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HELP! i’m a student in debt and im overwhelmed!
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enthusiasticsaver said:Do you not make monthly payments to Very and Klarna? You need to get a handle on your budget as you are living beyond your means. Can you cancel the holiday?0
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ayupmeduck said:£300 a month on clothing and £70 a month on presents!1
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Emmia said:christmascookie24 said:Emmia said:I think there's a few expenses missing... You've put nothing down for groceries, car parking, or car maintenance, clothes, haircuts, gifts, and entertainment (do you never go out?) for starters.
If the budget is accurate... then you've got £600+ left over each month, so if that's the case why are you nearly £4,000 in debt?
I am in debt because I have been living beyond my means in numerous different areas, not here to make excuses! But I recognise that there is an issue and I want to tackle it and change it. I am aware I need to focus on my spending habits and I am currently doing so, but I am just wanting to know ways to tackle my debt and budget my money better. My student loan / bursary / salary next month should pay off my very pay, klarna and £500 of my overdraft from what I have worked out. thanks for your help.
Do you have anything else you can sell, e.g. clothes, books? Or the ability to take on some part time work to increase your monthly income? Can you avoid going on holiday for a bit? Stop buying more clothes and rein in the gifts?
When you pay off the Very / Klarna you MUST close them and not reopen them (or take out another form of credit, like a credit card) in order to try to force yourself to live within your means... Because at the moment, you're not.
I also notice you've put two adults in the household. But you don't live with your partner? So it should be 1? Or if you do, then what's their income / contribution?
Paying this off is going to involve some difficult choices. Is your partner aware of your financial position?
I have just done a big upload on vinted and I am doing a carboot sale this weekend to get rid of old things such as books, clothes etc. I have just got a part time job and I am working overtime so i can make more money to pay my debts off. Definitely am going to reign in the clothes and gifts.
Also agree to close the klarna and very accounts down as they are far too tempting, same with my overdrafts when they are paid off. I definitely recognise I have been living beyond my means for a long long time and that is what has landed me in this position, as embarrassed as I am to admit it.
I have put two adults in my household as I live with my mum, but as mentioned before, she is on a very low income salary, so I cannotrely on her to pay for things for me and sometimes end up having to pay towards bills etc. The £200 rent is my monthly board, but thats why i didnt include other bills in my SOA.
I realise its going to involve some difficult choices but I think its time to face the music before it gets any worse...
Thanks so much for all of your help. I really do appreciate it
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teaselMay said:christmascookie24 said:[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]Household Information[/b]Number of adults in household........... 2Number of children in household......... 0Number of cars owned.................... 1[b]Monthly Income Details[/b]Monthly income after tax................ 1300Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 1300[/b][b]Monthly Expense Details[/b]Mortgage................................ 0Secured/HP loan repayments.............. 176.4Rent.................................... 200Management charge (leasehold property).. 0Council tax............................. 0Electricity............................. 0Gas..................................... 0Oil..................................... 0Water rates............................. 0Telephone (land line)................... 0Mobile phone............................ 78.24TV Licence.............................. 0Satellite/Cable TV...................... 0Internet Services....................... 0Groceries etc. ......................... 160Clothing................................ 200Petrol/diesel........................... 100Road tax................................ 0Car Insurance........................... 64Car maintenance (including MOT)......... 50Car parking............................. 20Other travel............................ 64Childcare/nursery....................... 0Other child related expenses............ 0Medical (prescriptions, dentist etc).... 11.45Pet insurance/vet bills................. 0Buildings insurance..................... 0Contents insurance...................... 0Life assurance ......................... 0Other insurance......................... 0Presents (birthday, christmas etc)...... 70Haircuts................................ 13Entertainment........................... 60Holiday................................. 250Emergency fund.......................... 0Eating Out.............................. 120[b]Total monthly expenses.................. 1637.09[/b][b]Assets[/b]Cash.................................... 0House value (Gross)..................... 0Shares and bonds........................ 0Car(s).................................. 4000Other assets............................ 0[b]Total Assets............................ 4000[/b][b]Secured & HP Debts[/b]Description....................Debt......Monthly...APRMortgage...................... 0........(0)........0Hire Purchase (HP) debt ...... 6176.....(176.4)....0[b]Total secured & HP debts...... 6176......-.........- [/b][b]Unsecured Debts[/b]Description....................Debt......Monthly...APRKlarna.........................718.87....0.........0Student Overdraft..............2500......0.........0Very Pay.......................600.......0.........0[b]Total unsecured debts..........3818.87...0.........- [/b][b]Monthly Budget Summary[/b]Total monthly income.................... 1,300Expenses (including HP & secured debts). 1,637.09Available for debt repayments........... -337.09Monthly UNsecured debt repayments....... 0[b]Amount short for making debt repayments. -337.09[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 4,000Total HP & Secured debt................. -6,176Total Unsecured debt.................... -3,818.87[b]Net Assets.............................. -5,994.87[/b][i]Created using the SOA calculator at www.LemonFool.co.uk.Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
On the positive your household costs are very low, the top things that I've turned bold usually take a fair chunk of people's income, you're making a massive saving there in the things that are usually unavoidable.
