pay off the highest interest one first as that makes the biggest impact so that would be Marbles, then Tesco.  But Next while not that high of interest is the smallest so might be paid off in full in a short period and that would be a great ego boost.  Might be gone by January which would be nice.  And then cancel the account.  Less credit available the better risk you are should there be any potential zero % BTs out there.  

And speaking of less credit available....are there any cards you plan on cancelling completely?  I'm looking at Marbles, Vanquis and Fluid perhaps as being CCs for those with poor credit.  You may want to ask to have your credit limits reduced on these every few months.  Again - makes you a better risk for more credit with a better lender.

Also I'd suggest you set a fixed amount for payment for each CC account.  Even an extra £1 makes your accounts look like they're more in your control and less like you're paying the minimum (which looks a bit more desperate).  Banks like people who are in control of their money.  

Best of luck with sorting this, and best of luck with the new role.  Well done for retraining to get a new lease on life.

fatbelly

Can you get any low interest offers?

https://www.which.co.uk/money/credit-cards-and-loans/credit-cards/best-credit-card-deals/best-low-interest-credit-cards-aK63v2V1RvgN#:~:text=A low-interest credit card is a deal that

sammyjammy

As said above if your son is a full time student you should get 25% discount on council tax.