I'm sure you've seen for yourself where a big chunk of your money is going, the bottom 5 things I've highlighted are all optional and add up to £700 a month, £100 would be pretty generous on those things (all put together). The positive from that is that those things are not essential and so you can reduce your spending on them.
You've got a lot of travel costs, does your course involve travel? Could you walk or cycle for some of those journeys?
You can get this under control
My student loan is in addition to the 1300 but I have to pay off my course fees with that first, as it is the standard masters loan, so the leftover will pay back my klarna, very and overdraft. Then once they are paid back I am going to close the accounts for all of them, and then all thats left to tackle is £2000 of my overdraft and get my finances in check to ensure I dont wind up in this position again!1 -
You've done a great first step in recognising the issue and wanting to make changes, well done! Your debt isn't huge and you've had your lightbulb moment at a good time before your debt gets unmanageable.
Your phone contract is quite high, can you get that down by talking to your provider?
A part time job would be a great start, and maybe ask for as many hours as you can cope with if they do overtime. Your debt is definitely manageable and I bet you'll be in a great position by next Christmas!1 -
You do need to include the monthly payments to Very and Klarna in you SOA, even if that makes the final sums look even more difficult.
I'd assumed that you were living with your mum so were ignoring all the standard household costs. You need to have a good chat with her about the situation.
If your mum is on a low income and you are living with her, you need some joint rules, agreements about costs. Until you left school/college she received help with the cost of housing you, utilities, food, clothing etc. She no longer gets that money. So ideally you need to sit down with her and her bills and work out a contribution that covers the cost of you living with her. I know that a lot of your fellow students just assume mum and dad will cover everything real and their loan/grant is spending money. But you may not want your mum getting into debt so you can buy clothes?
The whole SOA thing has been an eye opener to you, as to how much you've "blown" when you got some money for the first time. That's not unusual and it's not unknown for new students to spend their entire termly income in the first week.
Start by stabilising your situation. Work out what you can afford on your basic income? Does that leave you anything towards debt payments? If not use the job money to pay this down over time. And do put you car costs etc into an ISA at the beginning of every term.
Don't now rush headlong into paying off all your debts when your loan and bursary come in, as you'll then be unable to afford your essential costs later in the term. Use your part-time earnings to drive that down over time. And put the February, March and April minimum payments and rent into your ISA so they are protected. If you don't need the minimum payments, use the money towards your overdraft.
And talk to mum about living arrangements and about your financial epiphany. What bugs her and how can you change that? Think carefully about using the washing machine, long showers, heating, cooking together and menu planning. If you weren't living with her, you'd have to be very careful with all those things. And does she want a monthly payment, or would a lump sum each term help towards utility costs, for example?
Mean-time, well done for realising what was happening. There's a lot of people get into their thirties with more than that in £k of debt before it strikes home.If you've have not made a mistake, you've made nothing1 -
What is the £250 a month in the holiday section? Is that committed (as in the holiday is booked) or something you can postpone and use the money elsewhere for now?
Your mobile phone bill is also very high, I assume it is for both a device loan and the network charge. When does the contract end? Shifting to a cheaper sim only deal as soon as you can could cut £60 a month there.
You have already recognised that you are over spending on clothes and gifts. People should not have expectations of getting expensive gifts from students, so don't set the expectation on yourself. Clothes you should really be spending a 10th of that in your current budget and if you have been spending £200 a month then hopefully your Vinted sale should give you a decent cash injection.
What do you include in entertainment? That along with your eating out needs to be addressed. Is eating out takeaways or just daily spending at Uni on lunch etc? If the latter look at making food at home and taking it in, if the former look at ways that will encourage you to do more home cooking with quick meals as appreciated it can be hard to find the will to do more.
Your car budget may also be too high. An MOT should be no more than £45 and servicing at an independent specialist should be no more than £200 for a minor service and £300 for a major service so something in the £25 to £35 range depending on the requirements of that year.
Selling the car and buying a cheap run around may be an option, but consider it carefully as it could be a false economy. You may not get £4k for it and then buying something cheaper is jumping into the unknown from a reliability point of view. Given it is essential as you like an hour from Uni I would try to cut costs elsewhere first and cross that bridge if you have to.1 -
Your car may be 0 tax currently, but most car tax rates are changing April 2025, you may want to consider this in your budgeting.
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I'd agree with RAS above that you should probably be helping your Mum a bit more towards the bills, and there is scope to do that within your budget if you drastically reduce the spending on things that aren't essential. In addition to being fair as the other adult in the house, paying more towards household costs will help in the long term because if you get used to having such low costs it'll be very hard when you're needing to find full rent and bills from a similar income.
Working as much as you can without impairing your course is a very good plan. I worked in a nursing home for the first few years at uni, it bought me my first car and each shift effectively paid for a week of food. (£2.90 an hour, and I felt rich, briefly!).
You can get this under control. Think about how numbers work in your head and try to make a spread sheet of some sort, or even just a big piece of paper with arrows on, so that you can visualise what is going where when. That'll help you see what you can stop escaping and what you need to pay more to, I'd include your Mum in the latter.1 -
Good progress - you are gathering the information you need to understand your situation and control it.Check with the small print of your bank for when the overdraft will start charging and make sure you have a plan for getting out of it before then.
But a banker, engaged at enormous expense,Had the whole of their cash in his care.
Lewis Carroll1
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